Geopolitical situation boosts sales of power electronics

Although renewable energy has now become the most cost-effective way to generate power, the inertia of existing fossil fuel business models and user habits remains quite strong. However, the latest geopolitical developments are once again creating more incentive for change. Following the recent shock to supply security caused by the war in Ukraine, the latest conflict has led to significantly higher prices, this time not only in Europe, but worldwide. The impact on the German economy is immediate, and economic growth this year is once again unlikely. 

The »fuel« for renewables is free and delivered right to your doorstep, which is why an energy supply based on renewables cannot be affected by short-term shortages. China, a country traditionally considered energy-poor, has recognized this and is driving electrification forward at a pace unprecedented in human history. More and more countries are following its path toward electrification and, with it, energy independence.

A key element in electrification is power electronics. Its job is to convert electrical energy into the form in which it is needed. This occurs, for example, between solar panels and the power grid, between the power grid and a cell phone via its charger, between the power grid and a car battery during charging, or between the car battery and the car’s engine when accelerating.

AI server farms are expected to consume vast amounts of power; here, the mains voltage must be converted to DC for the server racks, then to a lower voltage for the motherboards, and finally to the 0.9 V required by the processor. Even the speed of the compressor in the heat pump is controlled by power electronics.

This brief overview suggests that the electrification of society will likely result in a tenfold increase in the need for power electronic circuits compared to today. This is both a challenge and an opportunity. The large production volumes allow for larger development budgets to propel this technology forward; this budget must be used primarily to reduce production costs, maintain high efficiency (99% is the achievable target), and consume as few resources as possible.

At Fraunhofer IZM, we are in a great place for this: thanks to our in-house production capabilities, there is excellent communication between power electronics developers and manufacturing experts, and product development is carried out in a way that minimizes costs in later manufacturing. 

We are proud that our work helps advance this key technology for prosperity and environmental protection.

Professor Eckart Hoene

Chief Expert, Power Electronics