There has been a lot of talk in recent years about how hybrid electric vehicles (HEVs) and electric vehicles (EVs) will solve many of the world’s pollution problems. The potential is certainly there, but there is also some concern that the present shortage of raw materials may hinder growth.
Our segment of the supply chain is making every possible effort to minimize the risks, in particular the enormous and continuing industrial growth of China and India. That, coupled with their potential dominance in both supply and demand for key materials, could stifle the development of technologies that are vital if HEVs and EVs are to take off.
According to market researchers Yole Développement, power electronics is a key technology for hybrids, representing around 20% of the material costs. It is even bigger for pure-EV cars. HEV/EV power devices are used in dc-dc converters and dc-ac inverters—74% of the total power module market for HEV and EV cars, according to 2009 figures.
Power electronics consumes a lot of copper, which is needed to carry the high current. Ceramics like alumina and aluminium nitride are required to isolate the semiconductor devices, along with moly or aluminum silicon carbide (AlSiC) for base plates and lead-based or silver-based die-attach materials—plus miles of aluminium or gold wire to interconnect devices within the packages.
All of these metals or material composites are in abundance in the Far East, China, and other emerging economies. New material sources are being sought elsewhere as exploration technology and capabilities advance.
Positive engagement with raw material suppliers as well as with semiconductor and packaging vendors allows us to put long-term semiconductor die and raw material agreements in place, ensuring ex-stock availability of the key power electronics building blocks for HEVs and EVs.
Instead of traditional semiconductor materials, silicon carbide (SiC) is touted as a key enabling technology, with several companies developing inverter prototypes based on SiC diodes and switches like the recently introduced range from Semelab. SiC promises better power density, lower losses, and higher operating temperature. There’s also a significant size reduction, down to a quarter the size of silicon devices. SiC switches allow reduction of the cooling systems cost, too.
China is one of the world’s leading suppliers of SiC, but it does not dominate the supply of higher-grade material used in power semiconductors. In fact, in 2009 China imported 1.3 kilotons of top-grade SiC to supply internal demand.
Gallium nitride (GaN) is another possible option thanks to its better performance/cost ratio compared to SiC. It could make an affordable substrate for highly cost-sensitive inverter applications. Experience with GaN devices for extreme environments puts us in a good position to supply this demand.
On top of all the electronics, there’s the motors themselves. But, as one commentator put it, China is in the catbird seat with respect to the pricing of prime movers. Many of the vital materials for motor magnets come from China, though we are constantly hearing of newer sources being discovered, such as in South America (see “Digging at Deep Sands for Rare Earth Elements”).
Communications In The Supply Chain
It’s not all down to the Far East’s emerging economies, though. Recent events in Japan have compounded constraints on HEV growth. The long-term effect of the earthquake and tsunami on the supply chain is still unclear as Japanese suppliers suffer continued interruptions to power supplies. Raw material shortages could affect supply from late in the second quarter through the fourth quarter of 2011.
Our material management teams maintain regular contact with manufacturing partners and suppliers, asking them to review their base material stocks and lead times. Feedback from manufacturing centers in Europe, the Americas and Asia confirms there are no immediate or short-term/medium-term supply issues. Only active engagement like this will enable HEV and EV developments to continue apace.
Whether justified or not, there is nevertheless a tangible sense of panic among desperate power systems suppliers, leading to over-ordering of components like insulated gate bipolar transistor (IGBT) modules to guarantee security of supply. But a measured response will prove more helpful to the growth trajectory for HEVs and EVs in both the short and the longer run.
We can keep panic buying at bay by taking an active approach to these diverse developments in the power electronics world. This means not only maintaining the pipeline of innovative, state of the art custom power solutions across the range of emerging market applications, including HEVs and EVs, but also actively establishing manufacturing facilities in new emerging low-cost growth economies.
This will enable us to respond quickly to new product requirements and provide customers with faster times-to-market by finding ways around ever-longer lead times for key components. To do otherwise would most certainly hinder technology advances in HEVs and EVs.