According to iSuppli, following the slowdown in economic growth in 2009, China's power management IC (PMIC) market is expected to expand strongly in the next few years, attracting more domestic companies to join.
China's PMIC operating income is expected to drop to US$3.9 billion in 2009, a 6% decrease from US$4.2 billion in 2008. However, due to the recovery of China's overall semiconductor market and huge domestic demand, the market is expected to increase to US$4.7 billion by 2012.
The four PMICs with the highest operating income in 2009 were linear regulators, DC-DC switching regulators, driver ICs and power management chips, with a total operating income of US$2.2 billion, accounting for 56.6% of the overall power management market operating income. These products are expected to continue to dominate over the next four years.
PMICs are used in all types of electronic equipment. But like China's overall semiconductor market, power management ICs are mainly used in data processing, wireless communications and consumer electronics applications. These three major applications accounted for US$3.5 billion or 90.6% of overall power management IC sales in 2009.
Foreign companies dominate China's power management market. The top 10 manufacturers are all European and American companies, with Texas Instruments (TI), National Semiconductor (NS) and Fairchild leading the way in terms of overall market share. Second-tier manufacturers are mainly Japanese manufacturers such as Toshiba, NEC, Sharp and Fujitsu. Taiwanese manufacturers such as Richtek have achieved success in the low-end market, especially in the consumer electronics market.
Leading suppliers are often IDM manufacturers, but unlike this, only three domestic power management IC manufacturers in China have adopted this model. Moreover, most domestic suppliers have a relatively short history and are small in scale. At the same time, only Shanghai Advanced Semiconductor (ASMC), Belling and China Resources Upper China Technology Co., Ltd. (CSMC) are specialized analog foundries that can provide mature analog processes.
However, iSuppli is optimistic that in the next five years, Chinese companies will succeed in the power management market and launch strong challenges to international manufacturers, just like the situation in the logic market. However, iSuppli believes that if Chinese companies want to succeed, they should develop an IDM model to integrate foundries and fabless design companies.
The power management IC industry is a hot growth market in China and an attractive opportunity, especially as the overall semiconductor market is in recession.
