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© ihs markit Analysis | January 23, 2017

Power Semis: Demand to soar due to big electrification in vehicles

"Increasing electrification in vehicles generally – and in hybrid and electric vehicles specifically – is energizing the market for power semiconductors in vehicles", writes IHS Markit.
The global market for power semiconductors used in cars and light passenger vehicles will grow by more in USD 3 billion in the next six years, according to new analysis released today by IHS Markit.

In the report, entitled 'Power Semiconductors in Automotive - 2017', forecasts the total market for power semiconductors (discretes, power modules and power ICs) to increase from USD 5.5 billion in 2016 to more than USD 8.5 billion in 2022. Revenue will grow at an annual rate of 7.5 percent from 2015 to 2022, the report predicts.

“Increasing electrification in vehicles generally – and in hybrid and electric vehicles specifically – is energizing the market for power semiconductors in vehicles”, said Richard Eden, senior analyst, power semiconductors for IHS Markit. “Staying connected via smartphones and tablets is the modern way of life and to this end, today’s car drivers are opting for Bluetooth, cellular technologies and other telematics functions. All these features require power semiconductors to distribute and control power through vehicles.”

Also contributing to the rise of power semiconductors, the report notes, is the automotive industry’s mission to offer self-driving, ‘green’ and connected cars in the next decade. According to IHS Markit, intermediate safety milestones such as automatic emergency braking (AEB) and platooning are necessary to realize a road system that will accommodate self-driving cars. Other factors in the trend toward more power semiconductors: the need for more fuel-efficient systems, a higher proportion of electric vehicles, and more electronic content per vehicle as required for improved vehicle emission levels.

Powertrain category to lead the way

IHS Markit categorizes five domains on a vehicle: Body and Convenience, Chassis and Safety, Infotainment, Powertrain and Advanced Driver Assistance Systems (ADAS). Of these, Powertrain accounted for 47 percent of the total market for automotive power semiconductors in 2015, the report indicated.

Anticipated growth in sales of hybrid and electric vehicles in the next few years will spur power semiconductor sales to climb by CAGR 9.6 percent from 2015 to 2022 across all vehicles, taking Powertrain’s market share up to 54 percent of the total market, according to the report. Discrete IGBT power transistors account for most of Powertrain power semiconductor revenue, but increased integration of discretes into modules will cause IGBT power module sales to increase at a much faster rate.

According to the IHS Markit report, the Chassis and Safety category represents the second most-valuable automotive domain for power semiconductors, accounting for 24 percent of the total market in 2015. In contrast with Powertrain, the use of power semiconductors in Chassis and Safety will only grow with CAGR of 3.1 percent from 2015 to 2022, the report says. The biggest user of power devices in this domain are applications such as electric power steering, anti-lock braking system and electronic stability control, airbags and tire pressure monitoring, which are already relatively well-established in vehicles.

The domains of Body and Convenience and Infotainment only accounted for 14 percent and 11 percent of the total automotive power semiconductor market in 2015, respectively. Both categories are expected to grow with a CAGR of around 4 to 5 percent from 2015 to 2022, the report predicts. At present, the smallest domain is ADAS, with only 5 percent of the total market in 2015. However, ADAS is forecast to see the fastest growth of all of the five domains, growing with a CAGR of 16 percent from 2015 to 2022. ADAS will see a rapid increase in the number of sensors, cameras and interconnectivity systems in cars, and all will need power semiconductors in their power control circuitry.

A closer look at value

Discrete power semiconductors, the report points out, provide the highest average value per car. This is not surprising as they have the lowest average sales price and are used in even the simplest, cheapest automotive electronic systems like engine, transmission control units, electrified oil pumps and power systems.

Power ICs provide slightly less average value per car. They are more expensive and newer, so are more prevalent in high-end vehicles and more modern car designs, which contain more features, like ADAS, for example. Power modules have the smallest average value per car because their use is restricted to larger, high-end vehicles and to hybrid and electric vehicles only.

The average sales per vehicle of the three classes of power semiconductor are expected to increase at different compound annual growth rates (CAGR) from 2015 to 2022. The power modules value per vehicle is forecast to rise with CAGR twice that of the overall average from 2015 to 2022, whereas power ICs will grow only slightly faster than the overall rate. Both of these confirm that the integration of discrete power semiconductor functions into ICs and power modules is set to continue.

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November 14 2017 8:30 PM V8.8.9-1