POWER ELECTRONICS The global hotspots of power electronics: Where innovations are emerging

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Held annually in Nuremberg, Germany, PCIM Europe acts as a meeting place for power electronics specialists from across the globe. As the industry continues to struggle with skills shortages and learns how to harness new technologies, we examine where the latest developments and innovations are taking place.

Industry conferences and exhibitions act as important meeting places where experts can share ideas, discover new developments, and broaden their networks. Since its inception in 1979, the PCIM (Power Conversion, Intelligent Motion) Expo has been one of the major events of the year for power electronics professionals.

The European PCIM Expo is held annually in Nuremberg, Germany. PCIM Europe 2024 ran from the 11th to the 13th of June and was one of the biggest ever in the event's long history. The exhibition featured more than 600 companies from 33 countries showcasing the latest developments and innovations from the cutting edge of the power electronics industry. At the conference, 952 participants shared their expertise during 472 presentations. All told, 18,000 visitors attended PCIM Europe 2024.

We’ve taken key insights from PCIM Europe 2024 to highlight the global hotspots that will shape the future of the power electronics industry.

Europe

Europe is working hard to establish itself as a hub for power electronics innovation. The European Union has already pledged €216 million to research and innovation projects with the Semiconductor Joint Undertaking (Chips JU). The revised EU Renewable Energy Directive is driving the development of solar and wind power throughout the continent. Three countries stand at the forefront of power electronics in Europe: Germany, France, and the Netherlands.

Germany has long been a major player in Europe’s power electronics industry. In 2024, Germany is positioning itself as a leading European location for semiconductor manufacturers and PCB producers. Germany’s dedicated efforts are starting to pay off with the city of Dresden being one of the major beneficiaries.

Bosch has invested €1 billion in developing a semiconductor fabrication facility in Dresden, the biggest investment in the firm’s long history. Bosch has also recently said it will boost its investment in the German semiconductor industry to €3 billion by 2026. Other semicon titans such as Taiwan Semiconductor Manufacturing Company (TSMC) and Infineon Technologies AG are heavily invested in the project, respectively investing €10 billion and €2.4 billion into the Dresden fab.

The Bavarian capital Munich is also becoming a tech centre. Infineon is also expanding its power electronics operations at its headquarters in Munich. The multinational technology conglomerate Siemens is also based in Munich and has pledged to invest €1 billion to drive development in the German power electronics industry.

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Germany is not alone in its quest to dominate the European semicon industry. The city of Grenoble in France is making a name for itself as the Silicon Valley of Europe. Grenoble is home to CEA-Leti, a nonprofit semiconductor research organization. Grenoble is France’s leading centre of innovation and home base to companies such as STMicroelectronics and Schneider Electric. Recently, CEA-Leti launched FAMES, a fully depleted silicon-on-insulator (FD-SOI) pilot line with a budget of €830 million.

The home of Phillips, Eindhoven in the Netherlands has historically been a focus point for the power electronics industry. This tradition continues with semicon powerhouses such as ASML, NXP Semiconductors, and Siemens establishing themselves in the city. Recently, ASML and the Eindhoven University of Technology pledged to invest US$ 195 Million to fund semiconductor research and development. The Project Beethoven initiative has allocated €2.51 billion to support the Dutch semiconductor industry and fuel growth in the Brainport Eindhoven hub.

North America

Silicon Valley in San Francisco has been a hub for the global power electronics industry since the 1950s. (You can read about the history of Silicon Valley and its importance to the semiconductor industry in our article here.) Although the words Silicon Valley are still very much synonymous with IT and power electronics, there has been a recent glut of companies moving away from Northern California and toward what at first seems to be an unlikely spot: Texas.

Known as Silicon Hills, Austin, Texas has been a tech hotspot since the 1980s. But the area is now rapidly attracting giants like Intel, AMD, and Texas Instruments. Why? There are two primary drivers behind the move westwards: money and talent.

Northern California has incredibly high state taxes. Texas doesn’t have any at all. Austin is experiencing major investments in startups. SigmaSense Semiconductors, for example, recently accrued US $9,300,000 in startup funds. While finding skilled employees can be difficult in Silicon Valley, companies in Austin can draw from a wide talent pool derived from 13 of the best colleges in the country. Tech innovation in the US really does seem to be heading from the valley to the hills.

Canada is aiming to follow the lead of the United States and develop its semiconductor industry. Canadian authorities are tired of the brain drain of talent to the USA and are investing heavily in the semicon and power electronics sectors. The Trudeau government has recently pledged to invest a total of CA $226.5 million in Canada’s burgeoning tech industry. Toronto and Ottawa are two cities where the power electronics sector is booming.

