Power management chips are chips in electronic device systems that are responsible for the conversion, distribution, detection, and other power management functions. Power management chips directly affect the performance of electronic devices, and current development trends focus on improving signal fidelity, increasing power density, extending battery life, reducing external noise interference, and enhancing safety under high voltage. Power management chips primarily ensure the stable operation of power systems. Power management is necessary in any power application scenario, including mobile phones, wearable devices such as TWS earphones, communication base stations, automobiles, industrial applications, and the Internet of Things (IoT).
The importance of power management chips is becoming increasingly apparent, with a wide variety of product subcategories. Power management chips are the heart of the power supply for all electronic devices, responsible for the conversion, distribution, detection, and control of the electrical energy required by these devices. They are indispensable to electronic equipment, and their performance and reliability directly impact the overall performance and reliability of the device. Functionally, power management chips can be divided into charging management chips, DC/DC converters, AC/DC converters, charging protection chips, wireless charging chips, and driver chips, enabling functions such as charging, buck-boost conversion, and AC/DC conversion.
Currently, China's power management chip development has gone through three stages. Against the backdrop of ongoing Sino-US trade frictions, the chip industry, as a strategic development industry for the country, has accelerated its development process under the pressure of the external environment and the support of national policies, and is now in a stage of rapid development. With the continuous improvement of industrial policies, the importance and urgency of domestically produced chips are becoming increasingly prominent, and the development speed of China's power management chip will further accelerate in the future.
Integrated circuits are a fundamental, pioneering, and strategic industry that is crucial to the overall development of the national economy and society. The Chinese government has promulgated a series of policies and regulations to strongly support the development and growth of the integrated circuit industry. Power management chips, as an important component of integrated circuits, have also greatly benefited from this.
1. Power management chips are an important branch of analog chips.
As an important branch of analog chips, power management chips have wide applications, and their functions are constantly being innovated due to diversified demands. Power management chips are responsible for the conversion, distribution, detection, and other power management functions in electronic device systems. They identify and control the CPU power supply amplitude to generate corresponding short-wavelength signals and drive subsequent circuits to output power. They are key components in electronic devices and are widely used in various electronic products and equipment. Power management chips can be classified according to their technical structure into AC/DC chips, DC/DC chips, PFC chips, LDO chips, battery charge/discharge control chips, gate driver chips, and interface control chips. In the context of the development of emerging industries such as big data, AI, and the Internet of Things, the demand and variety of electronic devices are growing rapidly. As the heart of the energy supply for electronic devices, the importance of power management chips is becoming increasingly prominent. Currently, with the continuous innovation of downstream applications, the functions of power management chips are becoming increasingly sophisticated and complex, and the demand for efficiency improvement and energy saving is becoming increasingly prominent, indicating a vast future market potential.
2. China's source management chips account for more than one-third of the analog market.
According to Frost & Sullivan, the Chinese analog chip market size was approximately 273.1 billion yuan in 2021. China is the world's largest consumer market, and its growth rate is higher than the overall global analog chip market growth rate. Preliminary statistics indicate that the Chinese analog chip market size will grow to 289.5 billion yuan in 2022. Power management chips account for approximately 36% of the Chinese analog chip market.
3. Power management chips have wide downstream applications.
The performance of power management chips directly impacts the overall performance of a system. Based on function, they can be categorized into linear regulators (LDOs), charge pump chips, DC-DC converters, and AC-DC converters. Key performance indicators for power management chips include efficiency, power consumption, voltage withstand capability, startup time, and integration density.
All electronic devices require power, and power management chips have a wide range of applications. However, different systems have different power requirements. Depending on the application area, downstream applications of power management chips include mobile and consumer electronics, industrial control, automotive, telecommunications, and infrastructure. Currently, downstream applications in consumer electronics, communication equipment, and automotive account for a relatively high proportion.
4. The development of China's power management chip products towards high efficiency, low power consumption, integration, digitalization, and intelligence.
Driven by downstream application demands, the demand for power management chips is shifting across different sectors. In the power supply field, power conversion efficiency and standby power consumption remain core indicators. This is achieved through more advanced circuit topology technologies, lower on-resistance power devices, higher switching frequencies, and more sophisticated high-voltage startup technologies to meet the high efficiency and low power consumption requirements of power management chips and their power systems. In the consumer electronics field, the slimness and compactness of power supplies have always been key requirements for optimizing user experience. Power management chips with smaller size, higher integration, and fewer peripheral components are the primary demand. Since the inputs and outputs of power management chips are analog signals, the introduction of a digital controller core enables core digital functions that are difficult to achieve in conventional power chips. Furthermore, the intelligentization of power management chips is an inevitable trend.
