Industrial Power Control Investor and Analyst Call 24 March 2014
Dr. Helmut Gassel Division President Industrial Power Control (IPC)
IPC Segment Overview
Growth Drivers and Market Opportunities
Product to System Approach Improves Customers' Systems
Summary
Disclaimer:
This presentation contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group.
These statements are based on assumptions and projections resting upon currently available information and present estimates. They are subject to a multitude of uncertainties and risks. Actual business development may therefore differ materially from what has been expected.
Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forward-looking statements.
IPC Segment Overview
Growth Drivers and Market Opportunities
Product to System Approach Improves Customers' Systems
Robust Business Modell; Margin Back to High-Teens Level
From Q4 FY11 to Q1 FY13 longest downturn for IGBT business ever; driven by overstocking of European customers and Chinese market cool-down.
Diverse Customer Base Across All Regions and Applications
2) 34% of FY13 revenue was attributable to distributors.
IPC Portfolio Addresses Applications Across a Broad Spectrum of Power Levels
~0.1 kW – ~10 kW ~1 kW – ~1.6 MW ~100 kW – ~10 MW Driver ICs + Discretes Driver boards + IGBT modules Stacks
Power level of applications and products are approximate.
Source: IHS, "Power Semiconductor Discretes and Modules – World – 2013", December 2013.
Drives (incl. Pumps, Fans, Compressors) by Far Biggest Application Segment
2012 IGBT market by application (\$4.06bn)
Source: IHS, "Power Semiconductor Discretes and Modules – World – 2013", December 2013.
Infineon Holds Dominant Position in Most Dynamic Markets EMEA and China
Source: IHS, "Power Semiconductor Discretes and Modules – World – 2013", December 2013. All figures refer to calendar year 2012.
IPC Segment Overview
Growth Drivers and Market Opportunities
Product to System Approach Improves Customers' Systems
Factory Automation: Huge Savings Possible with Variable Speed Drives (VSD)
- About 300 million electric motors are in use worldwide.
- Rising electric energy cost and ErP (Energy-related Products) directive force energy efficiency.
- Rising labor cost in low labor cost countries drives automation level.
- "Mechanic goes electric"; e.g. hydraulic is replaced by electric motors.
Savings potential of VSD
Source: ABB, 2013.
Power Semiconductor Market for Renewables Should Grow Mid-single Digits
- Wind: Increase in 2014 and 2015; Production tax credits (PTC) in the US will come to an end.
- Wind: China fastest growing region with CAGR of 3.9%. Infineon participates via Goldwind.
- PV: In 2013, China became the world's biggest PV market. Infineon has several local partners, e.g. Sungrow.
* Source: IHS, "PV Inverter Market Tracker", December 2013.
** Source: IHS, "The World Market for Wind Converters – World - 2013", January 2014.
New installations of PV and wind
Intercity and Metro Remain Biggest Markets with Highest Growth Rates
- Urbanization ongoing; many regions still lack sufficient urban passenger transport. Intercity, Light Rail Vehicles and Metro will grow most.
- Global trade (freight transport) drives the use of electric locomotives.
- Infineon has biggest and fastest growing players as customers, e.g. Alstom, Bombardier, CNR, CSR and Siemens.
Development of traction market
Source: SCI Verkehr GmbH, "The Worldwide Market for Railway Technology 2012", September 2012.
Increasing Inverterization Drives Power Semiconductors in Home Appliances
- Biggest home appliances market for IGBT modules is room air conditioning.
- Efficiency programs led and still lead to higher variable speed drive (VSD) penetration rate.
- "Energy efficiency" labeling key differentiator vs competition.
Source: IHS, "Major Home Appliances – World 2013", October 2013.
Penetration of VSD
[units
m] |
2011 |
2016 |
CAGR |
electric
motor-based
home
appliances |
420 |
514 |
4% |
| VSD penetration |
~20% |
~40% |
|
| total VSD appliances |
86 |
205 |
19% |
New Applications for IGBTs on the Rise
Grid connection Charger
Hybrid bus
- High-voltage modules (4.5kV, 6.5kV) partly replacing thyristors for HVDC links, e.g. offshore wind park connection
- Higher efforts on load management and grid stability
Trends
Drives, Home Applicances and Others Show Strongest Growth Rates
IPC: ~10% p.a.
IPC Segment Overview
Growth Drivers and Market Opportunities
Product to System Approach Improves Customers' Systems
New Generation RC-H5 IGBT Optimized for Induction Cooking Applications
New Thermal Interface Material (TIM) Improves Customers' System Reliability
Improvements on component-level Advantages on system-level
- TIM significantly reduces contact resistance between IGBT module and heat sink
- thereby helps optimize heat dissipation from IGBT module
- TIM applied during backend process
EconoPACK™+ coated with TIM
- higher power density
- greater reliability
- longer service life
simplifies customers' mounting and assembly processes
First IGBT Product to Ramp in Dresden on 300 mm Manufacturing Line in 2H FY14
RC-D discrete IGBT
- First IPC product to ramp on 300 mm thin wafer technology: 3rd generation RC-D IGBT.
- Target applications: induction cooking stoves, rice cookers, microwave ovens, and solar inverters.
- CoolMOS™, OptiMOS™ and RC-D IGBT products will further increase utilization rate of Dresden 300 mm fab throughout FY15.
IPC Segment Overview
Growth Drivers and Market Opportunities
Product to System Approach Improves Customers' Systems
- Growth of ~10% p.a. appears plausible given growth potential of main applications.
- Leading position in all relevant regional markets.
-
Penetration of new markets (e.g. grid infrastructure, hybrid buses, chargers) secures further growth.
-
Sales in excess of €180m per quarter drive Segment Result margin exceeding 15%.
-
Innovative products ensure sustainable earnings power.
-
Product-to-System: we create value for customers through products specifically optimized for the requirements of their systems.
- We are the clear technology leader.
Appendix 1: Infineon's Market Positions in 2012 Discrete IGBT Market
Source: IHS, "Power Semiconductor Discretes and Modules – World – 2013", December 2013.
Appendix 2: Infineon's Market Positions in 2012 IGBT Module Market
Source: IHS, "Power Semiconductor Discretes and Modules – World – 2013", December 2013.