An agonizingly slow rise in demand for power supplies has DC/DC converter vendors acceding to OEM pressure for products that cost less--even if they don't necessarily perform better.
At the Applied Power Electronics Conference and Exposition here last week, converter suppliers were preoccupied with meeting stringent cost-reduction initiatives set by OEMs, particularly in the telecom sector. Some suppliers introduced brick format DC/DC converters, emphasizing lower cost rather than breakthrough technology. Other vendors demonstrated simpler, point-of-load DC/DC converters that traded off isolation for smaller size and lower cost.
Over the past year, prices for DC/DC converters rated over 75W have eroded at least 15% and in the range of 10% to 15% for converters rated between 25W and 75W, according to Patrick Le Fevre, marketing director for Ericsson Power Modules A.B., Sweden.
"Everything is based on price. We can't go any lower," Le Fevre said, adding that some converter prices have fallen as much as 45% in the past three years.
Conditions are not likely to improve anytime soon. The DC/DC converter market this year is expected to show flat revenue growth as falling prices offset higher unit volumes, according to the Darnell Group, Corona, Calif.
But the drive to distributed power architectures, which wire together multiple converters, will help lead global DC/DC converter revenue to a compound annual grow rate of 9.7% through 2007, the firm added.
Jeff Shepard, a Darnell analyst, said looming replacement cycles for telecom and datacom equipment also offer some hope for suppliers. "By 2004, it's expected that the economy will recover and shake off what it acquired during the Y2K boom," Shepard said.
But DC/DC converter suppliers, still struggling with slumping earnings and massive restructuring efforts, see lower-cost products as the only short-term means of stimulating sluggish sales.
Last week, Ericsson introduced a 40A DC/DC converter in a half-brick format, the PKJ4000E series, that costs $42 each in 1,000-piece quantities--25% less than half-brick converters with similar specs, the company said. Le Fevre said costs were reduced by building the supply on one rather than two boards and by using the same power IC present in Ericsson's other converters.
Broadband TelCom Power Inc. has also joined the movement to lower-cost bricks, said James Lau, chief technical officer of the Santa Ana, Calif., company. Lau estimated that prices have fallen 5% per quarter over the past year.
Broadband TelCom showcased the SVH series, which Lau said costs about $35 each in volume. Introduced in November, the half-brick supply offers output voltages from 1.5 to 12V at currents up to 40A.
Low-cost converters don't represent the state-of-art in design or density. For instance, Lau said Broadband TelCom offers a smaller quarter-brick converter with performance and ratings similar to the SVH series, but at twice the price.
Other suppliers, like Celestica Power Systems, don't see the older technology as viable given that OEMs ultimately need higher density and performance.
"These products won't be that popular," said Ed Heacox, vice president for customers and market development at Celestica, Toronto. Heacox said OEMs will still pay to redesign products to accommodate the converters.
Celestica and suppliers like Artesyn Technologies and Power-One have stepped up development of point-of-load converters. One Celestica product, the SIP series, provides 5 to 16A at voltages down to 0.8V in single-in-line packages as small as 1.2 X 0.39 X 1.1in.
Besides being smaller than brick converters, Heacox said the point-of-load converters are less expensive, with as many as four or five equally a single half-brick part.
"If the number of voltages exceeds, say, five, non-isolated converters are less costly," said Mohan Mankikar, an analyst at MicroTech Consultants Inc., Santa Rosa, Calif.
Point-of-load converters sacrifice isolation circuitry and some output functions, leaving the OEM to design them elsewhere in the power system. Mankikar didn't view that as a burden, since many OEMs are using an isolated intermediate bus converter in their power systems.