Power management ICs in portable devices represent nearly 40% of total analog IC revenues, says Petrov Group

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1 Pwer management ICs in prtable devices represent nearly 40% f ttal analg IC revenues, says Petrv Grup Cntributed by The Petrv Grup -- Tuesday 10 August The annual unit grwth rate fr prtable devices is estimated at mre than 12%, frm abut tw billin in 2008 t ver 3.4 billin devices in These devices have an increasing number f features that drive the diversity and perfrmance requirements f pwer management ICs. The requirement fr mre pwer-efficient and higher perfrmance slutins in battery-pwered prtable devices will cntinue t pen new market pprtunities fr existing IC vendrs as well as new market entrants, accrding t Bris Petrv, managing partner f The Petrv Grup. The rate f this feature increase will cntinue t be much faster than the rate f advances in battery technlgy. This drives the need fr a diverse range f new and higher perfrmance pwer management ICs. Increasing requirements fr battery management IC perfrmance, new features, and pwer-efficiency cntinue t pen up new pprtunities fr IC vendrs and wafer fundries. Lithium-In/Pl batteries, in particular, are changing the cmpetitive landscape and cntinue t increase battery management and safety prtectin requirements. Pwer management ICs represent a grwth market segment that is f significant imprtance t analg IC vendrs, bth IDMs and fabless, as well as t fundry service prviders. Pwer management ICs in prtable devices alne accunted fr mre than US$14 billin in revenues and mre than 26 billin units in This represents nearly 40% f ttal analg IC revenues and ne-third f ttal analg IC units reprted by WSTS. By 2013, the dminance f pwer management ICs in prtable devices alne is expected t further increase t nearly ne-half f ttal analg IC revenues and units (abut US$21 billin and 47 billin units, respectively). The highly fragmented pwer management IC market fr prtable devices is served by a variety f business and prduct strategies. Nt all are sustainable and prfitable; identifying the apprpriate market segments and understanding their market drivers is critical fr develping viable business mdels, says Bris Petrv. There are three distinct categries f prtable devices: (1) PC-based devices characterized by high-current requirements and a relatively large frm factr pwered by a battery pack, (2) handheld devices (excluding cell phnes) characterized by very lw-pwer requirements and a brad range f device types, and (3) cell phnes characterized by very lw pwer requirements, highly integrated prcessr-riented pwer management ICs, and a large unit vlume. The ttal unit number f pwer management ICs in prtable devices and their resulting revenues is significantly underestimated. Mst market analyses fcus n a few large pwer management ICs, typically "cmpanin ICs" t prcessrs. The actual market fr pwer management ICs includes a large number f "uncunted" pwer management ICs; these ICs typically have superir margins due t their high-perfrmance attributes. As an illustratin, in 2009 the typical number f pwer management ICs ranged frm abut 20 in ntebks t abut seven ICs in devices like Bluetth headsets. This large and fragmented market generates revenues fr nearly all analg IC vendrs, including Analg Devices, AnalgicTech (AATI), Dialg Semicnductr, Freescale, Infinen, Intersil, Linear, Maxim, Mnlithic Pwer Systems (MPS), Natinal, Pwer Analg Micrelectrnics (PAM),

2 STMicrelectrnics, Texas Instruments, Rhm Semicnductr, and at least 40 ther firms, said the Petrv Grup. The pwer management ICs market in prtable devices is very fragmented at the prduct level, prviding extensive differentiatin pprtunities t participating vendrs. These pprtunities shuld be targeted at tightly linked applicatin, prduct, and technlgy levels. There are abut eleven distinct pwer applicatins in prtable devices; they include all pwer management ICs (ver 26 billin units in 2008). A large number f specific prduct types are required t supprt the perfrmance requirements f these applicatins in all prtable devices. In ten ut f twelve majr prtable device types, revenues derived frm pwer management ICs exceed thse derived frm system ICs (defined as all prtable device ICs less system prcessrs and memry as well as pwer management ICs). The tw exceptins are ntebks and highend multimedia/smart cell phnes due t their relatively large number f peripherals (cmputing and cmmunicatins, respectively). This insight illustrates the imprtance f pwer management IC market pprtunities utside the ntebk and cell phne dmains, s called "hrizntal" markets which have lwer unit vlumes per device type but typically much higher margins. Amng the eleven prtable device pwer applicatins, system pwer and lighting management applicatins dminate the ttal unit cunt (29% and 17%, respectively), and represent nearly nehalf f ttal pwer management IC revenues. The next significant applicatin is battery charging and management with 9% f ttal units and 13% f ttal revenues (excluding battery management ICs built int battery packs). Mst analg vendrs strngly fcus n the abve three applicatins, accrding t the Petrv Grup. The system pwer applicatin represents the mst significant prtable device applicatin in bth IC units and revenues. Therefre, pwer management IC vendrs fcus n this pwer applicatin area. Sensr pwer and lighting management applicatin units and revenues are derived mstly frm cell phnes. When cell phne devices are excluded, the three dminant applicatins in terms f units and revenues are system pwer, cre and I/O pwer, and battery charging and management. Prtable medical device meters at present have relatively small revenues derived frm pwer management ICs with an verall vlume ASP f US$0.63. ASPs range frm US$0.46 t US$0.98. Battery charging/management and system pwer applicatins dminate revenues and represent abut 42% f ttal revenue each. Pwer management IC units are dminated by the system pwer applicatin, fllwed by battery charging/management (55% and 27% f ttal, respectively). This is an emerging high-grwth applicatin increasingly targeted by nearly all majr analg vendrs (fr example TI and ADI) attempting t benefit frm an early entry int this market segment. The ttal vlume price fr the eleven prtable device applicatins ranges widely frm US$0.16 t US$5.75. The highest value pwer management IC cntent is in the system pwer applicatin, frm US$0.81 t US$5.75 with an average f US$2.3. The battery charging and management applicatin features the secnd largest cntent value, ranging frm US$0.59 t US$5.74 with an average f US$1.85. The third largest cntent value is in the cre and I/O pwer applicatin, frm US$0.43 t US$3.90 with an average f US$1.60. The lighting management applicatin features a cntent value ranging frm US$0.35 t US$1.48 with an average f US$0.82. Fur ut f eleven prtable device pwer applicatins represent the mst significant revenue pprtunities fr pwer management ICs: system pwer, battery charging/management, cre and I/O pwer, and lighting management. There are six pwer management IC integratin dmains; they are all-inclusive, that is, int these "buckets" ne can place each and every pwer management IC in prtable devices. This segmentatin apprach prvides an effective and useful strategic planning tl. Therefre, a seemingly randm and "infinite" number f pwer management IC pprtunities culd be

