This article offers a glimpse into the passive components market for industrial end-use segment prepared by Dennis M.Zogbi, Paumanok Inc. and published by TTI Market Eye.
The industrial end-use market segment constitutes about 20 percent of the global value of worldwide consumption for passive electronic components (capacitors, resistors, inductors and circuit protection components) and represents a highly profitable segment of the global supply chain due to the unique combination of higher unit volumes and technology requirements to compete in the space.
From a supply chain perspective, the industrial supply chain is a grand ecosystem where pricing and volumes are respectable, but not as demanding or scrutinized as the high-reliability and sensitive components consumed in defense and medical end-use market segments. However, it is also not as intense as the trillion-piece markets for passive components in communications, computers and consumer electronics.
The definition of what constitutes an industrial-grade capacitor will differ by passive component type, world region and manufacturer. For the purposes of this article, we are including all power transmission and distribution, motors and drives, renewable energy, lighting, power supplies and the myriad of fragmented industrial markets in power electronics that require smoothing, power factor correction, circuit protection, commutation and burst power.
Paumanok Research has determined that the industrial electronics segment is subject to continuous changes based upon the improvement of the efficient generation, transmission, distribution and consumption of energy for the purposes of converting electrical energy to force and lighting. We also extend our definition of industrial capacitors here to include additional line voltage products, such as white goods (i.e. large home appliances), lasers, rail guns, traction devices, furnaces, broadcast transmitters, radar pulse forming networks, welders and external defibrillator product markets as well.
Quantifying Industrial Markets as 2022 Begins
Many types of capacitors, resistors, inductors and circuit protection components are used in the industrial electronics end-use market segment for capacitance, resistance, noise abatement and circuit protection.
In the industrial grade capacitor supply chain, all capacitor dielectrics are used, with emphasis upon plastic film, ceramic, aluminum, tantalum and carbon.
In the industrial grade resistor supply chain, we note the use of specialty thick film chips that employ formulated thick film pastes, but also the use of many of the axial and radial leaded parts, such as tin-oxide, wirewound and nickel-chromium type industrial grade resistors for high voltage and rugged environments.
In industrial grade discrete inductor supply chain we note the use of traditional ferrites, but also markets for ceramic chip coils and axial and radial leaded micro-inductors.
In circuit protection components, there is significant usage of industrial grade metal oxide varistors for overvoltage protection; and polymer and ceramic type PTC thermistors for overcurrent protection in industrial electronics as well.
The Value Proposition of Specific Passive Components
The following describes the benefits of each type of key passive electronic component used in industrial electronics.
Plastic Film Capacitors for Industrial Electronics – The plastic film capacitor market (which represents 50 percent of the market value for all industrial-grade capacitors as defined by Paumanok Research) is further divided into AC plastic film capacitors for electrical systems and DC film capacitors for electronic systems. The plastic film capacitor market is also determined by its dielectric – in this instance, polypropylene (PP) film is used for AC electrical capacitors and polyethylene terapthalate (PET) is used for electronic signal smoothing capacitors. Plastic film capacitors are electrostatic designs and therefore have high voltage handling capabilities, but at low capacitance values.
The benefit of film is the self-healing nature of the plastic dielectric that works well when the capacitor is constantly subjected to the rigors of high-voltage electrical stress. Subsequently plastic film capacitors are used for power factor correction, signal smoothing and burst power in a myriad of markets throughout the industrial power supply chain.
Ceramic Capacitors for Industrial Electronics – Ceramic capacitors are also electrostatic and are also used in industrial grade power electronics. The industrial grade ceramic capacitor market includes single layer disc ceramic capacitors, high-voltage “doorknob” capacitors, multilayered axial and multilayered radial capacitors and the bulk of the market in high voltage ceramic chip capacitors to 5kV for smoothing, bypass and decoupling circuit applications.
Ceramics have made significant inroads into the line voltage segment of the market because they have lower pricing and robust performance when compared to plastic film capacitors. Ceramic capacitors are also high voltage, low capacitance “electrostatic” designs in the same manner as film capacitors
Aluminum Capacitors for Industrial Electronics – Large can and snap-mount aluminum capacitors are also used in industrial power electronic applications for a variety of circuit functions. Primary applications for aluminum capacitors in industrial environments include their required use as a key component in industrial motors and drives for starting, and for the smoothing of output signals on power supplies. Aluminum capacitors are generally limited to 450 to 500 volts per capacitor, but have extremely high capacitance values that are by-products of its “electrochemical” design that uses a wet electrolyte to achieve the desired voltages.
Carbon Supercapacitors for Industrial Electronics – Double layer carbon super capacitors are used for actuated power applications in industrial environments, motor start, energy storage and as battery load leveling in trucks and busses; and are one of the fastest growth segments of the industrial capacitor market worldwide. EDLC supercapacitors are also used in data server farms for solid-state disc drive protection; in windmills for nacelle adjustment of the blades; and for braking energy recoup and track-switching in electric rail systems.
