Power Management Integrated Circuits (IC) Market to 2020 - Battery Powered Portable Gadgets to Drive Sales Growth

16 Sep 2010 • by Natalie Aster

GBI Research’s Semi-conductor’s report, “Power Management Integrated Circuits (IC) Market to 2020 - Battery Powered Portable Gadgets to Drive Sales Growth provides the key market statistics and analysis on the Power Management IC industry. The report covers the key market drivers, restraints and growth forecasts for the major segments in the Power Management Industry.

Rapid adoption of smart phones is expected to boost the demand of Power Management ICs. The usage of smart phones is set to increase dramatically with the sales volume forecasted to go from 174 million in 2009 to 500 million in 2014 at a CAGR of 16.28%. The deployment of next generation mobile networks such as 3G in India and 4G in South Korea is anticipated to aid the sales growth of smart phones.

OEMs and ODMs of smart phones are increasingly using modern Power Management ICs because of their superior capabilities, higher efficiency, and smaller form factor.

This report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GBI Research’s team of industry experts.

Glut in Battery-Powered Portable Consumer Devices is Expected to Cause Sales Growth of Power Management ICs.

The growing use of battery-powered consumer devices is expected to be a key growth driver of Power Management ICs during the forecast period 2010-2020. Power Management ICs find their usage in consumer devices such as smart phones, digital cameras, mp3s, iPods, LCD TVs, washing machines, and refrigerators. Power Management ICs are typically used for power supply and battery management applications in electronic devices. The Power Management IC revenue share from consumer appliances is expected to rise from $1,782m in 2004 to $2,751m by 2016.

The rapid adoption of smart phones is expected to boost the demand of Power Management ICs. The usage of smart phones is set to increase dramatically with the sales volume forecasted to rise from 174 million in 2009 to 500 million in 2014 at a CAGR of 16.28%. The deployment of next generation mobile networks such as 3G in India and 4G in South Korea is anticipated to aid the sales growth of smart phones.

OEMs and ODMs of smart phones are increasingly using modern Power Management ICs because of their superior capabilities, higher efficiency, and smaller form factor.

Energy Efficiency Concerns Drive the Overall Demand for Power Management ICs

Consumer electronics companies are raising the bar in terms of reducing the energy consumption of their products and this trend is expected to increase the demand for Power Management ICs. Consumer device vendors are going for energy efficiency certifications such as Energy Star and TCO. The requirements for such energy efficiency certifications are getting increasingly stringent which is further accentuating the need for Power Management ICs in electronic devices.

The sales revenues of Power Management ICs are expected to grow at a CAGR of 6.27% between 2009 and 2016.

Emerging Asian Markets to Provide Opening for Sales Growth

The consumption for Power Management ICs in Asia is expected to show a marked growth between 2010 and 2020. Asian countries have become both the world’s largest consumer and supplier of electronic goods due to their huge population and the rising per capita income, plus the favorable government policies.

For instance, China with the second largest economy in terms of nominal GDP is the fastest growing economy in the world. China holds the largest supply and consumption of Power Management ICs with sales revenue of $2,387m in 2009. The top semi-conductor companies in China are SMIC, Hua Hong NEC and HeJian.

China’s success has been due to its flexible government policies, low manufacturing costs, efficient infrastructure and the improved literacy rate.

Taiwan’s TSMC was the first foundry company to be set up in an Asian country. It is by far the largest semi-conductor company with a market capitalization of $ 40.4 billion as of January 2009.

Almost all the ODMs and OEMs in the electronics market have their manufacturing base in this region. The cluster of these companies in this region is due to the availability of a vast pool of cheap human resource and the supportive government policies.

Growth in Passenger Car Sales in Developed Economies is Expected to Have a Positive Knock-on Effect on the Demand for Power Management ICs.

The expected take-off of passenger car sales in developing economies such as China, India and Brazil will have a positive knock-on effect on the sales growth of Power Management ICs. The increased usage of electronics in automobiles in power steering, electric compressors and electric brakes, is expected to lead to demand growth for Power Management ICs.

A Number of Investment Announcements by the Chinese Government is Expected To Reinforce China’s Dominance in Semiconductor Manufacturing

The Chinese government has announced a number of investment plans with the objective of promoting semiconductor manufacturing in mainland China. In an attempt to increase the country’s production level of foundries by at least two times, the government is setting out policies to exempt chip companies in China from the corporate income tax net. Also the Chinese government has cancelled the export tax rebate policy.

In 2009, the Chinese government funded as many as 54 projects aimed at improving semiconductor manufacturing process technology, equipment and material parts. It is expected to invest around $30 billion by 2020 in the semiconductor industry, with a special focus on 90nm production, 65nm pilot line manufacturing and 45nm technology. China is anticipated to invest $2.6 billion until 2012 on VLSI (Very Large Scale Integration) equipment and materials research projects. $7 billion has been earmarked by the Chinese authorities for setting up new fabrication facilities over the period 2009-2014.

Launch of Tablet PCs such as iPad is Anticipated to Boost the Consumption of Power Management ICs

GBI research expects the advent of Tablet PCs to give a significant boost to the demand for Power Management ICs. New electronic products such as the iPad and LED backlight TVs are seeing increasing adoption among consumers. This is expected to increase the consumption of Power Management ICs. The demand for Power Management ICs is expected to increase further with key PC vendors such as Hewlett Packard and Microsoft investing heavily in on tablet PCs. As an example, Dell has recently launched a brand called “streak” to take on the iPad.

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