A global slowdown in electric vehicle (EV) demand is triggering a wave of investment cutbacks across the power semiconductor sector, as companies face growing overcapacity.
According to KOTRA and the Nikkei on March 30, Japan’s Renesas Electronics has delayed mass production of power semiconductors at its Yamanashi plant. The company also plans to lay off several hundred employees by the end of the year. Renesas’ plant utilization rate dropped from 40% in Q3 to 30% in Q4 last year.
Sanken Electric, another Japanese firm, postponed its planned expansion of power semiconductor components by two years. Sumitomo Electric canceled plans to build a new semiconductor materials plant in Toyama and halted new production line installations at its Hyogo facility.
The world’s top power semiconductor supplier, Germany’s Infineon Technologies, is cutting 1,400 jobs and reassigning another 1,400 employees. U.S.-based Onsemi, the second-largest player, is laying off around 1,000 employees. Swiss company STMicroelectronics, ranked third globally, is launching an early retirement program.
Power semiconductors differ from system and memory chips in that they manage the flow of electricity within devices, helping improve energy efficiency and EV driving range.
Nikkei attributes the sector’s slowdown largely to a cooling EV market. According to research firm MarkLines, global EV sales in 2023 rose 9% year-over-year to approximately 11.37 million units. While sales grew, the pace slowed dramatically compared to 75% growth in 2022 and 30% in 2023.
Inventory levels are also climbing. For seven major power semiconductor producers in the West and Japan, the average time between production and sale reached 99 days in Q4 last year-an 18% increase from the same period a year earlier.
