At the moment, Power Module (Which does not have its own Semiconductor ) companies acquire SiC Semiconductor chips from semiconductor manufacturers like Wolfspeed, Renesas, and others. They then use these chips as the heart of their Power Modules in terms of technology, and these chips also account for a substantial part of the module’s production cost.

1. Direct Deal with Semiconductor Suppliers:

In this straightforward process, a pricing competition is at play. Power Module companies purchase chips and then resell them to OEMs or Tier 1 Suppliers through Power Module Packaging, making substantial profits solely through semiconductor trading. Consider this: there is a possibility for OEMs or Tier 1 Suppliers could save up to remarkable 500 million Euros depend on 2 Wheel Drive or 4 Wheel Drive/High performance Electric Vehicle. Exceptionally, The number of power modules used in a 2-wheel drive (2WD) or 4-wheel drive (4WD) vehicle can vary depending on the specific design of the electric powertrain and the vehicle’s power requirements

Consequently, Electric Vehicle startups, often find themselves negotiating terms set by these Power Module companies.

There are additional advantages to this approach. Payment terms can be more easily negotiated with direct chip suppliers. Moreover, OEMs and Tier 1 Suppliers gain direct control over chip quality, stay informed about new developments, and can discuss changes in technical requirements, such as chip size or power density.

Benefits of Direct Deal with Semiconductor Suppliers:

Another avenue to save an extra million Euros in the realm of Power Modules is by abstaining from investing in Power Module production lines. Some Power Module manufacturers might face financial limitations, prompting them to seek investments from Tier 1 or OEMs, which typically involve a substantial sum, around 7 to 10 million Euros. However, it’s crucial for any business to avoid venturing into a risk-sharing business model, as customers should not be exposed to such risks. The decision about how much risk to undertake should rest with the Power Module companies.

2. Do not invest in Power Module Production line on the basis of risk sharing Business Model:

However, OEMs and Tier 1 companies can extend their support to Tier II Power Module companies seeking investment for establishing production lines or preferring to buy semiconductors directly from Power Module companies. OEMs and Tier 1 companies can facilitate the direct procurement of semiconductors from semiconductor manufacturers by Power Module companies, thus easing their financial burdens.

A considerable number of semiconductor suppliers have already ventured into the power module sector, while others are actively exploring opportunities to enter this industry. This has led to competition between semiconductor suppliers and power module manufacturers. Consequently, there’s a possibility that power module companies may not receive the most advantageous price offers from semiconductor suppliers. Although some power module companies claim to get the best semiconductor prices, it may not always be accurate. Therefore, it’s a better idea for OEMs and Tier 1 suppliers to directly negotiate with semiconductor suppliers to ensure they obtain the most favorable pricing.

Another crucial factor that companies should give serious thought to before engaging with Power Module manufacturers is the necessity of signing a Non-Disclosure Agreement (NDA) with a stringent and robust clause. An illustrative case is One of the leading OEM interaction with a Power Module manufacturer in Europe. This leading OEM shared its distinct design and advantages with the Power Module manufacturer, but ultimately, no agreement was reached on closing the deal. Subsequently, the Power Module manufacturer made some minor alterations to OEM’s design and began selling it to other OEMs and Tier 1 suppliers. This situation resulted in significant losses this OEM.

3. Use Si Semiconductor:

The third cost-saving method involves not using Silicon Carbide (SiC) in the power module device and opting for Silicon (Si) IGBT semiconductor technology instead. While SiC is an excellent semiconductor with unique benefits, it tends to be more expensive.

The choice between SiC and Si can be determined by OEMs based on factors like the vehicle’s driving patterns or powertrain needs. There are ten critical areas where efficiency improvements are possible with Si semiconductors. By utilizing SiC, overall vehicle efficiency can be boosted by 5 to 10%, resulting in cost savings across fifteen vehicle components, as outlined below:

Even a modest 1% improvement in energy conservation across the listed factors could lead to significant energy savings for electric vehicle (EV) manufacturers, equivalent to SiC Semiconductors’ consumption in EVs. The factors affecting EV efficiency encompass a broad research domain, considering the numerous variables that influence energy usage. Weather conditions, for instance, play a substantial role in energy consumption. Extremely cold temperatures can reduce energy usage by up to 37%, while a temperature of 40°C can extend the vehicle’s range by approximately 2%. Similarly, the presence of headwinds significantly impacts energy consumption, requiring more energy to overcome resistance during motion. Weather conditions also interact with auxiliary systems, with research indicating that heating a vehicle consumes more energy than cooling its interior.