Major power electronics companies like TSMC, Celestica, and AMD have opened research facilities in Toronto and Ottawa. Canada's Semiconductor Council (CSC) hosted the Semiconductor Summit in Ottawa on February 6, 2024. With the Canadian government providing preferential market access and a tariff-free zone, it’s clear that Canada is doing whatever it can to attract semicon chip manufacturers.

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Asia

As the world’s main semiconductor manufacturing hub, Asia dominates the power electronics market. Despite concerted efforts by Western governments to counter the supremacy of Asia, it seems likely that Taiwan, South Korea, and China will remain market leaders for the foreseeable future.

At the time of writing, these three countries comprise 90 per cent of the global semiconductor foundry revenue.

Taiwan alone accounts for 60 per cent of this revenue and is expected to reach 70 per cent by the end of 2024. The home manufacturing behemoth TSMC and the Hsinchu Science Park, the city of Hsinchu is the focal point of Taiwanese semicon manufacturing. Currently, TSMC is planning to open two packaging factories and three wafer plants in 2024 in Taiwan. With a current market value of US $845 billion, some analysts estimate that TSMC could be worth US $1 trillion by 2025.

In the aftermath of the US-China trade war, China is pushing hard to become the global centre for electronics manufacturing. China is the largest global consumer of semiconductors and wants to topple Taiwan as the biggest producer. Companies like Huawei and Semiconductor Manufacturing International Corporation (SMIC) are expanding their operations in megacities like Shanghai and Shenzhen respectively. Huawei in particular is diligently working towards becoming a leader in semicon chip manufacturing, securing US $30 billion in funding from the Chinese government for its operations in Shenzhen. SMIC, meanwhile, is focusing on establishing Shanghai as China’s premier manufacturing and equipment hub.

South Korea is also making a big play to wrest a larger share of the semiconductor market away from its rivals. The country has ambitious long-range plans centred on developing on the outskirts of Seoul. Together with Samsung and SK Hynix, the South Korean government is investing US $470 billion into creating a semiconductor "mega cluster" of production facilities just outside of Seoul. The site will cover more than 21,000 hectares and be home to 35 facilities. Samsung is fronting up US $375 billion for the project. The company’s goal is to eventually topple TSMC as the world leader in wafer production.

Emerging markets

As well as the usual cast of characters from the US, Europe, and Asia, two other countries are emerging as potential hotspots of power electronics: India and Israel.

In India, the cities of Bengaluru (formerly Bangalore) and Hyderabad are leading the expansion of the country’s tech industry. Bengaluru has had US 48.2 billion in investment from major IT firms such as IBM and SP Labs. The city has two IT hubs Whitefield and Electronics City. Approximately 80 per cent of the world's leading IT companies have offices in Bengaluru. It’s expected that, eventually, Bengaluru will become one of the world’s top tech clusters, overtaking Silicon Valley and Shenzhen.

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Hyderabad is hot on its heels, however. The Hyderabad Information Technology and Engineering Consultancy City (HITEC) is being pushed as a major IT centre and the Karnataka government is revising its IT policy to attract foreign investment. These two tech cities combined with the ongoing Make in India funding initiative will ensure India remains a country to keep a close eye on in the coming years.

You’ve surely heard of Silicon Valley, and you might even know of Silicon Hills. But what about Israel’s Silicon Wadi? Because of the country’s strong investments in innovation and research, some of the world’s biggest semicon manufacturers have opened fabs and offices in Israel, most notably in the capital Tel Aviv. Tel Aviv recently ranked fifth in a survey of the world’s most attractive cities for startups. And it’s not just the IT entrepreneurs that are flocking to Tel Aviv.

As with Texas, Israel’s massive talent pool of highly educated and skilled workers is catching the attention of tech titans. The Israeli government’s decision to slash corporate tax rates for tech companies and its lavish research and development grants are also major drawcards. Over 350 of the world’s biggest tech companies are heavily recruiting talent in Tel Aviv. Intel has opened a swathe of advanced manufacturing facilities across Israel. The recent growth figures of Israeli chip manufacturer Tower Semiconductor were significantly higher than estimated. Although the ongoing Palestinian conflict is causing concerns, the Israeli power electronics industry looks set to become a major part of the global semicon supply chain.

Interesting times ahead for the power electronics industry

“May you live in interesting times” is an old Confucian saying referring to the difficulties of coping with turbulent events. The power electronics industry is certainly no stranger to interesting times and will undoubtedly face upheavals and challenges in the near future.

As established semiconductor giants vie for control of the global chip supply, brash new upstarts are scrambling to secure their share of the market. After the shock of the pandemic and the seesawing of the supply chain, countries are racing to secure reliable chip sources. The rise of machine learning and artificial intelligence is only going to spur innovation and cause the global power electronic hotspots to become positively molten.

PCIM Europe 2024 is one of the most important platforms for industry leaders to showcase innovations and forge new partnerships. Anyone with even a passing interest in the power electronics industry should make sure to stay up to date with past and upcoming PCIM expos.

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