The popularity of LED lighting in commercial and retail applications is driving much of the growth in this market, as businesses seek to save energy and money by replacing fluorescent lighting with LEDs. However, the LED lighting market is becoming highly volatile and competitive, putting increasing pressure on average selling prices and profit margins. This situation is causing large power supply companies to explore other sectors and custom orders where profit margins are potentially higher.

Regional growth led by Asia-Pacific.
Asia Pacific was the largest regional market for power supplies in 2018, based on both revenue and unit orders, accounting for 62.5 percent and 74.6 percent of the regional market share, respectively. The Americas was the second largest market in 2018, accounting for 21.1 percent of revenue and 14.4 percent of unit orders. Europe, the Middle East, and Africa (EMEA) accounted for the remaining 16.4 percent of revenue and 11.1 percent of unit shipments in 2018.

Revenue growth in Asia Pacific is expected to slow between 2017 and 2022, driven by declining growth in AC-DC commodity applications. However, Asia Pacific is still projected to maintain the largest share of revenue and unit shipments, reaching 59.3 percent in 2022.

Market growth driven by non-commercial AC-DC applications.
The custom AC-DC power supply market is projected to be the fastest-growing market segment from 2017 to 2022, with a revenue CAGR of 10 percent, compared to 2 percent growth in DC-DC applications and a 0.2 percent decline in the commodity segment. This growth in the non-commercial AC-DC segment is primarily due to strong growth in LED lighting and medical applications. Revenue for the custom AC-DC power supply market exceeded revenue for the commercial AC-DC power supply market by 30 percent in 2017.

LED lighting was the largest segment of the AC-DC and DC-DC commercial power supply market, accounting for 27 percent of total revenue in 2018, closely followed by the high-margin and low-margin mobile device and charger segment, with a 25 percent share. The revenue share of the mobile device and charger segment is expected to decline to 18 percent of the total power supply market by 2022, due to stagnant demand and declining average selling prices in the mobile device and charger segment.

By Dinesh Kithany, industry analyst, wireless energy and power supplies, IHS Markit