Tantalum Capacitors for Industrial Electronics – Large case-size molded chips and molded axial and radial tantalum capacitors, as well as hermetically sealed tantalum capacitors can be found in industrial environments where the combination of high capacitance in a small case size is the circuit requirement. Therefore, we see tantalum capacitor applications in switchboard apparatus and in motor controllers as well as for applications in DC/DC converters.
Tantalum capacitors are also a key product line for oil & gas electronics applications such as logging tools and downhole pumping equipment where the combination of voltage, capacitance requirement and operating temperature dictate the usage of the tantalum dielectric.
Industrial Grade Resistors, Inductors and Circuit Protection
In addition to the large value proposition that industrial electronics brings to the capacitor supply chain, there is equal value in providing resistance and inductance to industrial electronics customers. In fact, the industrial market sector is a large percentage of overall market value for linear and non-linear resistors, inductors and circuit protection components.
Industrial Grade Thick Film Chip Resistors and Networks – High-voltage thick film chip resistors based upon a precious metal thick film on a ceramic substrate is a key resistor product line for industrial electronics. The thick film chip resistor is usually the high volume resistive solution for most professional and industrial electronics.
The variable for high voltage applications for thick film chip resistors is in the thick film paste, which is usually manufactured from a special type of ink to withstand the higher voltages in industrial environments.
Industrial circuits, especially for motor controllers, also employ thick film resistor networks in single-in-line and dual-in-line packages for high voltage line voltage applications.
Industrial Grade Nickel-Chromium Resistors – Almost all of the specialty and high-reliability resistors based upon nickel-chromium are in fact destined for professional and industrial electronics circuitry. This includes both thick and thin film type nichrome film resistors, which come in a variety of industrial configurations such as surface mount, axial, radial and MELF designs; and wirewound resistors, which also employ nickel chromium wire wrapped around a ceramic core.
Nichrome film resistors are consumed in industrial electronics where voltage is applied, and are key components in industrial motor controllers and thermostats.
Industrial Grade Tin-Oxide Resistors – Flameproof type tin-oxide resistors are based upon antimony-10 elements and involve thick film coating of a ceramic core for high voltage applications. The tin-oxide resistor is known for its applications above 1 kV in high performance industrial electronics systems and sensitive environments.
Industrial Grade Inductors – In the discrete inductor segment both ferrite type and ceramic coil type components are employed in surface mount, axial and radial leaded configurations. In addition to the well-known “ferrite bead and bead array” product lines, we also see a significant use of the unique ferrite cores in power supplies in industrial environments.
Circuit Protection Components – Industrial electronics are also a key end-market for overvoltage and overcurrent circuit protection components. The metal oxide varistor, based upon zinc oxide technology, is the primary overvoltage protection component consumed in industrial electronics applications because of its ability to arrest excess line voltage in high voltage circuits. However there is also the overcurrent market where we see significant market value associated with fuses and thermistors consumed in industrial end markets.
Applications for Components in Industrial Environments: 2021
The following describes the various levels of the supply chain for components in the industrial end-use market segment.
Power Transmission and Distribution –Components used for power transmission and distribution applications are generally employed in circuits from between 3 kV and 745+ kV. Distribution-class capacitors for example are generally pole-mounted in series and parallel to achieve voltage requirements from 3 to 15 kV, while transmission-class capacitors are rack mounted in both series and parallel to be used in power transmission systems to 745 kilovolts (or higher, as some capacitor banks are rated to 100,000 volts).
Power transmission and distribution capacitors are large markets globally, and require power utility and government investment for growth. The renewable energy portion of the market is more open and diverse with more opportunities for merchant vendors to sell capacitors to manufacturers of inverters who are not under the auspices of major power transmission and distribution turnkey projects. Developments in high-voltage direct transmission are impacting the size and weight of power-factor correction capacitors for offshore wind projects. Another important market here is the use of metal oxide varistors for circuit protection. Large blocks of zinc oxide are consumed for lightning and power protection of switchgear at the station and the transmission architecture of modern power grids.
Motors and Drives – The motor run capacitor market has traditionally grown in accordance with new home building globally, which in turn drives sales of large home appliances, such as air conditioning equipment and refrigerators (motor run capacitors are consumed in the split capacitor motors found in refrigerator and air conditioner motors).
The market for large home appliances and HVAC systems is driven primarily by new home sales; but aftermarket sales are also influenced by a quest for improved energy efficiency. The motor run capacitor business has been showing signs of improvement in response to the global movement to make white goods’ appliance motors more efficient because they are responsible for a large portion of global electricity consumption.
