## Omdia: Power semiconductor market set for 6.9% decline in 2020 as COVID-19 hits smartphones & automotive

##### 30 April 2020

The global power semiconductor market is set for a steep decline in 2020 as demand for these components plunges from the key markets of smartphones and automotive electronics due to the COVID-19 crisis, according to Omdia.

Omdia is a global technology research house established following the merger of the research division of Informa Tech (Ovum, Heavy Reading and Tractica) and the acquired IHS Markit technology research portfolio.

Omdia now forecasts that the overall power semiconductor market will undergo a 6.9% decline in 2020, with revenue falling to $43.1 billion in 2020, down from$46.3 billion in 2019. The power semiconductor market consists of three segments: power integrated circuits (ICs), power discretes and power modules.

Discrete and module market revenue will decline by 10.6% in 2020, according to the Interim Power Discrete and Module Market Tracker published this month. The previous forecast, issued in March, anticipated that the market would be flat in 2020, with a negligible 0.1% decline.

Furthermore, Omdia projects power IC revenue in 2020 will decline 3.9% from 2019, a rare case of a two-year slip in that market. This current forecast puts the Power IC revenue for 2020 at $23.4 billion, wiping out most of the market gains since 2016. In terms of revenue, the largest consumer of power ICs is the wireless market, a segment that includes mobile handsets. Before the COVID-19 outbreak, Omdia was forecasting a 3.4% rise in wireless market revenue due to increasing sales of smartphones. However, as the impact of the coronavirus has come into sharper focus, Omdia has cuts its forecast and now expects a 9.6% decline in wireless revenue. Another hard-hit segment is the automotive market, where vehicle sales have been plummeting due to shuttered dealerships and vehicle production line stoppages. Motor vehicle sales are likely to drop by a double-digit margin in 2020. On the other hand, rising electronic content in some automotive systems—such as advanced driver assist and vehicle electrification—will moderate the power IC revenue declines to only 6%. Taking a closer look at the power discrete and module market outlook, discrete power semiconductor revenue will fall by 10.7% this year, while power semiconductor modules will drop by 10.3%. Overall, the power discrete and module market will shed$2.4 billion in revenue compared to 2019.

Looking at discrete power semiconductors in detail, the 2020 revenue decline is expected to come mainly from standard MOSFET power transistors. MOSFET revenues are expected to decrease by around $1.4 billion in 2020, down 16.5% year-on-year, before recovering somewhat in 2021. However, MOSFET revenues will not return to 2018 levels until after 2024. Bipolar power transistor revenues are forecast to decrease by around$170 million in 2020, down by 15% year-on-year, and IGBT power transistor revenues are anticipated to fall by around $110 million in 2020, down 6.8% year-on-year. In contrast to discrete power transistors, rectifiers and thyristors will limit their declines to less than 1% in 2020. Looking at power modules in detail, the 2020 revenue decline is expected to come mainly from standard IGBT power modules and IGBT-IPMs. Standard IGBT power module revenues are expected to decrease by around$300 million in 2020, down by 11.1% year-on-year. IGBT-IPM revenues are forecast to decrease by around $270 million in 2020, down by 15.6% year-on-year, and MOSFET module revenues are anticipated to decrease by around$33 million in 2020, down by 11.9% year-on-year. In contrast to discrete power semiconductors, power modules will not mount a major revenue recovery in 2021. Instead, Omdia predicts the market will continue to decline, a phenomenon that will continue in 2022 and 2023, before recovering in 2024.

Unlike power discretes, the computing and data-storage segment is the bright spot in the power IC market. The stay-at-home, work-from-home, learn-from-home environment is driving increases in demand for data center equipment, notebook PCs and accessories such as external monitors and web cams.

—Kevin Anderson, senior research analyst for Omdia

Omdia is forecasting overall growth of 2.6% in 2020 for power IC usage in this segment.

Omdia is expecting a robust recovery for power semiconductors in 2021 based on strong demand for vehicles, as pent-up demand is unleashed after two years of dismal vehicle sales. It also anticipates that consumers will want to spend again on televisions, mobile device upgrades and other consumer goods once they are back to work. This recovery scenario is dependent on a gradual easing of restrictions in the developed world by mid-year, a manageable reoccurrence of the virus as we move into the next cold and flu season, and a successful vaccine rollout within 12 months.