Tuesday, February 7, 2023
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High Levels of Growth in EVs have Led to a Spike in the Sales of Discrete Semiconductors

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The Global Discrete Semiconductor Market is estimated to have grown to a size of nearly US$35 Billion in 2022 from approximately US$25 Billion in 2017. The market is expected to grow further to a size of around US$55 Billion by 2028 at a CAGR of around 7% for the forecasted period of 2022-2028.

Unlike an integrated circuit, discrete semiconductors are expected to perform a singular electronic function. Usually, discrete semiconductors are used in constructing circuits that can withstand considerable voltage load or current stress. They also help realize basic circuit functions. Rather than being built on a single semiconductor substrate with other components, discrete semiconductors have circuits built out of singular semiconductor units, connected together on a circuit board or terminal strips.

Growth in the automotive market, especially in the Electric Vehicles segment, is seen as one of the major reasons for the surge in the demand for discrete semiconductors. According to reports published by the International Energy Agency (IEA), consumers across the globe spent nearly US$250 billion on Electric Vehicle purchases in 2021. Growth in the sales of EVs led to a sharp increase in end-use investment in electrification, which accounted for more than 65% of total end-use investments in the transport sector in 2021 and was estimated to cross 74% in 2022.

Such high levels of growth in EVs and electrification have led to a spike in the sales of discrete semiconductors that aid in developing autonomous vehicle technology, regenerative braking systems, sensors & cameras, advanced driver assistance systems (ADAS), etc. Discrete semiconductors have also proven effective for components that are conducive to extreme voltages and environmental conditions.

The increasing demand for efficient electronic devices is also driving the growth in the market of discrete semiconductors. According to an IEA report, buildings are responsible for around one-third of the world’s total final energy consumption. IEA also estimates an annual growth of 0.8% in household energy demand from 2016 to 2040.

Such growth in energy consumption calls for efficient power management systems at the level of individual/household consumption. Examples of such smart devices include speakers with voice control, sensor-based, wearable activity trackers, smart camera-equipped doorbells, or self-driving cars. Power management systems, required to run such smart and efficient devices, require discrete semiconductors as switching devices and rectifiers that can convert electrical signals or change the voltage or frequency of an electrical current as and when required.

Despite consistent growth in total market size, discrete semiconductors still constitute less than one-fifth of the global semiconductors market. As per the numbers published by industry publication IC insights in February 2022, the combined sales of Optoelectronics, Sensors/Actuators, and Discrete (O-S-D) accounted for only 17% of the world’s total semiconductor market in 2021. Integrated circuits come with a host of advantages over discrete semiconductors. For instance, the physical size of ICs is significantly lower than that of the discrete circuit. Resultantly, the weight of an IC is also less and consumes less power.

In the initial days of the Covid pandemic, the semiconductor market, like many other industries, suffered from supply chain disruptions, frequent lockdowns, government restrictions on transport, unavailability of raw materials and labor, etc. However, the market started stabilizing in the second half of 2020 and the sales started crossing expectations during the 2021 global economic rebound, showing healthy signs of recovery from shortages, restricted supplies, and higher prices.

Competitive Landscape

The Global Discrete Semiconductor market has nearly 100 players, including globally diversified players, regional players, and country-niche players having expertise in addressing specific technological needs relating to one or multiple specific sub-segments.

Large global players constitute ~25% of the market in terms of the number of competitors, while regional players represent largest number of competitors.

Recent Developments Related to Major Players

In Mid-December 2021, STMicroelectronics introduced a family of GaN power semiconductors under its STPOWER portfolio. These newly launched family of products are capable of notably reducing the consumption of power and facilitating slimmer designs for a variety of end-use consumer electronics products, such as chargers, external power adapters for PCs, LED-lighting drivers, and power supplies to be used inside televisions and other home appliances.

In August 2022, Toshiba introduced its 3rd generation silicon carbide (SiC) MOSFETs, capable of delivering low on-resistance and reducing switching loss. Toshiba is dedicated to coming up with more such products in the future as part of its commitment to help realize a carbon-free economy with high-performance power devices.

In April 2022, Nexperia added to its existing lineup of discrete components that came in leadless DFN packages with side-wettable flanks. The company expects, owing to their space-saving features and resilience, these components would help meet the demands of next-gen smart and electric vehicles.

Conclusion

The Global Discrete Semiconductor Market is expected to grow at a steady pace of ~7% during next 6 years and reach a revenue of ~US$55 Bn by 2028, owing to its applications in the consumer electronics and automotive markets.

While the demand for high-energy, low-power devices would drive growth from the consumer electronics part of the market, increasing electrification and automation requirements in vehicles would fuel demand from the automotive category.

Uses in the medical industry, construction industry, and lighting industry, in general, would also contribute to the growing demand for discrete semiconductors. There are nearly 100 competitors but regional players comprise the largest number among them.

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