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PowerLines by Linnea Brush
April 28, 2008
Creating Demand for Power Supplies
Power Channels: Digital Power, Power Components, Switch-Mode Power
What drives demand for dc-dc converters? New designs? New applications? Being as inconspicuous (and cheap) as possible? One could argue that nothing really drives demand for power supplies – they are a “necessary evil” and the less you have to think about them, the better.
A recent report from Frost and Sullivan challenges these assumptions, but I wonder if they’re putting the cart before the horse. I read the headline, “New and Improved Designs Boost Demand for DC-DC Converters” and wondered if this was a logical statement. Very few power supplies are standalone products. Even battery demand is driven by demand for the systems they’re used in. The new report says that the dc-dc converter market is growing due to “better designs and value add-ons that improve efficiency and reduce heat dissipation.”
Perhaps this refers to dc-dc converter pricing. The report also says that, “Better designs and improvements at the component level have allowed for premium pricing by vendors, despite lean manufacturing systems being in place.” Actually, ASPs for dc-dc converter modules are falling at a muted rate of between 0.3% and 3.1%. The lower power segments are facing increased competition from down solutions. And as applications require more power, the module market is moving towards higher power levels. As such, the ASP decline is muted by rising wattages and current levels.
Dc-dc converter manufacturers are attempting to meet the needs of specific applications, hoping to capitalize on the “efficiency” craze or the “green” movement that has gripped the world. This still requires converter manufacturers to enable system performance, however. OEM systems that need a dc-dc converter need… well, a dc-dc converter – no matter how it’s designed. If unit sales are high enough (which is true in certain applications), declining prices can be absorbed. Similarly, medical equipment (which is cited as a source of new demand) has low unit sales but can sustain somewhat higher price points. The features that go into military/aerospace power supplies are way beyond what most non-military power supplies require, and they command a hefty price to go with them. Applications drive design, not the other way around.
One of the odd points of logic in the report was the statement, “The industry as a whole struggles to keep pace with design developments, and this leads to faster technology obsolescence…” This is followed by, “Replacement rates are gradually reducing due to extended life cycles as a result of manufacturers applying various new topologies and architectures.” So… obsolescent technology means replacement rates are going down due to the demand for new topologies and architectures. So demand is actually going down due to the new designs? But “new and improved designs are boosting demand for dc-dc converters.” Go figure.
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We would like to hear your comments on the topics discussed in this column. We welcome the opportunity to publish opposing opinions. Please email Jeff Shepard at jshepard@darnell.com.
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