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Power electronics companies take diverse roads to success

Posted: 11 Mar 2015 ?? ?Print Version ?Bookmark and Share

Keywords:power electronics? integration? vertical? horizontal?

Analysts at Yole Dveloppement (Yole) has confirmed that the power electronics supply chain is evolving.

The study appeared in Yole's latest technology and market report, Status of the Power Electronics Industry: Chinese companies' vertical integration is challenging diverse historical market leaders, while Europe and U.S. companies are pushing horizontal integration. What is the shortest road to the success?

"The power electronics supply chain is very diverse and mostly application- and local market-dependent," said Mattin Grao Txapartegi, Technology & Market analyst at Yole. "European and American players for example, prioritise horizontal integration, keeping proven expertise in a specific level of the value chain."

Such companies diversify their activities, thanks to the acquisition of complementary knowledge and sign partnerships to develop their portfolio. They also outsource part of the manufacturing, especially with Asian partners. Moreover, European and North American players propose R&D services. IMEC, APEI, Fraunhofer, PRIMES or GE Global research are some examples.

Power electronics

Under this report, Yole's team analyses the major mergers and acquisitions of 2014, for instance International Rectifier's acquisition by Infineon, in order to understand their context and purpose.

"The acquisition of International Rectifier is an important step for Infineon to foster our position as a global market leader in power semiconductors," said Dr. Reinhard Ploss, CEO of Infineon in the press release last January 2015. Under this acquisition, Infineon enlarges its product portfolio. With a deep understanding of customers' needs, the power electronics leader accelerates its strategic approach "[f]rom product thinking to system understanding."

In parallel, Asian companies select the vertical integration strategy in order to be fully integrated and optimise the costs. These players acquire competencies internally to build an overall system. Under this strategy, the Asian companies would like to enlarge their positioning all along the supply chain as well as reach local markets.

"Some system manufacturers, such as Tesla or BYD, have understood the importance of developing their own power electronics and energy management systems for traction, chargers and batteries in order to offer extended added-value," said Dr. Pierric Gueguen, Business Unit manager for Power Electronics & Compound Semiconductor activities, Yole.

Japanese players are already vertically integrated and involved in multiple applications simultaneously to benefit from their technologies across different markets. Chinese players are developing this vertical integration in order to create major market leaders in each application segment such as SunGrow in PV, GoldWind in wind and BYD in EV/HEV.

In this report, Yole especially reveals a detailed analysis of the Chinese market, which is driven by Chinese government policies. In this changing environment, western and Japanese players need to bring high added-value solutions to be able to compete with Chinese companies. Yole's report includes a complete section on main players' strategies.

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