Electronics Weekly
The power module packaging materials market will reach almost $6.1 billion by 2030 with a CAGR of almost 11% between 2024 and 2030, says Yole Group.
Packaging materials costs accounted for approximately 32% of the total cost of power modules in 2024.
The power module packaging supply chain is continually being reshaped with newcomers, M&As, OEM strategy evolution and new manufacturing locations.
New companies are starting to manufacture power modules, and established power module players are expanding their product portfolios and forming new partnerships and M&As.
Today, the leading power module suppliers are mainly located in Europe and Japan. They include Infineon Technologies, Semikron Danfoss, STMicroelectronics, Fuji Electric, Mitsubishi Electric, and Rohm.
These traditional market leaders are increasingly facing intense competition from Chinese companies, such as StarPower, CRRC, BYD, United Automotive Electronic Systems (UAES), ACCO Power, and MACMIC, as well as Tier-1 automotive manufacturers like Denso, Bosch, and BorgWarner.
“We see more and more Asian packaging material players entering the power electronics packaging industry. And this strongly pressurises European players to reduce costs,” says Yole’s Shalu Agarwal.
Innovations include the shift toward smaller-sized modules, power modules integrated with coolers, lower-inductance designs, hybrid SiC-MOSFET and Si-IGBT power modules, the concept of embedded die PCB packaging and the potential of GaN-based power modules.
Reducing the production costs of power modules is crucial and most power module manufacturers, including Infineon Technologies, onsemi, Rohm, and STMicroelectronics, have established their packaging facilities in China and Southeast Asia to adapt their activities to satisfy the evolving market.
This strategic decision allows them to benefit from lower operational costs. It is also an opportunity for them to be closer to their Asian customers, as demand in China remains stronger than in many other countries.
Key suppliers of power module packaging components are primarily located in Japan. Yole Group identifies Shin-Etsu, Sumitomo Bakelite, and Resonac, amongst many more.
In the United States, Rogers Corporation, MacDermid Alpha, 3M, Dow, and Indium Corporation are also part of the ecosystem.
In Europe, Heraeus is also active. Most of these suppliers have manufacturing facilities in Asia, particularly China, Japan, Singapore, and Malaysia.
In China, international companies like FLH (formally known as Ferrotec), Tanaka, Heraeus, MacDermid Alpha, Shin-Etsu, and Denka are dominant suppliers of power module packaging components.
Additionally, smaller Chinese companies are making their mark. They are supported by major corporations like BYD, Bosch, and Infineon Technologies, for example. This trend hints at significant growth in the number of packaging materials providers in China in the coming years.
Several power module packaging component companies are relocating or planning to move their production facilities to countries with lower costs, such as China, Malaysia, Vietnam, Hungary, and Romania.
NGK Insulators plans to manufacture ceramic substrates in Poland, while Heraeus is launching a new production line for ceramic substrates (AMB 2.0) in China. KCC has already started its ceramic substrate manufacturing facility in Vietnam.
Many European and US companies, including Henkel, MacDermid Alpha, and Rogers Corporation, are focusing on China to expand their packaging components in response to the increasing demand for electric vehicles (xEVs) and renewable energy solutions.
