Power Semiconductors: Explosive Growth in Silence

(This article was authored by Semiconductor Industry Insights and published by TMTPost with authorization)

By Semiconductor Industry Vertical

Power semiconductor manufacturers are at a crossroads.

A recent report from Yole Group provides a clear coordinate system for the power semiconductor industry: the global power electronics market will grow at a compound annual growth rate of 7.1% from 2025 to 2031, reaching $41.3 billion. Infineon leads by a wide margin with its comprehensive portfolio covering silicon, silicon carbide, and gallium nitride, followed by onsemi and STMicroelectronics in second and third places, respectively. Five Japanese companies follow closely behind, while five Chinese manufacturers—China Resources Microelectronics (9th), Silan Microelectronics (10th), Nexperia (owned by Wingtech, 11th), BYD Semiconductor (13th), and CRRC Corporation (20th)—have all entered the top 20.

More important than rankings is a key observation: after years of rapid expansion, the power semiconductor industry is entering a consolidation phase, with competitive focus shifting from technological innovation itself to market-leading products, customer acquisition, and sales capabilities.

Recent product strategies and strategic moves by major players provide timely evidence supporting this view. As the industry transitions from 'everyone is growing' to 'who wins what,' the theme of divergence is coming into sharp focus.

Data center power supplies—including those for AI-related applications—are identified as one of the core growth drivers of a USD 41.3 billion market.

InfineonA quantified roadmap has been laid out: AI rack power is undergoing a three-stage leap over three years—first-generation at 200 kW, second-generation at 500 kW, and third-generation at 1,000 kW arriving within one to two years. Correspondingly, revenue from AI data center power solutions is projected to grow from approximately EUR 1.5 billion in fiscal year 2026 to EUR 2.5 billion in fiscal year 2027. SG Micro has showcased an AI computing board power solution supporting up to 1,200 A output, while its SGM64040 for AI smartphones must support 20 A steady-state and 30 A transient current—demonstrating that AI devices’ power demands have escalated from ampere-level to kiloampere-level.

TIA complete 800 V power delivery chain has also been demonstrated: covering every stage from grid input through power supply units (PSUs), hot-swap protection, capacitor-based energy storage, high-voltage DC/DC conversion, and finally to GPU core power delivery on the board—each step backed by specific solutions. Notably, the 800 V-to-6 V DC/DC converter achieves a peak efficiency of 97.6% and a power density of 2 kW/in³, while the 30 kW AC/DC PSU reaches a peak efficiency of 98.5%. These hard metrics quantify the efficiency ceiling of AI power delivery and underscore the inevitability of migrating system voltages to 800 V—a trend also observed by Yole, which notes that electric vehicles are moving from 400 V to 800 V, solar systems from 1,000 V to 1,500 V, and AI data centers toward 800 V architectures.

Domestically, SG Micro’s AI computing board power solution supports up to 1,200 A output; Dongwei Semiconductor’s fundraising plan explicitly targets ultra-high-voltage applications such as solid-state transformers with SiC MOSFETs rated between 3,300 V and 10 kV. These three companies, approaching from different angles, jointly confirm that solid-state transformer (SST) technology is transitioning from proof-of-concept to engineering implementation. Global shortages of traditional transformers have persisted for two years, and rising copper prices continue to drive up costs, opening a window for substitution.

AI power delivery is not merely a single-chip issue—it demands a full-chain upgrade encompassing isolation, conversion, real-time control, and power distribution architecture. Whoever can offer a more comprehensive solution across this chain will gain an early advantage in the 'customer acquisition' phase.

Yole forecasts that silicon carbide (SiC) and gallium nitride (GaN) will account for 31% of the total power semiconductor market by 2031. This figure alone confirms the irreversible penetration trend of third-generation semiconductors. However, Yole also notes that slowing battery electric vehicle (BEV) markets have led to SiC oversupply, intensifying price competition across the entire supply chain—and Chinese manufacturers’ price wars are further accelerating the decline in SiC prices.

The dilemma facing silicon carbide (SiC) players is this: technological substitution is accelerating, yet market prices are falling.

Dongwei SemiconductorIts second- and third-generation 650V and 1200V SiC devices are already in stable mass delivery. The 1700V variant has passed customer testing and received orders, while the fourth-generation 650V/750V/1200V devices have been successfully developed and are undergoing validation. Founder Microelectronics offers a full portfolio of SiC MOSFETs and Schottky Barrier Diodes (SBDs) ranging from 650V to 2300V, available in all package types—including through-hole, surface-mount, top-side cooling, and high-power modules. The industry’s transition from 6-inch to 8-inch wafers is rapidly driving down manufacturing costs, making the irreversible replacement of silicon-based IGBTs by SiC devices above 650V a clear trend.

As SiC adoption shifts toward high-value applications—such as data centers, building energy storage systems, large-scale transportation, defense, and ultra-high-voltage systems—the technology will experience a divergence in use cases: intense price competition will dominate mainstream markets like electric vehicle main drives, whereas SiC’s technology premium will remain justified in high-value segments such as data center power supplies and solid-state transformers.

