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Buyers can expect flat to down prices for power management semiconductors this year, although leadtimes may stretch in the second half because of growing demand and production cutbacks last year.
While the overall power management integrated circuit (IC) market declined last year to $29.9 billion from $31.8 billion in 2011, industry analysts and suppliers are forecasting stronger demand this year. Demand will be driven in part by portable equipment, including media tablets and smart phones.
As a result, the power management IC market will grow 7.6% to $32.2 billion in 2013, according to researcher IHS. Growth will continue through 2016 when global power management chip revenue will total $38.7 billion, the researcher says.
Portable handheld devices, including mobile phones, consumer electronics equipment, hybrid and electrical vehicles, the smart grid and medical equipment will drive growth for power management chips over the next several years.
Power management semiconductors include voltage regulators and references, power interface ICs, application-specific power management ICs, power transistors and thyristors, among others.
Stephan Ohr, research director, analog and power semiconductors for Gartner Inc., says the fastest-growing part of the power management IC market is non-isolated DC-DC converters used as point-of-load (POL) supplies on densely populated server cards. That segment will post 11.5% compound annual growth through 2017, he says.
“The switch-mode regulators draw a somewhat higher ASP (average selling price) because of their small footprint, low-profile packaging and high energy-transfer efficiency with minimal heat dissipation,” he says.
Ohr says the voltage regulator market will grow at 5.2% annually from $9.5 billion in 2012 to $12.3 billion in 2017.
“This is a bit faster growth rate than the semiconductor market as a whole,” he notes.
Gartner says the overall chip market will rise 4.8% during that time. Ohr adds that buyers can expect an "upward creep" in average prices for power management semiconductors as high-efficiency switch-mode regulators replace low-cost linear regulators in consumer goods such as set top boxes in LCD televisions.
Slow growth so far
“Now that demand is up, inevitably leadtimes are stretching a bit,” said Paolo Sandri, director of marketing and application for chipmaker STMicroelectronics, headquartered in Geneva.However, although growth is projected over the next several years, in the first quarter of this year power management IC demand has been less than robust.
“There has been a slight progress in demand” in the first quarter for power management ICs compared to first quarter of last year, says Paolo Sandri, director of marketing and application for chipmaker STMicroelectronics, headquartered in Geneva. “It is a little bit better than 2012. We are on the right track,” he says.
STMicroelectronics makes power management chips that are used in smart phones, smart power, networking equipment and industrial applications among other segments.
He says prices are generally stable, but leadtimes are stretching. He adds that ST reduced capacity last year because of sluggish demand.
“Now that demand is up, inevitably leadtimes are stretching a bit,” he explains.
Leadtimes are in the 12-16 week range.
Buyers should not expect suppliers to rush to add capacity. Suppliers will want to make sure that rising demand for power management ICs will last before they start to increase production.
Michael Althar, vice president and general manager, multi-market power products for Intersil, based in Milpitas, Calif., says business is improving for some power management segments, but not all.
“Demand from servers and micro-servers is driving a lot of power management IC requirements,” said Michael Althar, vice president and general manager, multi-market power products for Intersil.“Power management is a big industry with a lot of different pieces,” he says.
Demand has picked from manufacturers of media tablets and other portable devices. However, the computer segment “is going through a transition” and power management semiconductor demand from that segment is still sluggish, Althar adds.
"The industrial market is showing some signs of life,” he says. “But I would not say it is a rising tide everywhere.”
Althar says cloud computing will be a growth driver for power management ICs because cloud computing requires a large number of servers.
“Demand from servers and micro-servers is driving a lot of power management IC requirements,” says Althar, adding that 4% of power in the United States is consumed by servers and that there is a growing need to reduce power and servers.
Althar says it's not just a matter of power requirements for computers in "server farms" that handle cloud computing. Server farm operators are also concerned about the amount of power needed by servers when they are idle.
“When you’re talking about server farms as large as they are, the idle power can be thousands of dollars per hour as well,” Althar says.