Expect a seller’s market for power management integrated circuits for the rest of the year because of strong demand and limited production capacity.
A double-digit increase in unit demand, tight supply and higher prices will result in the worldwide power management integrated circuit (PMIC) growing 19 per cent this year.
PMIC unit demand will rise 13 per cent while prices will increase five percent, resulting in revenue growing from $14.6 billion in 2020 to $17. 4 billion in 2021, according to researcher IC Insights. Unit demand will increase through 2025. Unit shipments rose 68.4 billion in 2020 to 77.5 billion in 2021 and will rise to more than 110 billion in 2025. The average price will increase from $0.21 in 2020 to $0.22 in 2021 and hold steady through 2025, according to IC insights.
The researcher noted that despite the pandemic that shut down or slowed production of a lot of electronics equipment for weeks in the first half of last year, the PMIC market still grew four per cent as unit demand and prices increased about two percent as equipment and component demand bounced back in the second half of 2021.
PMICs include linear and switching regulators, power management application specific standard products, battery charging and management chips, supervision/sequencing/motor control devices and voltage reference products.
The projected increase in revenue and demand for PMICs is coming from a wide range of customer segments including the automotive industry, computers, 5G handsets and infrastructure, among others.
“Power management ICs are critical components in just about every system,” and demand for vehicles, computers, 5G phones and other equipment is rising, said Brian Matas, vice president, market research for IC insights. With increased demand and limited production capacity, there are shortages of PMICs and prices are increasing.
In fact, shortages started to occur in the second half of last year when demand for PMICs increased when the auto industry rebounded in the third quarter after suffering a downturn in the first and second quarters. When the auto industry recovered “other end-use segments were going strong such as computers, 5G cell phones and video game consoles,” said Matas. There was not enough capacity to meet all the demand resulting in serious shortages for PMICs and other parts.
The bad news for chip buyers is shortages continued in the first quarter of 2021 as many semiconductor manufacturers, including foundries, are running at full capacity or near capacity, said Matas.
