Jonanthon Eykyn, IHS
The fastest declining sectors of the AC-DC and DC-DC merchant power supply market may come as a surprise to many in the industry. Asking a selection of power supply professionals would likely garner varying responses.
A popular assumption might be the market for power supplies for desktop PCs. The desktop PC market is declining with demand a fraction of what it once was; however, there are still some industries and consumers that favour having a desktop PC over a notebook solution. The market for power supplies in desktop PCs is forecast to erode at an average annual rate of four percent per year until 2018.
Another assumption may be the market for mobile phone chargers. The introduction of the universal charging solution by major manufacturers means that most mobile phones are compatible with any charger that has a micro USB connector. This means that some mobile phones now ship without a bundled charger as the consumer can use the one from their previous handset, causing this market to erode at a projected average annual rate of six percent per year until 2018.
Neither of the above, however, is projected to drive the largest decline. That is forecast for power supplies in cellular infrastructure. The market for power supplies in cellular infrastructure applications is forecast to be worth $1.67 billion in 2014 or eight percent of the total AC-DC and DC-DC merchant power supply market. This represents a slight growth on the previous year, mainly due to 4G rollout. However, by 2018, the market is projected to be worth £1.16 billion, an average decline of more than seven percent per year.
The reason for this is that the market for base stations is undergoing a significant change. Traditionally, the market was driven by demand for large macro base stations as mobile coverage was deployed across the globe. However, most of this deployment is now complete and the demand for macro base stations is transitioning from new demand to replacement and upgrade demand. Shipments of macro base stations will reduce at a forecast CAGR of -6.5% from 2013 to 2018 due to this saturation.
Much of the remaining demand is shifting towards smaller Pico and Femto base stations. These products have a much lower range (200 m and 10 m respectively, compared with up to 35 km for a macro base station) and are used to plug the gaps in a network and to offer enhanced coverage. Unit shipments of these products are predicted to grow at CAGRs of 54% and 86% respectively, from 2013 to 2018 although overall shipments will remain relatively low.
This transition is very pronounced in the power supply market. Whereas a macro base station can easily require 1kW or more and several power supply units, the power rating of smaller base stations is much lower and they typically require just a single lower cost AC-DC adapter. Both unit demand and average selling prices of power supplies for base stations are therefore forecast to decline resulting in an overall market decline.
Despite the forecast decline mentioned for specific sectors, the total market for AC-DC & DC-DC merchant power supplies remains healthy and is predicted to grow by an average of more than four percent per year from 2014 to 2018.