The power module packaging supply chain is continually being reshaped, states Yole Group in its new power electronics report, "Status of the Power Module Packaging Industry." New companies are starting to manufacture power modules, and established power module players are expanding their product portfolios and forming new partnerships and M&As.
Today, the leading power module suppliers are mainly located in Europe and Japan. They include Infineon Technologies, Semikron Danfoss, STMicroelectronics, Fuji Electric, Mitsubishi Electric, and Rohm. These traditional market leaders are increasingly facing intense competition from Chinese companies, such as StarPower, CRRC, BYD, United Automotive Electronic Systems, ACCO Power, and MACMIC, as well as Tier-1 automotive manufacturers like Denso, Bosch, and BorgWarner.
Shalu Agarwal, PhD, senior technology & market analyst, Power Electronics and Battery at Yole Group, said "Step by step, at Yole Group, we see more and more Asian packaging material players entering the power electronics packaging industry. And this strongly pressurizes European players to reduce costs."
Yole Group has released its annual "Status of the Power Module Packaging Industry" report for 2025. This edition offers a comprehensive analysis of manufacturing facilities for power modules and power module packaging components, detailing their locations, especially those focused on encapsulation, die and substrate attachment, ceramic substrates, and electrical interconnections.
In terms of competition, the report provides an in-depth examination of China’s power module industry, highlighting supply chain dynamics and the involvement of Chinese automotive OEMs. The 2025 report also explores industry trends, distinguishing between application-specific developments and broader technological advancements. It covers key innovations such as the shift toward smaller-sized modules, power modules integrated with coolers, lower-inductance designs, and hybrid SiC-MOSFET and Si-IGBT power modules. Additionally, it introduces the concept of embedded die PCB packaging and investigates the potential of GaN-based power modules.
Furthermore, Yole Group’s analysts delve into power module packaging technologies, analyzing the technical choices of leading power electronics companies. As a market research and strategy consulting firm, Yole Group offers dedicated comparative analyses with a specific focus on automotive solutions.
Reducing the production costs of power modules is crucial for each industry. As a result, most power module manufacturers, including Infineon Technologies, onsemi, Rohm, and STMicroelectronics, have established their packaging facilities in China and Southeast Asia to adapt their activities to satisfy the evolving market. This strategic decision allows them to benefit from lower operational costs. It is also an opportunity for them to be closer to their Asian customers, as demand in China remains stronger than in many other countries.
Key suppliers of power module packaging components are primarily located in Japan. Yole Group identifies Shin-Etsu, Sumitomo Bakelite, and Resonac, amongst many more. In the United States, Rogers Corporation, MacDermid Alpha, 3M, Dow, and Indium Corporation are also part of the ecosystem. In Europe, Heraeus is also active. Most of these suppliers have manufacturing facilities in Asia, particularly China, Japan, Singapore, and Malaysia.
In China, international companies like FLH (formally known as Ferrotec), Tanaka, Heraeus, MacDermid Alpha, Shin-Etsu, and Denka are dominant suppliers of power module packaging components. Additionally, smaller Chinese companies are making their mark. They are supported by major corporations like BYD, Bosch, and Infineon Technologies, for example. This trend hints at significant growth in the number of packaging materials providers in China in the coming years.
Geographic expansion is increasing, with several power module packaging component companies relocating or planning to move their production facilities to countries with lower costs, such as China, Malaysia, Vietnam, Hungary, and Romania.
This move is clearly intended to cut costs while moving closer to customers. For instance, NGK Insulators plans to manufacture ceramic substrates in Poland, while Heraeus is launching a new production line for ceramic substrates (AMB 2.0) in China. KCC has already started its ceramic substrate manufacturing facility in Vietnam. Many European and US companies, including Henkel, MacDermid Alpha, and Rogers Corporation, are focusing on China to expand their packaging components in response to the increasing demand for electric vehicles and renewable energy solutions.
The game is far from over. Yole Group’s power electronics analysts continue their investigation, tracking supply chain developments and industry leaders’ strategic moves.