By John Ong, Research Analyst
The increase in demand for Power Electronics Devices has increased exponentially over the past decade. This is mainly fueled by an increase in demand in the telecommunications and consumer electronics markets in the world. In addition, with the growing awareness and opening up of markets, especially from India and China, the demand for power electronics is set to grow correspondingly with the rising affluence of the people in these countries. The increase in demand of power electronics are expected to grow in tandem with the increase in demand for telecommunications devices such as cellular phones and the base stations needed to maintain the cellular networks. In addition, consumer electronics devices such as IT equipments and MP3 players is also expected to add fuel to an already fast expanding power electronics industry.
Demand for devices such as AC-DC Switching Power Supplies, DC-DC converters and rectifiers is showing potential to grow 2 to 3 times the current size within the next decade. This represents a huge market for suppliers to tap into. At the same time, this market is also becoming one of the most fragmented and competitive in the world.
Due to the relatively lower barriers to entry in this market compared to that of other markets in the power industry (such as generator sets, transmission and distribution), developing countries with focus on light industries can easily adopt to producing power electronics in the lower power range of below 300W. The initial set up price of a production line to produce power converters are not prohibitively high, and depending on the export target, the margins can be relatively lucrative.