Agency: Due to the expansion of Texas Instruments, the global power management IC production capacity in the first quarter will increase by 4.7% year-on-year
According to Evertiq, the impact of the off-season, corporate plans to scale back capital expenditures, and the continued downturn in the broader consumer electronics market will limit demand for power management ICs in the first quarter.
As a leading supplier of power management ICs, Texas Instruments (TI) will start the new production capacity of its production bases RFAB2 and LFAB at the same time. In view of this, TrendForce expects that the global power management IC production capacity in the first quarter will increase by 4.7% year-on-year. In the power management IC market, lower demand for consumer electronics, networking equipment, and industrial equipment continued to exert downward pressure on prices. Therefore, it is expected that the quotations for power management IC orders in the first quarter will drop by 5-10% quarter-on-quarter. In contrast, demand for automotive products remained stable due to the trend towards vehicle electrification. While broader economic weakness is creating uncertainty across the auto market, prices are not expected to fluctuate widely as buyers and sellers of automotive products mostly form long-term partnerships. Therefore, demand from the automotive market will be the only major driver of power management IC sales.
Major IDMs control 63% of the power management IC market
There are various suppliers of power management ICs, including major international IDMs as well as fabless IC design houses. Suppliers of IDMs include Texas Instruments, ADI, Infineon, Renesas, ON Semiconductor, STMicroelectronics and NXP. Suppliers serving as fabless IC design houses include Qualcomm, MPS, MediaTek, Anpec, GMT, Leadtrend, Weltrend, Silergy, BPS, and SG Micro.
Calculated by shipment market share, IDM controls 63% of the global power management IC market in total. Among them, Texas Instruments ranks first with a 22% global market share. The advantage of Texas Instruments lies in its wide range of products, consistent product quality and sufficient production capacity. Hence, it has had a huge impact on the global power management IC market. Judging from the overall price trend of power management ICs in 2022, IDM can further push up ASP to cope with rising inflation. On the contrary, quotations from fabless IC design companies were the first to show a weakening trend.
Suppliers are cutting prices to boost sales of power management ICs for consumer electronics
TrendForce pointed out that the price of power management ICs for consumer electronics products (such as laptops, tablets, TVs, and smartphones) will start to decline in the third quarter of 2022, with a quarter-on-quarter decline of 3-10%. In the fourth quarter of 2022, the prices of various consumer power management ICs, such as those related to AC-DC, DC-DC, LDO, buck, boost, PWM, and battery chargers, dropped another 5- 10%. In addition to this state of development, the demand for power management ICs used in networking equipment and most industrial equipment has also started to weaken. The only applications that still show steady demand are a very small number of specific categories of industrial equipment (such as military hardware) and automotive products. At the time, order visibility for these applications had extended into the second quarter of this year, and there was no apparent attempt to drive sales of related power management ICs through price cuts.
However, TrendForce also pointed out that among the power management ICs embedded in industrial equipment and automotive products, IDMs accounted for more than 83% of the total market share. Most fabless IC design companies still struggle to penetrate these specific market segments, but their efforts have been aggressive as overall demand for consumer electronics remains subdued. Currently, fabless IC design companies are working to get their new automotive and industrial power management ICs certified as quickly as possible.
Regarding the lead time of power management IC orders, TrendForce's latest survey found that the current average lead time of fabless IC design factories is 12-28 weeks. In addition, existing inventories of certain models of power management ICs are so large that fabless IC design houses can begin shipping new orders as soon as they are received. As for IDMs, most of them still have long lead times. For power management ICs belonging to non-automotive applications, IDM's lead time is 20-40 weeks. For power management ICs belonging to automotive applications, IDM's lead time exceeds 32 weeks. On the whole, orders for automotive power management ICs are still in a state of allocation: there are fewer suppliers, and the links of chip manufacturing, module assembly, and qualifications are relatively lengthy.