Price wars are a double-edged sword. Companies like China Resources Microelectronics, Silan Microelectronics, and BYD Semiconductor have entered the global top 20, demonstrating that economies of scale have been established. However, the decisive factor for survival during this consolidation phase will be the ability to transition from a component supplier to a full-system solutions provider.

In contrast to the ongoing debate over SiC oversupply, gallium nitride (GaN) is on a clearer upward trajectory. Yole notes that GaN applications are expanding steadily, primarily in consumer electronics power adapters, fast chargers, data center power supplies, and compact high-frequency converters. However, it also cautions that reliability of high-voltage devices, ecosystem maturity, and supply chain readiness remain key hurdles to widespread adoption in automotive and high-power applications.

Recent technological breakthroughs precisely mark a critical step toward overcoming GaN’s bottlenecks.InfineonThe world’s first 300mm GaN power semiconductor wafer technology has been unveiled, with mass production expected by late 2026 to early 2027. The move from 6-inch to 12-inch wafers isn’t merely a matter of size—it represents a qualitative leap in unit cost reduction and production scale, signaling GaN’s transition from 'usable' to 'scalably viable.'Dongwei Semiconductorhas also achieved breakthroughs in low-voltage GaN HEMTs and is advancing toward mass production, working to complete its full portfolio across high-, medium-, and low-voltage segments.TIGallium nitride (GaN) is driving the miniaturization of 800V data center power supplies, and has become the mainstream choice for high-frequency, high-power-density power applications.

Due to ongoing reliability challenges in high-voltage devices, GaN will remain focused on medium- and low-voltage applications in the near term. However, once 12-inch wafer mass production is realized, the consumer power adapter and data center power supply markets alone will be sufficient to support GaN’s scaled growth.

For power semiconductors, future differentiation hinges on a strategic shift in innovation—from the device structure itself toward thermal management and advanced packaging technologies. Key technological trends include top-side cooling, double-sided cooling, copper clip interconnects, silver sintering, low-inductance module layouts, and embedded chip packaging.

Packaging innovations by various manufacturers closely align with this assessment.ToshibaThe industry’s first DSOP dual-side cooling package has already entered high-volume production for steer-by-wire chassis applications; Fangzheng Microelectronics is pursuing a top-side cooling and modular packaging approach;InfineonIts Q-DPAK and EasyPACK packages are both industry-first introductions. There is no one-size-fits-all thermal solution—dual-side and top-side cooling each suit different application scenarios—but the ability to dissipate heat more efficiently directly determines the ceiling for power density.

The deeper implication of this trend is that as performance gaps at the device level narrow—with conduction and switching losses in silicon carbide (SiC) no longer differing by orders of magnitude across vendors—the competitive focus shifts to packaging and thermal management. Whoever can more effectively dissipate heat from a single chip will be able to pack more power into the same volume.

Five Chinese manufacturers have entered the global top 20—a notable structural shift highlighted in Yole’s rankings. Driven by the world’s largest domestic market for power devices, Chinese manufacturers are rapidly expanding their market share in silicon carbide wafers, discrete devices, electric vehicle power electronics, and industrial power modules.

Domestic manufacturers have already demonstrated their capabilities through breakthroughs in niche segments.Jiejie Microelectronics,Automotive-grade BMS insulation monitoring chips withstand temperatures up to 125°C and offer extended lifespans; Yachip’s 12-channel automotive headlamp driver and its 8mΩ low-RDS(on), 4-channel high-side driver fill a gap in the domestic high-end market and are currently in short supply; Chipan Electronics’ magnetic isolation products lead peers by 50% in voltage withstand and electromagnetic interference resistance metrics.

In response to the rapid rise of domestic power semiconductor brands, global giants are leveraging ecosystem advantages to build moats.Infineon"From Grid to Core" end-to-end strategic layout,TIa complete power delivery solution spanning from the grid to GPU cores,Toshibaand system-in-package applications in brake-by-wire chassis—these are no longer competitions over individual components but battles of system-level integration capabilities. Recently, Infineon’s €5 billion Dresden mega-fab came online, and Texas Instruments launched coordinated operations across its virtual integrated fab network, widening the scale gap in manufacturing capacity.

As the power semiconductor industry enters a consolidation phase, the market window is simultaneously narrowing. Domestic players have proven their strength with focused breakthroughs in specialized segments, yet transitioning from discrete devices to full-system solutions—and expanding from single products to full-stack coverage—will still require time.

AI power delivery has created a new growth vector for power semiconductors, with kiloampere-level current management and solid-state transformers (SSTs) representing the next inflection point for industrialization. Silicon carbide (SiC) adoption is irreversible, but oversupply has already emerged, and price competition will accelerate industry consolidation. Gallium nitride (GaN) is poised for takeoff on the cusp of 12-inch wafer mass production. The competitive focus is shifting from device architecture to thermal management and advanced packaging—these diverging trends collectively signal one reality: the power semiconductor industry is moving from 'expanding the pie' to 'dividing the pie.'

The $41.3 billion market is large enough, but growth is no longer universally distributed. The real contest lies on the mass-production lines—those who can convert technical advantages into deep customer lock-in will remain at the table.

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