Additionally, factors like vehicle load, battery weight, and driving style all exert an influence on energy consumption. Heavier loads and increased battery weight contribute to higher energy consumption, while aggressive driving, including sudden and frequent acceleration, can lead to faster battery depletion. It’s vital to recognize that optimizing energy efficiency necessitates considering a multitude of variables, as electric vehicles often operate under less-than-ideal conditions, such as varying temperatures, wind, passenger loads, and traffic conditions.

Key Highlights of the Full Report:

• Procurement Strategy Analysis with use case of SiC and Si
• How OEMs and Tier 1 can save millions of Euro by adopting right strategy
• Power Module Manufacturing Strategy and making profit by just trading semiconductor chips
• How make the vehicle equivalent energy efficient without using SiC chip
• Power Module Cost Structure
• Long term benefits Analysis with Power Module buying Strategy
• Power Module Business Model
• Benefits Analysis of Direct dealing with Semiconductor Suppliers

The post How Semiconductor Procurement Strategies Save Millions for the EV Industry appeared first on Autobei Consulting Group.

The Power Module market is defined into 3 major categories – Moulded Halfbridge Power Module, 6P, and Discrete Power Module. 6P architecture is in demand due to its benefits. Nowadays a customers are(OEMs, Tier I) expecting One Power Module device which suits their 400V and 800V vehicle architecture with the same size and dimensions.

Currently, 3 major key markets are looking fit for Power Module China, Europe, and the USA. The market size of Power Module will touch $16.2B by 2030 with a CAGR of between 14 to 16% from 2023 to 2030. The growth of the Power Module Business depends on several market Dynamic factors like the Type of Power Module, and the Electric Vehicle Market growth. The availability of semiconductors is also going to play a role. Other factors which affect the market’s size and growth are the semiconductor’s price trend, Yield loss, Electric Vehicle Type, New Technology development, and Acceptance of discrete devices. In our report, we have examined each point in detail and its impact.

We Analysed the Power Module packaging material Technology Trends, Innovation, and Price fluctuation like Baseplate, Semiconductor chip, Copper, Silver, Substrate, Mould Material, Wire Bonding machine, Test machine, and Logistic cost.

Tier 1 Suppliers, OEMs, and Power Module are looking to control the manufacturing cost. Another key challenge is the forecast methodology of the Power Module included every cost component for the next 10 years.

The key selling factors of the Power Module are High Energy Density, Size, Weight, Ease of installation, Thermal loss, peak temperature performance, Cost Vs Benefits, and maturity of the Technology for Silicon carbide. However, there is a high-cost difference noted between Si and SiC technology. Both technology IGBT and MOSFET are suitable for different EV applications. Europe is leading in Si and SiC, the USA is sourcing the Power Module mainly from Tier I, and China is still struggling to source IGBT locally.

The electric vehicle Industry is expecting the top-side contacts to reduce thermal losses. New technology excludes the substrate material, replacing the aluminum lead frame. This change saves power Module costs.

For vehicles like SUVs, Trucks need highly reliable and robust power Modules. Some metals like copper and silver sintering have a heavy cost impact on Power Modules.

Process development is another challenge mainly for Power Module manufacturers, but other stakeholders are suffering due to process development.

Some Power Modules are with minor customization but are expensive. However, most of the Power Modules are following the Infineon Power Module design and pattern.

Key highlights of the report:

• The market size of Power Module in terms of Value and Units – Trend and Forecast
• Market Share Analysis of Power Module
• Region-wise ( USA, China, Europe, and RoW) market size and Potential
• Key Challenges and Key Growth Drivers
• Power Module Competitor Analysis – Infineon, Hitachi, STMicro, Vitesco, ONSemi, Rohm, Bosch, StarPower, Mitsubishi, and others Cooling Technology Comparison
• Number of Semiconductor chips per Module
• Business Model Analysis – Semiconductor Chips, Power Module, or Inverter
• Technology Challenges and Opportunities
• Product – Market Fit Analysis
• Risk Analysis

The post Power Module Product Trend Analysis and Market Assessment appeared first on Autobei Consulting Group.