Power Electronics Market

Global Power Electronics Market Size (2023 to 2028)

As per our analysis report, the global power electronics market is expected to reach USD 50.93 billion by 2028 from USD 37.88 billion in 2023, growing at a compound annual growth rate (CAGR) of 6.1% during the forecast period.

The power electronics market is experiencing a substantial surge in growth, primarily propelled by the increasing adoption of renewable energy sources like solar and wind power. This burgeoning trend necessitates the utilization of power electronics for efficient energy conversion and seamless integration into existing grids. Power converters, a pivotal component in this landscape, play a critical role in transforming and conditioning the variable and often unpredictable output from these renewable sources. As the world pivots towards cleaner and sustainable energy solutions, power electronics enable the efficient harnessing and distribution of power from renewable assets. Their capacity to convert, control, and manage electrical energy ensures the stability and reliability of renewable energy systems. This market's evolution aligns with global efforts to combat climate change, reduce carbon emissions, and transition towards a greener, more sustainable energy future, making power electronics an indispensable enabler of this transformative energy landscape.

The power electronics market is undergoing significant growth, with one of its key drivers being the pivotal role it plays in the development of smart grids. Power electronics are the linchpin in enabling these intelligent and adaptive electricity distribution networks to function efficiently. They empower better control, real-time monitoring, and the optimized distribution of electrical power within smart grids. This enhanced grid management not only improves the reliability and stability of the power supply but also boosts overall energy efficiency. Smart grids leverage power electronics to integrate renewable energy sources seamlessly, manage peak demand effectively, and reduce power losses during transmission. Additionally, they enhance grid resilience, enabling quick responses to outages and voltage fluctuations. As the world seeks more sustainable and resilient energy infrastructure, the Power Electronics Market continues to advance, supporting the evolution of smart grids and ensuring a more reliable, efficient, and environmentally friendly electricity supply system.

High initial costs are a significant restraint in the power electronics market. The substantial upfront investment required for power electronics components and systems can be a deterrent, particularly in markets with cost-conscious consumers and businesses. This cost barrier can hinder the widespread adoption of these critical technologies, which are pivotal for enhancing energy efficiency and sustainability. Mitigating this challenge necessitates ongoing efforts to reduce production costs through advancements in manufacturing techniques and materials. Additionally, government incentives and subsidies can help make power electronics more accessible. As economies of scale are achieved, we can anticipate a gradual decrease in prices. Furthermore, as the benefits of power electronics become increasingly evident in terms of energy savings and system efficiency, the long-term return on investment may outweigh the initial costs, making adoption more appealing. Ultimately, addressing the issue of high initial costs is essential to unlocking the full potential of power electronics and ensuring a more sustainable and energy-efficient future.

Impact of COVID-19 on the power electronics market:

The COVID-19 pandemic initially had a detrimental impact on the Power Electronics Market, disrupting supply chains, delaying projects, and causing uncertainty in demand. Shutdowns of manufacturing facilities, reduced workforce availability, and logistical challenges led to supply chain disruptions, impacting the production and availability of power electronics components and systems. These setbacks resulted in project delays across various industries, including renewable energy and automotive sectors. Additionally, reduced consumer spending and business investments during the pandemic's peak hindered market growth. But the COVID-19 pandemic also highlighted the importance of power electronics in critical infrastructure, healthcare, and remote work solutions. 

REPORT COVERAGE:

This research report on the global power electronics market has been segmented and sub-segmented into the following categories.

Power Electronics Market – By Application:

• Renewable Energy
• Electric Vehicles (EVs)
• Industrial Drives
• Consumer Electronics
• Aerospace and Defence
• Smart Grids
• Medical Devices

 The renewable segment is gaining traction over the market share as governments and organizations worldwide are also investing heavily in renewable energy infrastructure to reduce carbon emissions. 

The electric vehicle segment is another dominant force in the power electronics market. With an increasing focus on reducing greenhouse gas emissions and transitioning to electric mobility, the automotive industry is investing in electric and hybrid vehicles, which rely heavily on power electronics for efficient energy conversion and motors.

Industrial drives and automation applications hold a significant share in the power electronics market, driven by the need for precise motor control and energy efficiency in manufacturing and process industries. Industries are constantly seeking ways to improve productivity, reduce energy consumption, and enhance automation. Power electronics provide the necessary control and efficiency required for industrial drives and automation.

