Consolidation in the Power Management IC Marketplace

According to recent analysis by Venture Development Corporation (VDC), this trend towards consolidation is also exhibited in changing market shares among the top players. In 1998, the top 5 power supply and power management suppliers accounted for 35% of the marketplace. After the flurry of acquisitions/mergers in 1999-2000, this figure rose to over 40%, demonstrating industry consolidation. However, this figure contracted to 37% in 2001 as many of the larger players struggled in a down economy. There is a definitive industry trend towards consolidation, yet 2001 represented a minor setback to the trend.

Natick, Massachusetts - February 6, 2003 - The power supply and power management integrated circuit market has experienced a lot of change over the last 3 years with regards to the supplier landscape. In 1999 and 2000 there were a total of 15 spin-offs, acquisitions, or mergers specifically relating to power supply and power management ICs. In 2001 there were only four: Maxim & Dallas, Vishay & General Semi, Fairchild & Impala Linear, and Microchip & TelCom Semi. 2002 has already seen the acquisition of Elantec by Intersil. This leaves a total of only 90 power supply and power management IC suppliers worldwide.

According to recent analysis by Venture Development Corporation (VDC), this trend towards consolidation is also exhibited in changing market shares among the top players. In 1998, the top 5 power supply and power management suppliers accounted for 35% of the marketplace. After the flurry of acquisitions/mergers in 1999-2000, this figure rose to over 40%, demonstrating industry consolidation. However, this figure contracted to 37% in 2001 as many of the larger players struggled in a down economy. There is a definitive industry trend towards consolidation, yet 2001 represented a minor setback to the trend. The following firms are ranked by global revenues for power supply and power management ICs:

Top Ranked Power Management IC Vendors

1. Texas Instruments
2. Linear Technology
3. National Semiconductor
4. ON Semiconductor
5. Fairchild Semiconductor
6. ST Microelectronics

The presence of Texas Instruments, Linear Technology, National, ON Semi, and Fairchild Semi in the top five is not surprising, as these firms have become well established in this market. Texas Instruments, National, ON Semi, and Fairchild are broad-line semiconductor suppliers, and power supply and power management ICs are a natural subset of their product lines, and these benefit greatly from their firms' vast resources in this industry. Power supply and power management ICs represent no more than 25% of their corporate revenues. Linear Technology, while not as large, possesses strong commitments to these products as an important part of their business (over 50% of corporate revenues). All five of these firms offer a full complement of products, in most or all of the power supply and power management IC product categories.

In 1998 the top five vendors were National, Motorola (now ON Semi), Linear, Sanken, and Maxim. Acquisitions and mergers have played a major role in the shift in vendor shares, specifically the TI/Unitrode and the Fairchild/Samsung acquisitions.

In addition to those listed, there are over 60 vendors with less than 1% market share. Despite the fact that there are approximately 90 participants in this market, the top 8 vendors account for over 50% of the global merchant shipments of these ICs. In fact, the 80/20 rule very accurately applies to this market, with 79.6% of 2001 revenues attributed to the top 20% (18 suppliers) of the IC manufacturers.

About the Study

This report, "The Global Market for Power Supply and Power Management Integrated Circuits", is a multiclient study designed to provide subscribers with relevant and up-to-date market intelligence to support strategic marketing and product planning decisions. This report includes:

- Forecasts by product categories, major applications, geographic regions, channels of distribution, power ratings, and standard versus custom designed ICs;
- Major issues, technology trends, and OEM needs that affect the future of this market;
- Discussion of the industry structure and the influences generated by the various types of participants;
- Worldwide vendor shipment levels and market share data, by product categories and geographical distribution;
- Detailed profiles on the leading worldwide suppliers of power supply and power management ICs; and
- Recommendations providing insight into current and future market opportunities in this highly competitive marketplace.

Venture Development Corporation, a technology market research and strategy firm, was founded in 1971 by graduates of Harvard Business School and MIT. Over the years, VDC has developed and fine-tuned a unique and highly successful methodology for forecasting and analyzing dynamic technology markets. VDC has extensive experience in providing analysis in electronic components markets. This includes multiclient and custom consulting engagements in a broad spectrum of related topics including switching power supplies, uninterruptible power supplies, fuel cells, static transfer switches, and others.

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Report Availability
www.vdc-corp.com/power/annual/01/br01-20.html

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For further information about "The Global Market for Power Supply and Power Management Integrated Circuits" or any other VDC report or service, contact:

John Hutchison, Practice Director
jhutch@vdc-corp.com

Marc Regberg, Senior Vice President
msr@vdc-corp.com

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