The Li-ion battery manufacturers have been such a reliable component of the supply chain that news of change does not often make headlines. But Convergent Semiconductors has always recognized the battery market as a leading indicator for end product trends and the related memory market. For example, battery manufacturers quickly discern demand changes for notebook PCs, desktop PCs, or Tablets. A push-out by an OEM or a reduction in orders during traditionally high demand periods signals economic or market changes. The sluggishness of the notebook/UltraBook market, because of retarded economic recovery and limited hiring, has caused battery manufacturers to adjust not just current production plans, but also long term manufacturing.
The mobile consumer high volume or high volume/high value markets such as Smartphones, Tablets, and eReaders scored a cumulative 71% growth rate between 2010 and 2011. The high value automotive battery market for EV/HEV (electric vehicles/hybrid electric vehicles) is another growing market, with healthy ASPs (average selling prices). These are the markets battery manufacturers are supporting with investments. The notebook/UltraBook market will continue to be an important high volume consumer of batteries, but is not pushing the technology or stimulating higher ASPs.
Shifts in Demand
Manufacturing investment changes by battery makers indicate that the greatest current demand segment with continuing high growth is mobile consumer, specifically Smartphones, eReaders and Tablets. The leading Li ion manufacturers are increasing output to support those growing consumer mobile markets. Convergent Semiconductors sees those markets growing by a cumulative CAGR of 37% over five years. Growth in the notebook/UltraBook segment is expected to be single digit.
There is optimism in the battery industry over demand for automotive products. Automotive is finally a serious market to battery manufacturers with the acceptance of Electric Vehicle and growth of the market to millions of units sold. After investing billions of dollars to provide batteries, demand is finally rising. Government support for charging stations in larger cities around the world will further stimulate the popularity of EVs.
It is not just the volume issue that is driving battery manufacturers to modify production. As in the memory segment, it is return on investment and higher ASPs. Consumer batteries for products including mobile phones, Smartphones, camcorders, digital still cameras, digital audio players, portable game devices, notebooks, UltraBooks, etc. have an average selling price of around $2.50, while the average selling price of an EV (Electric Vehicle) battery was around $42.30 in February of this year. EV batteries may be high volume, but the ASP is certainly more attractive.
Geographic Areas of Production
It is widely accepted that mobile consumer products demand a lot of batteries. China has become the major source of low cost Li-ion batteries that serve a broad spectrum of the mobile consumer market. Korea continues to grow in its influence in the battery market as it expands production for the high volume but higher priced mobile markets including Smartphones and Tablets. Japan is expected to lead in the production of EV/HEV batteries.
What Does This Mean for Memory?
The semiconductor market tends to look inward for technology trends that impact all segments of hardware design and demand. Memory depends upon the progression and availability of processors, controller and other semiconductors to support the mobile consumer market—just as those segments depend upon memory. What Convergent Semiconductors recognizes is that the consumer mobile market is moving without the total semiconductor market participating in this post—PC era. Subsystem design enables end system designers to easily offer new applications to users without the total redesign of the platform. High volume commodity DRAM no longer dictates the memory systems. Now the systems include NAND Flash in higher volume as manufacturing costs decline and higher density products become available. It is the system ability to offer applications that drives this mobile consumer market. It is the mobile aspect that drives the battery market.
The mobile consumer market is good for the memory market, just different. Mobile DRAM, NAND Flash, and SSDs will all see double-digit growth in the coming years. This will also force the development and adoption of stacked packages of 2.5D or 3D variety. Hybrid packaging will develop to offer memory subsystems to OEM system designers in order to differentiate, make for a specific locale of application and accomplish this quickly and easily.
www.convergentsemiconductors.com - Global Analysis of Memory Strategies and Issues
Key words: Mobile phones, Smartphones, Tablets, eReaders, Electronic dictionaries, Camcorders, Digital still cameras, Digital audio players, Portable game devices, DRAM, Li-ion battery, Prismatic battery, Polymer battery, NAND Flash, hybrid packaging, 2.5D packaging, 3D packaging, TSV