Clear market opportunities exist for industrial capacitors used in industrial motor drives, especially variable frequency drives that have proven that they provide the greatest level of power efficiency in industrial environments. Both AC plastic film capacitors and large can aluminum electrolytic capacitors are positively affected by this growth market.
Large can aluminum electrolytic capacitors are consumed in industrial motor drives. These are generally high-capacitance, high-voltage, high-ripple current and long life aluminum electrolytic designs with rated voltages from 10 to 500 volts with capacitance values from 84 to 100,000 microfarads. AC plastic film capacitors used in industrial drives can handle thousands of volts per cell but at extremely low capacitance, generally in the 1-microfarad range. Both are used primarily for smoothing the signal and are considered primary components for efficiency in the system, and are therefore of great importance and the subject of continual research and development.
Also finding a key end-market in motors and drive assemblies are wirewound, nichrome and tin-oxide resistors; as well as metal oxide varistors and thyristor type circuit protection components (both are used for overvoltage protection), as well as NTC and PTC thermistors for inrush current limiting.
Renewable Energy Components – Readers should note that there are similarities between the circuits found in automotive, solar and wind renewable energy systems, primarily in the inverter, converter, battery management, charger and the DC link circuits that expand the overall market for components consumed in this segment. Since long-term growth is expected for all renewable technologies, the opportunity for capacitors is significant and should not go overlooked, especially by manufacturers of plastic film capacitors, aluminum electrolytic capacitors and double layer carbon supercapacitors all of which are consumed in renewable energy systems for power factor correction and burst power.
Power Supplies, Adapters and DC/DC Converters – Switch mode power supplies and DC to DC converter modules require capacitor smoothing for the input filters, which is usually plastic film or ceramic; and the output filters which is usually always aluminum electrolytic but sometimes tantalum. This is an enormous market globally because every electrical device usually requires a power supply of some type, so every television set, or home theatre accessory; every power adapter and transformer requires capacitors.
The greatest market value is in the output filtering process because of the required combination of voltage and capacitance, which is a narrow area for the aluminum capacitor manufacturers to compete in, but it represents a significant portion of the overall aluminum capacitor market on a global scale.
We see a significant amount of activity in making power supplies, adapters and converters smaller and more efficient and the capacitors are an important part of that equation. Power supply customers for both aluminum and plastic film capacitor manufacturers are so critical to the larger capacitor market that competition among the relatively few major manufacturers in power supplies makes the market aggressive and competitive. These power supply markets are also critical end-markets for resistors and inductors, with nichrome film, wirewound and tin-oxide resistors as well as ceramic chip coil inductors.
Lighting Capacitors – Both AC and DC film capacitors count lighting as a major end-use market segment and this has been true for decades. AC film capacitors have been historically consumed in two separate markets in the lighting ballast industry- the PFC magnetic ballast business, and in the high intensity discharge lighting business. The DC film capacitor markets are heavily invested into ballasts of all type including electronic ballasts and LED drivers. Capacitors used in lighting are for signal smoothing, interference suppression and in some instances burst power and can be either plastic film, ceramic or aluminum in design and in many instances a combination of all three dielectrics in a single ballast.
Hidden Gems: Fragmented Sub-Markets
Pulse capacitors are DC circuit capacitors that absorb or supply strong current surges. They are charged sporadically and briefly discharged in relation to the charge time or vice versa. Discharge capacitors are subjected to high loads, high field strength and large peak currents because of the fast discharge and require advanced technical knowledge to build. Pulse capacitors find their niche in various forms of research and development for generating strong magnetic fields; for high-energy light flashes; high-temperature electronics and high pulses of electrical energy.
The following applications for pulse components illustrates the variation in end markets for the fragmented sub-markets for capacitors in various granular sub-segments of the larger markets:
- Laser (industrial & medical)
- Defibrillator (external only)
- X-Ray machines (pulsed)
- Ultrasonics (pulse welders, cleaners)
- Airport runway strobes
- Pulse forming networks for radar
- Water purification
- Railgun power
- Missile power-up
- Food sterilization
- Marx generators
- Television and radio transmitter capacitors
Summary and Conclusions
The industrial end-use market for components is a broad category that includes multiple levels of fragmented supporting markets. Plastic film capacitors are the primary dielectric consumed in the space, but specialty packaged and designed ceramic capacitors and large can aluminum capacitors also have considerable market share and represent large dollar values within the industrial end-use segment. Emerging capacitor markets include the double layer supercapacitor for load-leveling and energy recoup and for tantalum capacitors consumed in motor controllers used in robotics and 3D printers.
The overall trend in the market remains positive because of government regulations and goals from around the world regarding not only the generation of the electricity but also the improvement of power efficiency in multiple power-hungry line voltage devices.
Capacitors, resistors, inductors and circuit protection components play an important role in this transition and will continue to do so for the foreseeable future suggesting a slow but steady growth market over time with significant opportunities in industrial supply chains.