REPORT SCOPE
INTRODUCTION
“Thermal management” is the term used to describe the array of material technologies and problem-solving design tools that systems manufacturers apply to regulate the unwanted heat caused by the normal functioning of an electronic system. Thermal management technologies are an important part of the electronics industry’s drive to develop ever higher-performance applications.
This focused document profiles the top 10 companies of this industry, and updates the emerging and potentially transformative technologies connected to the field. The definition of the industry is broadened beyond purely electronic cooling for this report, and includes overlapping green energy opportunities, as there is evident movement toward these high potential areas.
In 2011, the world thermal management market sector is valued at about $8 billion. Thermal management hardware (e.g., fans and blowers, heat sinks, etc.) accounts for about 84% of the total thermal management market. The other main thermal management product segments (software, interface materials, and substrates) each account for between 4% and 6% of the market.
For thermal management companies, the cost of doing business has increased. Aluminum and copper are traditional heat sink materials, and nickel and steel are also employed (as nickel is used for both plating and in the formulation of stainless steel, which is commonly used on heat sink installation hardware such as screws, springs, round wire clips and flat band clips). Over the past few years, prices have risen steeply for these materials. Companies have attempted to absorb the increasing prices of materials in a bid to remain cost competitive, but have recently been forced to pass on higher costs to their customers. This is, in part, also due to rising labor costs. In China minimum wages have increased 60% since 2008, plus additional labor laws have dramatically increased costs for overtime, benefits, housing, meals, etc. This means that direct labor rates increased and the overhead rates applied to direct labor rates, have risen.
STUDY GOAL AND OBJECTIVES
This document is a specialty report related to the BCC Research report SMCO24G authored by Andrew McWilliams. The goal of this document is to provide a more in-depth look at the top tier thermal management companies and some look at the second tier of companies and any changing and current trends in the global thermal management market sector.
The objectives include identifying companies that are considered the leaders and what technologies or management contributions make them leaders. There are certain market drivers and some constraints to both the companies and to the evolving technology they seek to dominate. There is a desire to ascertain if these companies will be able to meet the continuing demand for their products by proprietary technology, strategy alliances, superior marketing or other sought for advantages.
INTENDED AUDIENCE
This report is intended especially for suppliers of thermal management technologies and products, and others with a need to understand the status and dynamics of the market for these products. Although the report is organized around specific technologies, it is largely nontechnical in nature and coverage. It is concerned less with theory and jargon than with what works, and how much of the product the market is likely to purchase, and at what price.
As such, the report’s main audience is executive management personnel and marketing and financial analysts. It is not written specifically for scientists and technologists, although its findings concern the market for their work and include the availability of government and corporate research funding for different technologies and applications, which should interest them.
SCOPE
The scope of this report is focused on a select 10 companies in thermal management technologies. This is in many ways a selected due diligence of the key companies and drivers in the thermal management market sector.
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MARKET SUMMARY
The following is the market summary information in an abbreviated form taken from the BCC Research report, SMC024G The Market for Thermal Management Technologies, authored by Andrew McWilliams and published in September 2011. Some tables and figures are emitted in this abbreviated summary text.
As a result of the widespread introduction of microelectronics, together with the increasing demands on their functionality and reliability, thermal management has become an important issue in almost every branch of industry, including professional and consumer electronics systems as well as automobile electronics, electronic lamps, and domestic appliances. As the world emerges from the worst financial and economic crisis in decades, BCC Research expects total global thermal management revenues to grow from about $7.5 billion in 2009 to nearly $8.0 billion in 2011 and $10.9 billion in 2016, a CAGR of 6.4% over the next 5 years.
The various product segments differ significantly in terms of revenue size and projected growth rates. Hardware is the largest product segment, with revenues of $6.3 billion (84% of the market) in 2010 and $9.1 billion (83.8%) in 2016. This segment has benefited from the increased implementation of heat management solutions in high-volume commodity systems. Most of the products in the hardware category have matured in the largest electronic applications markets.
The thermal management software market was worth $350 million (4.7% of the total thermal management market) in 2010, a figure that BCC Research expects to exceed $500 million (4.6% of the market) by 2016. While significant growth is expected from the increase in design starts worldwide, unit prices are declining. Still, as more of the modeling of the thermal characteristics of a system is moving to the design end of product development, the software market is expected to benefit. The emergence of new applications markets for the thermal modeling software is also expected to drive growth in this segment.
At a CAGR (compound annual growth rate) of 8.0%, thermal interface materials have the highest projected growth rate of any product segment. Suppliers have developed interfaces to aid in automated assembly, and interfaces will be the main type of thermal solution for compact and portable electronic devices. As a result, the market for thermal interface materials is projected to grow from $390 million in 2010 to nearly $627 million in 2016. Price pressure on high-volume applications should prevent revenues from growing even more rapidly.
The market for thermal management substrates is expected to grow from $480 million in 2010 to $485 million in 2011 and $635 million in 2016. The substrate segment’s 5.5% projected CAGR is the lowest of any product segment.
The North American thermal management market will maintain its number one position throughout the period under review, with a market share of about 37.0%, followed by Asia-Pacific with around 23.0% to 24.0%. The Asia-Pacific countries (except Japan) are not only the second-largest market in absolute terms, but they also have the highest projected growth rate.
