Jabil's Global Mechanicals Intelligence Archive

Global Mechanicals Intelligence

Q4 2024 | OCTOBER - DECEMBER

MARKET DYNAMICS

• Advanced Energy will close its Zhongshan factory in June 2025. this factory has become underutilized over the past several years due to geopolitical concerns, with many customers looking to diversify China’s manufacturing.  As a result, the Zhongshan production will be transferred to the factories in the Philippines and Malaysia.
• Distribution channels have higher flexibility and better support for standard products, especially for HMLV business.
• Fast charging, universal compatibility, and the ability to charge multiple devices simultaneously are the focus areas for power supplies in the consumer electronics market.

TECHNOLOGY OVERVIEW

WIDE BANDGAP SEMICONDUCTORS (GAN AND SIC)

• The adoption of gallium nitride (GaN) and silicon carbide (SiC) devices makes power supplies smaller, lighter, and more efficient. These materials can handle higher voltages and temperatures, resulting in faster switching speeds, reduced power losses, and increased power density.  

MICROCONTROLLERS AND DIGITAL SIGNAL PROCESSORS (DSPS)

• Digital control is increasingly being integrated into power supplies, allowing for precise monitoring and control of voltage, current, and other critical parameters. This enables greater flexibility, improved performance, and easier customization to meet specific application requirements.  

RESONANT INDUCTIVE COUPLING AND RF ENERGY HARVESTING

• Wireless power transfer technologies are advancing, enabling the charging of devices without physical connectors. While still in its early stages, wireless charging holds immense potential for consumer electronics, medical devices, and even electric vehicles.

HARVESTING ENERGY FROM AMBIENT SOURCES

• Power supplies are being developed to scavenge energy from ambient sources like solar, thermal, and vibration energy. This technology is particularly relevant for IoT devices and remote sensors where traditional power sources are impractical.

RECENT DEVELOPMENTS

Source: Press releases & company websites

DEMAND/SUPPLY OVERVIEW 

DEMAND COMMENTARY

• Customer demand is subdued, particularly in Networking and Storage segments that do not incorporate AI applications.
• There are no significant changes in consumer and industrial applications.  They still show soft demand.
• Growing sales of electric vehicles are another vital driver for the power supply market.  EVs require public charging stations and home charging solutions with dedicated power modules.

SUPPLY ANALYSIS

• The supply base stays stable, with no signs of suppliers exiting the market.
• There are no significant changes in overall lead times.  Keeping flat at 8 to 10 weeks for chargers and adaptors, Power Bricks and modules is 15 to 20 weeks, and 12 to 20 weeks for hot-pluggable (CRPS), except for some uncommon models.
• Tire 1 Power Supply suppliers running with 50% to 70% capacity utilization.  Thailand's primary suppliers' factories have higher capacity utilization (>70%).
• More and more overseas customers are looking for non-China solutions from Power Supply suppliers.  Customers want out-of-China manufacturing & non-China-produced raw components.
• Some Chinese local customers require their suppliers to be ready for complete localization at both the production & component levels.

PRICING SITUATION

• Power Supply prices remain stable and flat as key component prices remain stable.  PSU product cost is highly correlated with critical components such as power management ICs, transformers, PCBs, cables and connectors, and mechanical housings.
• LME (London Metal Exchange) copper prices surged 25% in May 2024, but in August, they reached the lowest level in five months.  The price fluctuations in Q2'24 shall not impact the cost of Power Supply.

KEY TAKEAWAYS

• In general, Supply & Price & Lead Time remain stable.
• Key players focus more on research and developing new power solutions for electrical charging and renewable energy.
• More capacity is moving outside China.  Advanced Energy is moving to the Philippines and Malaysia, Delta is expanding its capacity in Thailand, Chicony Power is constructing a new factory in Thailand, and Liteon is exploring relocating some of its product assembly operations to India.