Power Semiconductors Breakthrough for Chinese Manufacturers in the Global Power Semiconductor Market

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The air is getting thinner for Infineon. In 2024, Chinese manufacturers have started seriously challenging the dominance of the Germans, Japanese, and Americans in the global power semiconductor market.

Four Chinese manufacturers—CRMicro, Silan, BYD, and CRRC—are among the top twenty global companies for power electronics in 2024, according to the latest ranking by the French market research agency Yole. Infineon Technologies remains the undisputed leader in the global power electronics market—in all three categories of power semiconductors, automotive chips, and microcontrollers for cars. Along with the second and third-ranked ON Semiconductor and STMicroelectronics, the German company still holds around 40 percent of the global market.

However, the pace at which the Chinese competition is catching up is rapid. The boom in Chinese electromobility is particularly fueling this rise, as is the rapid expansion of infrastructure in areas such as data centers, telecommunications, and renewable energies in the People's Republic.

"In 2024, four Chinese companies—CRMicro, Silan, BYD, and CRRC—rose into the global top 20, driven by strong domestic demand, state-directed investment programs, and cost-effective local wafer sourcing. Although these providers are still behind the leading manufacturers in terms of size, their growth is rapid—particularly in silicon MOSFETs, IGBTs, and SiC components," writes Yole in a press release.

Vertical Integration as An Advantage

BYD, the largest manufacturer of electric and hybrid cars in China and worldwide, is currently reshaping the global semiconductor market thanks to its corporate strategy of vertical integration. It produces its own power chips and has created a vast market for them by selling 4.27 million self-manufactured electric and hybrid cars last year alone (41.1 percent more than the previous year).

In Yole's ranking for manufacturers of "Power Devices," BYD appears in 19th place out of 20. Even more impressive is a ranking published by Infineon itself this spring, which uses figures from Omdia for global market shares in 2023. Here, BYD ranks 7th among the ten largest manufacturers worldwide of "Power discretes and modules," meaning the market for discrete power semiconductor components and power modules.

The gap between Infineon's global market share in this comparison (17.7 percent), including modules, and BYD with its global market share of 3.1 percent is still significant, but the speed at which BYD has advanced into the top tier is impressive.

Profound Change

It is therefore no exaggeration when Yole writes that the global competition in the power electronics market is currently "undergoing a profound change." "While European and Japanese companies continue to dominate the top 20, Chinese manufacturers are catching up quickly," writes Yole.

The Chinese are so strongly driven by the dynamics of their domestic market that they experienced significant growth last year, while the global market for power electronics as a whole slightly declined from 2023 to 2024. Additionally, almost all other global market leaders reported slight revenue losses compared to the previous year. Put another way: while everyone else is shrinking, the Chinese are growing like bamboo shoots in spring rain.

In the financial report published by Infineon in May for the second quarter of this year, it is noted that the global market for power semiconductors slightly contracted in 2024, to 32.3 billion US dollars. At the same time, according to the Infineon report, the global market share of most of the world's leading manufacturers slightly declined, while it increased for the two Chinese manufacturers BYD and Silan Microelectronics, contrary to the general trend.

The trade magazine Digitimes Asia also attests to a "breakthrough" for Chinese manufacturers. "Chinese integrated device manufacturers (IDMs) such as Silan and BYD have achieved breakthrough growth in the field of power semiconductors and significantly expanded their market shares," comments Digitimes Asia. "This shift disrupts the longstanding dominance of foreign companies and has attracted the attention of international IDMs." (sb)

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