5. The market size of China's power management chip industry will maintain steady growth.
Power management IC R&D relies heavily on the experience of senior engineers, presenting high barriers to entry. Product iteration is slow, and product lifecycles are long, resulting in generally higher profitability stability compared to logic chip companies. An industry trend is emerging where companies are expanding their product categories horizontally through mergers and acquisitions, and some products are migrating from 8-inch to 12-inch wafers. Against the backdrop of strengthening supply chain control and enhancing the competitiveness of Chinese chips, domestic power management IC manufacturers are gaining more prototyping opportunities, which is expected to accelerate domestic substitution. The growth rate of the domestic power management chip market is expected to significantly exceed that of the global market, with a future compound annual growth rate of 15%, reaching a market size of approximately US$34 billion by 2028.
According to Frost & Sullivan, the global power management chip market was worth approximately $36.8 billion in 2021, with China's market exceeding $13.2 billion, accounting for about 36% of the global market share. Preliminary estimates suggest the global power management chip market size exceeded $40 billion in 2022, and based on China's 36% market share, the preliminary estimate for China's market size is around $15 billion.
Based on revenue calculations for power management chips from various companies, among domestic brands, those with the highest market share include SG Micro and Chipown. However, overall, the competitive advantages of these leading domestic power management chip companies are not prominent, with market share less than 10%.
Note: Market share is calculated by dividing the sales revenue of each company in the Chinese power management chip market by the size of the Chinese power management chip market.
—High Investment Enthusiasm in the Power Management Chip Industry
Judging from the changes in the number of investment events, the investment and financing activity in the power management chip industry has been continuously increasing over the past few years. According to data provided by Enniu Data, the number of investment and financing events in China's power management chip industry showed a fluctuating upward trend from 2013 to 2022. In 2022, the number of related investment and financing events reached 22, while as of April 2023, there was only 1 investment and financing event in the industry.
Note: Data for 2023 is current as of April 21.
The power management chip industry is in its growth stage.
In recent years, the financing rounds in the power management chip industry have generally favored earlier stages, with investment institutions mainly being third-party investment institutions such as private equity firms. Based on the industry's growth rate, the industry is currently in its growth phase. In terms of the number of financing rounds, as of April 21, 2023, Series A rounds were the most numerous, reaching 14.
Note: The data retrieval date is April 21, 2023.
Analysis of the Prospects of China's Power Management Chip Industry
The power management chip industry market size will maintain steady growth.
Power management IC R&D relies heavily on the experience of senior engineers, presenting high barriers to entry. Product iteration is slow, and product lifecycles are long, resulting in generally higher profitability stability compared to logic chip companies. An industry trend is emerging where companies are expanding their product categories horizontally through mergers and acquisitions, and some products are migrating from 8-inch to 12-inch wafers. Against the backdrop of strengthening supply chain control and enhancing the competitiveness of Chinese chips, domestic power management IC manufacturers are gaining more prototyping opportunities, which is expected to accelerate domestic substitution. The growth rate of the domestic power management chip market is expected to significantly exceed that of the global market, with a future compound annual growth rate of 15%, reaching a market size of approximately US$34 billion by 2028.
— Market size of power management chip industry in China and globally: vast market potential
The power management chip industry has a wide range of downstream applications, covering various electronics-related fields such as communications, consumer electronics, automotive, and the Internet of Things (IoT). With the development of downstream markets such as new energy vehicles, 5G communications, and IoT, the number and types of electronic devices continue to grow, making power efficiency management increasingly important and driving demand for power management chips. According to Frost & Sullivan, the global power management chip market size was approximately US$36.8 billion in 2021, with the Chinese market exceeding US$13.2 billion, accounting for about 36% of the global market share. Preliminary estimates for the global power management chip market size in 2022 indicate it exceeded US$40 billion, and based on the 36% market share, the preliminary estimate for the Chinese market size is approximately US$15 billion.
For more detailed industry research and analysis, please refer to the "China Power Management Unit (PMU) Industry Market Outlook and Investment Strategy Planning Analysis Report" by Qianzhan Industry Research Institute.
Meanwhile, the Foresight Industry Research Institute also provides solutions such as industry big data, industry research reports, industry planning, park planning, industry investment promotion, industry mapping, smart investment promotion system, IPO fundraising feasibility study, IPO business and technology writing, and IPO working paper consulting.
