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© wrangler dreamstime.com Analysis | June 25, 2015

Normal growth patterns return to power transistors

After six years of gyrating between strong increases and sales declines, the power transistor business is returning to more normal growth patterns.
Power transistor sales are forecast to grow six percent in 2015 and set a new record high of USD 14.0 billion following a strong recovery in 2014, which drove up dollar volumes by 14 percent after two consecutive years of decline, according to IC Insights’ latest report. In the last six years, power transistor sales have swung wildly, overshooting and undershooting end-use demand as equipment makers struggled to balance inventories in the midst of economic uncertainty since the 2008-2009 recession.

IC Insights believes the power transistor business is finally stabilizing and returning to more normal growth patterns in the 2014-2019 forecast period. Driven by steady increases in automotive, consumer electronics, portable systems, industrial, and wireless communications markets, power transistor sales are expected to rise by a compound annual growth rate (CAGR) of 5.3 percent between 2014 and 2019, when worldwide revenues are forecast to reach USD 17.1 billion. Worldwide power transistor sales grew by a CAGR of 6.2 percent between 1994 and 2014.

For more than three decades, power transistors have been the growth engine in the commodity-filled discrete semiconductor market, which grew 11 percent in 2014 to a record-high USD 23.0 billion after falling seven percent in 2012 and dropping five percent in 2013. The new O-S-D Report shows power transistors accounted for 58 percent of total discretes sales in 2014 versus 51 percent in 2004 and 36 percent in 1994. A number of power transistor technologies are needed to control, convert, and condition currents and voltages in an ever-expanding range of electronics—including battery-operated portable products, new energy-saving equipment, hybrid and electric vehicles, “smart” electric-grid applications, and renewable power systems.

Despite the spread of system applications, power transistors have struggled to maintain steady sales growth since the 2009 semiconductor downturn, when revenues fell by 16 percent. Power transistor sales sharply rebounded in the 2010 recovery year with a record-high 44 percent increase followed by 12 percent growth in 2011 to reach the current annual peak of USD 13.5 billion. Power transistors then posted the first back-to-back annual sales declines in more than 30 years (- eight percent in 2012 and - six percent in 2013) due to inventory corrections, price erosion, and delays in purchases by cautious equipment makers responding to economic uncertainty. Power transistors ended the two-year losing streak in 2014 with sales and unit shipments both growing by 14 percent.

The 2015 O-S-D Report’s forecast shows power transistor sales returning to a more normal six percent increase in 2015 with power FET revenues growing six percent to USD 7.4 billion, insulated-gate bipolar transistor (IGBT) modules climbing eight percent to USD 3.1 billion, IGBT transistors rising six percent to USD 1.1 billion, and bipolar junction transistors being up four percent to USD 893 million this year.

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