The global power electronics market is expected to grow at a moderate CAGR during 2016 – 2022. Among the various power electronic devices, power modules generated highest revenue in 2015, whereas consumer electronics was the most profitable end-user in 2015.
The increasing requirement for higher power densities across several industries is one of the key drivers for the global power electronics market. Power density is a prime factor in the power electronics industry, particularly in high-power applications. For instance, power electronic devices in electric rail traction drives, wind power generators, inverter systems, and solar power generators use power electronic devices to increase their operational efficiency.
Power electronic devices ensure effective delivery of power, providing high reliability, security, and flexibility to the power system. Power electronic devices play a key role in the conversion of the existing electrical grids to next-generation networks. At present, approximately 30% of all power generation is carried out using power electronic devices, either at the point of power generation or at the final consumption of electricity. It is expected that by 2030, up to 80% of the electricity produced will use power electronic devices. The high level of integration of power electronic devices with electricity grids, increase in demand for network reliability, government focus on reduction of environmental pollution and energy savings is further expected to drive the market during the forecast period.
The adoption of power electronic devices in the renewable energy sector is creating new growth avenues for the Global power electronics market. The global need to generate electrical energy from renewable energy sources is escalating rapidly. It is projected that global energy consumption will increase by over 60% by 2030, which is expected to boost the adoption of power electronics in renewable technologies such as those for solar and wind power. These devices are used in wind turbine converters, grid converters, and inverters in solar panels to increase power efficiency and switching speed. Thus, the growing need for improved thermal capacity and power cycling capacity is also playing a substantial role and thus increasing the implementation of power electronics in the renewable energy sector.
In recent years, the power electronic companies have been increasingly spending a considerable amount of their revenue on R&D to stay ahead of their competitors and gain a larger market share. For power electronics device manufacturers, R&D is crucial because superior innovations can provide competitive advantages over other players. In addition, a key buying criterion for customers is efficiency, which can be achieved and improved through R&D. Owing to these factors, the trend of high R&D expenditures in the global power electronics market is expected to continue during the forecast period.
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