GaN & SiC power devices viable with targeted strategy, says report

Carmakers would succeed by playing the role of an “integrator,” by vertically integrating upstream in the value chain to power modules, while a GaN or SiC developer would do well to pursue a “technology disruptor” strategy, offering core technology expertise to solar inverter makers and incumbent system integrators like ABB.

Lux Research analysts evaluated the value chain in GaN and SiC power electronics to identify strategies for the automotive and solar inverter market. 

According to Lux, Carmakers could integrate upstream through acquisition to include power modules and inverter/converter manufacturing. Such acquisitions will allow carmakers to own drivetrain design and lower overall costs.

Lux also expects vertically integrated GaN/SiC devices or module players to be well-positioned in the solar value chain. The core technology differentiation that such a company offers will be critical for incumbent solar inverter makers like SMA and Fronius, and something system integrators like ABB do not have the competencies for.

Lux concluded that suppliers of substrates, packaging materials and thermal materials will need to customise. Staying nimble and planning for an increased number of specialised device makers in the power electronics value chain will be critical to overall success.

“Fast-growing markets like automotive and solar inverters are unforgiving when it comes to players without strong business and strategy,” said Pallavi Madakasira, Analyst, Lux Research, and the lead author of the report titled, ‘Strategic Playbook for Power Electronics: Lessons from the IC Sector Evolution’. Madakasira continued: “Start-ups trying to address these opportunities need to forge partnerships and collaborations - companies like Transphorm and GaN Systems that have done so are best-positioned for success.”