By Victoria Fodale, senior analyst, IHS Markit
The world market for merchant power supplies -- which manufacturers sell to external companies, rather than to their own internal divisions -- rose 3.9 percent year over year to reach $19.7 billion in 2015. Growth is expected to remain flat in 2016, before stabilizing to modest growth from 2017 to 2020. IHS Markit forecasts that the total market will surpass $20 billion in revenue by 2017 and is projected to reach $23 billion by 2020.
AC-DC Non-Commodity Market to Exceed AC-DC Commodity Market in 2016
IHS Markit splits the market into “commodity” high-volume consumer power supplies and lower-volume “non-commodity” power supplies, in order to improve the clarity of the analysis.
The AC-DC non-commodity market is projected to be the fastest-growing market on a revenue basis from 2015 to 2020, with a compound annual growth rate (CAGR) of 9.2 percent, according to the IHS Markit Power Supplies Intelligence Service. The increase will be driven by strong growth in the lighting and military and aerospace markets, in particular. In 2016 the AC-DC non-commodity market is expected to exceed the AC-DC commodity market in revenue, becoming the largest merchant power-supply market by type.
Revenue for the AC-DC commodity market peaked in 2015, as demand declined in key commodity applications. Commodity AC-DC power supplies include all high-volume, consumer-based power supplies, for example, power supplies for desktop PCs, notebooks, tablet PCs and mobile phones. The category also includes all power adapters and chargers, except the non-commodity products used for industrial and medical applications.
Revenue for the DC-DC converter market is estimated to have grown by almost 4 percent in 2015. Much of this growth was driven by the server, networking and the military and aerospace markets. Growth is predicted to slow from 2016 to 2020, as demand for some segments of end-equipment weakens – particularly, cellular infrastructure.
Revenue decline for commodity power supplies predicted to slow growth in Asia-Pacific IHS Markit predicts the market in Asia-Pacific will grow much slower from 2016 to 2020 than in the other regions. This is because of Asia’s established focus on commodity power supplies.
Asia-Pacific is estimated to have been the largest regional market for AC-DC power supplies in 2015. It accounted for 67.2 percent of revenues and 77 percent of units shipped. However, Asia-Pacific is expected to retain the largest revenue share for both commodity and non-commodity power supplies from 2015 to 2020. Revenue share gains projected for the Americas and EMEA will come from sales of non-commodity power supplies.
Product mix change expected to increase ASPs
ASPs are forecast to slowly to rise as the product mix for applications changes over time, as demand softens for commodity products in compute, mobile and consumer segments from 2015 to 2020. In 2015, the percentage split between commodity and non-commodity power supplies was 91.8% and 5.7%, respectively.
LED Lighting Leads Growth in Non-Commodity Power Supplies
Lighting is projected to be the fastest-growing application from 2015 to 2020. The market for merchant power supplies in lighting applications is estimated to have been worth $1.26 billion in 2015, which accounted for 6.4 percent of total market revenues. The lighting market for power supplies is projected to increase to $5.2 billion in 2020 as LED lighting adoption penetrates the commercial markets. Growth is being driven by demand for power adapters for LED-lighting applications, specifically LED luminaires. Unlike power drivers in LED lamps, power supplies in LED luminaires are typically external.
The mobile devices and chargers segment is estimated to have been the largest market for AC-DC & DC-DC merchant power supplies in 2015, accounting for an estimated 30% of total revenues. This market is typically high volume, low margin. It is expected to drop to 20.6% of the market by 2020. The mobile device and charger category contains mobile phones, all tiers of smartphones, all tiers of media tablets, and battery chargers for mobile communications.
These findings are from the latest annual study from IHS Markit on the global AC-DC and DC-DC merchant power supply market. The report is published as part of the IHS Markit Power Supply Intelligence Service, a comprehensive package of detailed forecasts, topical reports and regular analyst insight on the power supply market.
More International Trade
Yellen fully expects fresh sanctions on Iran in coming days
US Treasury Secretary Janet Yellen warned that the US will strengthen its sanctions on Iran within days after the nation’s recent attack on Israel.
Xi rebuffs Scholz pressure to rein in Chinese manufacturing
Chinese leader Xi Jinping told the German chancellor that a surge in clean-technology exports from the Asian nation has helped the world tackle inflation, pushing back against European and US…
Swiss Parliament rejects joining Russia sanctions task force
Switzerland’s parliament rejected a proposal for the government to join a US-led sanctions task force against Russia, saying cooperation with the body as an independent party is sufficient.
China’s exports to Russia slump amid US threat of war sanctions
China’s exports to Russia slumped in March, the first year-on-year decline since mid-2022, amid growing US threats of reprisal against Beijing if goods aid Moscow’s invasion of Ukraine.