News Article

Power Supply Market To Grow By 2.4 Percent In 2013

After declining in 2012, the global market for merchant power supplies is forecast to grow by 2.4 percent in 2013.

This rebound is being driven by rising demand in the tablet PC, smartphone, LED lighting and server markets according to the report entitled “The World Market for AC-DC & DC-DC Merchant Power Supplies" from IMS Research.

“The proliferation of consumer devices such as tablet PCs and smart phones has helped drive demand for bundled power adapters, helping to maintain growth in the overall power supply market," said Jonathon Eykyn, power supply and storage component analyst for IHS. “The adoption of LED lighting and the continuing growth of datacenters are also projected to help the market to rebound in 2013."

Tablet PCs and smartphones both use external power adapters, which represent the fastest growing segment of the merchant power supply market.

The tablet PC market is still dominated by Apple Inc., although its market share has eroded as competing manufacturers have released more products. The market for power supplies for tablet PCs is calculated to grow by $250 million from 2012 to 2014, with no signs of demand slowing.

The smartphone market continues to expand strongly as consumers purchase the latest models from manufacturers such as Apple and Samsung. Further demand is coming from the developing markets where 3G—and in some cases, 4G networks—are being rolled out. Such developments will spur the market for power supplies for smartphones to expand by 40 percent from 2012 to 2014, although growth projections for the longer term are much lower.

The markets for power supplies used in LED Lighting and server and storage applications also are projected to be key growth drivers in the coming years. The adoption of LED lighting is forecast to drive the market for power supplies used in lighting applications to almost triple in five years.

The rise of cloud computing is forcing companies to invest heavily in information technology (IT) equipment, specifically increased server and storage capabilities in datacenters. This equipment has complex and demanding power requirements, creating a valuable opportunity for power supply manufacturers. This will help grow the market for power supplies in server and storage applications by $500 million in five years.

However, these four applications account for only about 25 percent of the total power supply market. Large, traditional markets such as industrial and telecommunications continue to suffer from a lack of investment and low business confidence which reduces demand for power supplies needed for new equipment and machinery. It is forecast that these two markets in particular will suffer from weak end-equipment demand for the foreseeable future with revenue not returning to the 2011 estimated value for a projected four years.

To ensure growth and recovery in the coming years, suppliers must identify and target lucrative markets that will provide them with future opportunities as demand remains low in many of the traditional areas upon which suppliers have depended.

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