MANHASSET, NY -- Power electronics is moving beyond its historic dependence on silicon, with silicon carbide and gallium nitride taking a 22 percent market share for $3.3 billion in sales by 2020.
The quest for increased energy efficiency has re-energized power electronics to grow to account for $15 billion worth of sales of discrete components in four key industry segments in next eight years, according to a report by market analyst Lux Research. The four areas are buildings and industrial, electronics and IT, renewables and grid storage, and transportation.
“There’s clearly a growing opportunity in power electronics, but the challenge for both current market players and would-be entrants is finding the places where these emerging technologies meet customer needs at the right price points,” said Lux Research analyst Pallavi Madakasira, in a statement.
For the report, Lux Research analysts calculated the payback period for SiC and GaN devices and calculated market shares based on the required payback period for each application, as well as delaying or accelerating factors that reflect industry conservatism, design cycles, timing for capacity build-outs, and other industry drivers.
One of the report’s findings is that while SiC, with its better maturity and reliability, has a head start, GaN is catching up thanks to innovators such as Efficient Power Conversion and Transphorm and incumbents like International Rectifier.
SiC is gaining mostly in renewables, capturing a 32 percent market share in solar, and is poised to capitalize on the grid storage boom.
On the VC front, Lux Research reports that over the past five years investors have funneled over $200 million into developers of advanced materials and devices for power electronics. 2012 promises to be a record-setting one for transactions with particular attention on substrate and GaN technology developers.
The report is part of the new Lux Research Energy Electronics Intelligence service, which covers light-emitting diodes (LEDs) and power electronics.