Power management ICs to grow 5%

However, this year, the competitive landscape will be drastically changed.

In January 2015, Infineon completed the acquisition of IR and, in July, NXP is scheduled to complete its acquisition of Freescale.

These two mergers will enable Infineon and NXP to be more competitive in technology, manufacturing efficiency, pricing, and marketing strategy. IHS expects a very competitive contest for the market-leader position in the power management semiconductor segment in the coming year.

Demand was particularly strong for power semiconductors in the automotive and industrial end markets.

Increased demand was led by an increase in power semiconductors used in powertrain, infotainment and advanced driver assistance systems (ADAS) applications in automotive applications.

In addition, home control, automation, and energy generation and distribution were the fastest-growing applications in the industrial segment.

However, other end markets — such as consumer, data process, wired and wireless communication — experienced weaker overall demand in 2014 compared to the previous year.

“Companies that aligned their marketing and investment strategies to address industrial and automotive applications performed very well in 2014,” says IHS’ Jonathan Liao, “Texas Instruments, Analog Devices, NXP and Infineon were some of the growth leaders with strong product portfolio offerings in the industrial and automotive categories. By capturing growth momentum, and outshining their competitors, these companies increased their power management revenues more than 10% in 2014. On the other hand, companies that were not as successful in transitioning from consumer and wireless communications end markets ended with much lower growth rate – and sometimes even lost revenue in 2014.”

In terms of regional focus, the United States and China were two of the strongest markets for power management companies to focus on last year. In 2014, 30% of all power management semiconductors were shipped to China, due to the high concentration of original equipment manufacturers (OEMs) for wireless handsets and consumer-electronics assemblies.

In the industrial end market last year, China consumed nearly 16% of all industrial semiconductors. This trend is expected to strengthen this year, as China continues to invest in manufacturing, automation, smart cities, transportation and power infrastructure. Automotive sector growth continues, as semiconductor content per car increases at a rate that offsets slowing growth in automotive manufacturing in China.

In the United States, IHS predicts that the economy will grow nearly 3% in 2015. Consumer confidence and spending remain strong: jobs growth is consistent, household finances were the best they have been since early part of the decade and fuel prices have dropped. All of these factors contributed to increased household spending.

“As consumer spending increases, the overall sales of consumer electronics, computers, wireless handsets, and automobiles may also increase. End market growth will also benefit the sales of power semiconductor components,” says Liao.

“To ensure continued growth, successful companies must focus on the industrial and automotive end markets in the near term,” Liao said.

Industrial revenue is expected to grow 5% in 2015, with increased sales in the construction and home-control markets, as well as in energy generation and distribution, and automation markets. Some of the top growth industrial segments in the near term are LED lighting, Internet protocol (IP) cameras, digital video surveillance products, and smart grid solutions.

In the automotive industry, the trend of electrification of cars continues. Connected cars, ADAS, and infotainment systems are all expected to cause increases in the number of semiconductors in each automobile shipped. Growth in this sector will help increase near-term revenues for power semiconductors in the automotive segment.