Power Semiconductor Market Power Chips: AI Boom Drives Up Chip Prices

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The boom in artificial intelligence is driving up prices for power semiconductors. This trend is particularly noticeable in China right now, the world's largest consumer market for chips of all kinds.

The major power semiconductor manufacturer China Resources Microelectronics has announced that it will increase its prices by at least ten percent from this month. Silan Microelectronics has announced similar increases for several chip categories.

According to an unconfirmed report by Trendforce, Infineon also informed its customers earlier this month that prices for power switches, i.e. MOSFETs and IGBTs, will increase from April this year. According to the report, the company cited the tight supply situation for power switches and the associated ICs, as well as increased raw material prices and infrastructure costs as reasons for the price increase.

Automotive Demand

The second industry in which demand for MOSFETs and GaN components is currently rising rapidly is e-mobility. Although sales of e-cars and hybrids in the People's Republic have just cooled down again somewhat after a phase of explosive growth, the demand for power semiconductors continues to rise, say analysts.

The reason: more and more intelligence in cars requires more and more powerful chips, as the specialist portal Bandaoti Chanye Zongheng writes in a recent analysis. At the same time, the value of the chips is increasing due to the need to integrate more and more complicated functions.

Some Chinese suppliers such as JieJie Microelectronics have been able to greatly expand their series production for international customers due to these technological trends. The company with the full name Jiangsu Jiejie Microelectronics Co., Ltd. from Qidong recently recorded annual growth of more than twenty percent for products for the automotive industry, reported Bandaoti Chanye Zongheng.

However, the biggest growth spurt for the power semiconductor category is currently coming from the construction of data centers to satisfy the rapidly growing hunger for AI computing power.

Demand for Robotics Is Also Increasing

Another piece of good news for chip manufacturers is the growing demand for power chips in robotics. Here, too, good margins can be achieved and some manufacturers are gradually shifting their production capacities from the automotive industry to the robotics customer segment, say market observers in Beijing and Shanghai.

The fact that prices for memory chips have been rising for several months and the trend is now spreading to power chips indicates to observers in the semiconductor industry that a cyclical upward trend is beginning. After a long period of time, company revenues are also rising again.

"Price increases along the entire value chain for semiconductors", predicts the Chinese business magazine Diyi Caijing for this year. "After almost two years of a price correction, the market for power components is stabilizing," writes the magazine.

The turnaround is clear. Silan Microelectronics recently announced that it expects a net profit of 330 to 396 million yuan for the full year 2025, the equivalent of around 41 to 49 million euros / USD 48 to 58 million. This would mean that the leading manufacturer of power electronics in the People's Republic would have improved its result by 50 to 80 percent compared to the previous year.

Driven by demand in their home market, several Chinese suppliers have recently been able to expand their global market shares. Silan Microelectronics, for example, saw its market share rise from 2.6 to 3.4 percent in 2024. The company was thus able to move up from tenth to sixth place among the world's largest suppliers. With a global market share of 2.9 percent, BYD Semiconductor made it onto this list of the top 10 for the first time (in seventh place). In the same year, the market shares of Infineon, second-placed Onsemi and STMicroelectronics fell slightly. (sb)

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