3 characterized in a systematic manner, prviding invaluable strategic and prduct planning insights. This is critical in the pwer management IC market, which has a multitude f segments. The six integratin dmains prvide a methdlgy fr analg IC vendrs t evaluate trends and integratin pprtunities in prtable devices and enable them t prfitably target select market segments. The market fr pwer ICs will cntinue t be f majr strategic imprtance t mst end-system and IC vendrs. Insights int the integratin dmains f pwer ICs explain, fr example, why a 60-transistr pwer IC ften exceeds the price and prfitability f a PMU with hundreds f thusand transistrs. There is a strng crrelatin between vendr grss margins and the type f pwer management ICs they target, said Petrv. There are tw majr pwer management IC segments in prtable devices frm the prcess technlgy nde perspective: Pwer management ICs that d nt integrate system functins. These represent the vlume IC business in hrizntal and select vertical end-markets such as cell phnes. Ndal migratins are relatively slw but steady-the 250nm level is currently the mst advanced technlgy nde in vlume prductin. This ndal migratin pattern will remain in the freseeable future unless digital design implementatins f pwer management ICs take ff in vlume. Pwer management ICs that integrate system functins. These represent vlume IC business in vertical and select hrizntal end-markets. System functins (such as an audi cdec r prcessr) bring n-chip digital design implementatins; hence, the need fr finer technlgy ndes - 130nm is currently the mst advanced technlgy nde in vlume prductin with 65nm reprtedly planned in 2010/11. Petrv Grup: Number f PWM ICs used and ttal vlume pricing in smartphnes and media phnes (an example f twelve prtable devices analyzed) Categry Number f ICs Ttal High-Vl Price (US$) 1 Battery charging and management Lighting management Cre and I/O pwer RF pwer (supply and cntrl) Sensr pwer Memry-card pwer and interface Mtr cntrl pwer Audi pwer Display pwer System pwer Memry and bus pwer TOTAL Surce: Petrv Grup, cmpiled by Digitimes, August 2010 Prcess technlgies used t implement pwer management ICs withut system functins fcus n analg perfrmance and the high(er) current and vltage requirements f pwer management

4 ICs. These technlgies include BiCMOS (Biplar/CMOS) and BCD (Biplar/CMOS/DMOS). An increasing use f BCD technlgy is driven by the trend t integrate n-chip discrete pwer MOSFET devices. Prcess technlgies used t implement pwer management ICs with system functins (the secnd abve segment) fcus n ultra lw leakage and functinal integratin. These technlgies include CMOS and CDMOS (CMOS/DMOS). In 2010 a majr trend tward implementatins in BCD platfrm technlgy has emerged, a trend that has majr implicatins fr fundries. Fundry service prviders have recgnized the large and grwing market ptential fr pwer management ICs by intrducing state-f-the-art wafer manufacturing/prcessing capabilities bradly meeting the abve technlgy requirements f pwer management ICs. This prvides significant pprtunities t the fabless analg IC vendrs wh can nw successfully cmpete with traditinal analg IC vendrs. This als enables traditinal analg IC vendrs t utsurce their manufacturing (e.g., Intersil, Maxim). Petrv Grup: Typical Number f PWM ICs in key prtable electrnic device types Prtable Electrnic Device Type Typical # f Pwer Management Ics (2008) Ntebk 20 High multimedia / Smartphne 18 MID (Mbile Internet Device) 18 Digital still camera 18 GPS / PND 16 Digital picture frame 15 Prtable ultrasund 15 Entry / regular phne 13 Netbk 13 Prtable medical device (Meters) 11 Digital media player 7 Bluetth headset 7 Surce: Petrv Grup, cmpiled by Digitimes, August 2010 Related stries: STM is the market share leader in ESD and EMI prtectin devices, says Petrv Grup (Aug 2) Linear Technlgy remains the perfrmance gld standard f the IC industry, says Petrv Grup (Jul 23) Natinal Semicnductr culd becme tp perfrming analg IC vendr, says Petrv Grup (Jul 5)

5 Intersil cmmitted t jining the leading-5 analg and pwer IC vendrs, says Petrv Grup (Jun 21) Maxim makes cmplete U-turn tward fundries and 180nm technlgy platfrms, says Petrv Grup (Jun 11) Texas Instruments ushers the IC industry int a new era f BCD technlgy platfrms, says Petrv Grup (May 24) Glbalfundries impact and evlutin culd be significant, says Petrv Grup Part II (May 10) Glbalfundries impact and evlutin culd be significant, says Petrv Grup Part I (May 3) BCD platfrm technlgies are rapidly changing the pwer IC landscape, says Petrv Grup (Mar 3) Digital pwer ICs represent high grwth pprtunities fr IC vendrs and wafer fundries, says Petrv Grup (Feb 22)