MANHASSET, N.Y. Once a bright spot in the long-troubled merchant power supply market, the dc-dc converter module sector is now projected to grow significantly less than anticipated just 12 months ago, according to market research firm Darnell Group.
The firm's report, "DC-DC Converter Modules and ICs," details a series of culprits combining to stunt growth in the dc-dc modules market. Darnell (Corona, Calif.) now projects a five-year global compound annual growth rate (CAGR) for dc-dc converter revenue of 8.6 percent, down from 10.5 percent previously.
"The anticipated 12.5 percent revenue shortfall cannot be explained by declining unit sales," stated Linnea
Brush, senior analyst with Darnell Group. "Unit sales for
dc-dc converter modules have been almost flat, and we reduced our previous 2006 worldwide forecast by just 2 percent for the current report (from 104.3 million to 102.0 million units)," she said.
Brush added, "The real damage to the market has resulted from the rapid erosion in pricing driven by a number of unrelated, and some unexpected, culprits."
Darnell noted that semiconductor suppliers are providing growing competition. Power management ICs and hybrid products are moving into higher-current nodes, thus forcing module makers to trim margins in order to remain competitive, the firm said.
Some suppliers, such as Power-One Inc., have responded by going the semiconductor route. The Camarillo, Calif., power supplier has developed an advanced digital control architecture and adopted a fabless business model (see May 28, 2004 story). Power-One has formed alliances with semiconductor suppliers, such as Atmel Corp., to foster adaptation of its power architecture.
Still, dc/dc module makers are likely see increasing pressure as the power supply market changes. Darnell noted that Delta Electronics has applied its ac/dc power supply pricing model to dc/dc modules. Moreover, the ongoing consolidation of the industry, as exemplified by the merger of top-tier power supply companies such as Emerson and Artesyn last February will accelerate pricing pressures, Darnell noted.