Consumer electronics applications are prevalent in the market due to the widespread use of electronic devices, although they may not dominate in terms of revenue. The consumer electronics segment benefits from devices like smartphones, laptops, and home appliances. 

Aerospace and defense are driven by the need for reliability and performance in mission-critical systems. Power electronics in these sectors support advanced avionics, radar systems, and military equipment, and their dominance stems from the unique, high-performance requirements of these applications.

Smart grids, while critical for the future of energy distribution, may not be the most dominant application, but they hold a growing market share. The transition to more efficient, resilient, and sustainable power distribution systems drives the demand for power electronics in smart grid applications, even though the market share may be smaller compared to renewable energy and EVs.

Medical device applications occupy a specialized niche in the power electronics market. Power electronics in medical devices are vital for applications like MRI machines, pacemakers, and imaging equipment, where safety, precision, and reliability are paramount.

Power Electronics Market – By Material:

• Silicon
• Silicon Carbide (SiC)
• Gallium Nitride (GaN)

Silicon has been the traditional material used in power electronics and still maintains dominance due to its established infrastructure and relatively lower cost. Silicon power devices are well-established, and manufacturers have invested heavily in silicon-based technology. 

SiC is becoming second dominant, especially in high-power and high-frequency applications. SiC offers characteristics compared to silicon, including higher operating temperatures, faster switching speeds, and reduced power losses. These properties make SiC ideal for applications like electric vehicles, renewable energy inverters, and high-frequency power converters, where efficiency and compactness are crucial.

GaN is another emerging material in power electronics, primarily in high-frequency and high-efficiency applications. GaN devices exhibit excellent high-frequency performance, low conduction losses, and compact form factors. They are particularly well-suited for applications in wireless power transmission, data centers, and military systems, where high power density and high efficiency are essential.

Power Electronics Market - By Region:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

The Asia Pacific power electronics market is ruling with the largest share due to major manufacturing hubs, rapid industrialization, and a strong focus on electric mobility, renewable energy, and consumer electronics. They cater to the high demand for power electronics components in industries like automotive, industrial automation, and renewable energy.

North America Power Electronics Market is next in leading the dominant share. The region is known for its leadership in electric vehicle technology, data centers, and aerospace applications. 

Europe holds a prominent position in the Power Electronics Market, primarily due to its emphasis on renewable energy, automotive electrification, and industrial automation. The EU's strict emission regulations have accelerated the transition to electric vehicles, further boosting the power electronics market.

Latin America has significant potential in the power electronics market, driven by emerging economies, renewable energy projects, and the need for infrastructure development. However, it faces challenges related to economic stability and infrastructure investment. The region is experiencing a growing demand for power electronics, especially in renewable energy installations and industrial sectors. Continued investments in infrastructure and technology are key to unlocking its potential.

The Middle East and Africa region offers opportunities in sectors like renewable energy, oil and gas, and smart grid development. However, political and economic instability can pose challenges. The region's abundant solar resources and the increasing adoption of renewable energy solutions are driving the demand for power electronics. Additionally, smart grid initiatives are gaining momentum to improve energy efficiency.

KEY MARKET PLAYERS:

ABB Ltd, Infineon Technologies AG, Mitsubishi Electric Corporation, Texas Instruments Inc., Vishay Intertechnology, Inc., Renesas Electronics Corporation, STMicroelectronics, NXP Semiconductors N.V., Fuji Electric Co., Ltd., Toshiba Corporation, Hitachi, Ltd., ON Semiconductor, Cree, Inc., Panasonic Corporation, Semikron International GmbH, Schneider Electric, Danfoss Group

RECENT HAPPENINGS IN THE MARKET:

• In 2023, Infineon expanded its portfolio of silicon carbide (SiC) power modules, which are more efficient and reliable, catering to the electric vehicle (EV) and renewable energy markets.
• In 2023, Texas Instruments introduced a new family of synchronous buck converters with advanced power management features for IoT devices and battery-powered applications.
• In 2023, STMicroelectronics developed high-voltage power conversion ICs for various applications, emphasizing energy efficiency and miniaturization.
• In 2022, NXP focused on expanding its portfolio of power management solutions for automotive and industrial applications, including motor control and electrification.