Green mobility, automation drive power electronics market
By 2018, the global market for power electronics will add 7 percent annually, the Roland Berger experts have figured out. In two years, the market volume will exceed the mark of $200 billion at profit margins of 15 to 20% and beyond.
The experts have identified three main growth drivers: The growing ecological awareness among the population will foster more electric vehicles (including hybrid drives), and the regulations will act in much the same way. The third pillar in Roland Berger’s scenario is the increasing manufacturing productivity, driven itself by “digitization” which manifests itself in increasing connectivity and intelligent controls as described in concepts such as Industry 4.0. All these factors stimulate the demand for power electronic components and devices. The robotics market alone, a subsegment of industrial manufacturing, has grown from $6 billion to $34 billion within the past 15 years. By 2020, this market segment will again double to almost $70 billion, the experts extrapolate.
“Additional contributions to the demand in the power electronics market can be expected from the automotive industry”, explained Roland Berger partner Wolfgang Bernhart. “The strong development of electromobility, driven by the need to reduce CO2 emission, as well as the trend towards automated driving will change the automotive industry radically and open up many new application fields for power electronics.”
Though electromobility is still in its infancy, the automotive business is already accounting for 25% the power electronics sales. With increasing electromobility penetration, the automotive sector will become the most significant customer industry branch for power electronics.
The huge chances however also contain significant risks. It is well possible that during the further development of industry 4.0 the emphasis will be more on software and intelligent algorithms. Many of today’s industry players however are not overly well prepared for such a possibility since they simply have not enough software expertise. Also the future technology development in power electronics bears significant uncertainty, in the first place the introduction of alternative materials such as silicon carbide (SiC) and gallium nitride. In the automotive industry, cost pressure could lead to standardisation of components. “Increasing competitive pressure and economies of scale in the automotive industry could exert pressure on the profit margins of power electronics vendors”, warns Ralf Lässig, Partner of Roland Berger.
Against the background of these risks, the experts from Roland Berger analysed several different scenarios and devised recommendations for action aiming at well-established vendors of components and system applications as well as at new players in these fields. Established vendors should focus on close customer relations which enables them to identify possible synergies and even trigger joint R&D activities. In addition they should intensify their software competencies and keep their cost structures lean and flexible – this way they will be able to quickly respond to changing conditions. New players, in contrast, need a solid capital basis, a long-term strategy for certain market niches and innovative solutions to hold their ground at the market.
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