Analyst lists 3 things he learnt at a major power semiconductor conference

Investing.com -- UBS analyst Francois-Xavier Bouvignies shared three key takeaways from the PCIM 2025 power electronics conference held in Nuremberg.

The analyst highlighted intensifying Chinese competition, improving inventory conditions, and the accelerating adoption of next-gen technologies like gallium nitride (GaN).

Competition from China is intensifying: UBS noted that concerns raised last year have now materialized. 

Bouvignies explained that “overcapacity and pricing pressure” hit the sector in late 2024 and into 2025, with some products seeing year-over-year price declines of 15% to 50%. 

While the pricing gap between Chinese and Western suppliers narrowed from 30-40% last year to 10-20% this year, UBS warned that “the competitive threat from China is becoming more tangible and apparent.”

Inventory normalization supports near-term outlook: UBS found that most companies expect inventories to be cleared by the end of the third quarter, which is “particularly true for the industrial market but also automotive.” 

Although visibility on end demand remains limited, UBS stated that lean inventories could set up a recovery in the second half of 2025 and into 2026.

The adoption of GaN technologies is gaining pace: Bouvignies said GaN continues to be a focus for the industry. “We found that some first application ramps for onboard chargers will take place in 2026,” wrote the analyst.

He added that the server market, with the emergence of AI, is also accelerating its development activity, “which could result in 2026/27 ramps, positive for GaN exposed companies.”

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UBS maintained a generally constructive short-term view on the sector and continues to favor Infineon (OTC:IFNNY) and STMicroelectronics (both rated Buy), while remaining more cautious longer term due to the “intensifying” competition from Chinese manufacturers.

 

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