Power Semiconductor

In many devices, electricity has to be converted before it can be used. Alternating current comes out of the wall socket, but a phone battery needs direct current at low voltage. It is precisely this conversion that power semiconductors handle. They are small components made of a special material that either lets current through or blocks it, depending on the control signal. In doing so, they act like an extremely fast switch that turns on and off thousands of times per second. Unlike the tiny components in a computer chip, they must withstand very high currents and voltages without burning out.

Why every percentage point of efficiency matters

No switch is perfect. With every switching action and every flow of current, some energy is lost as heat. For a phone charger, that amounts to a few watts. For an electric car or a wind turbine, it’s a matter of kilowatts that could otherwise be put to use.

A simple calculation makes this tangible. If an EV’s electronics lose two percent of energy instead of five percent, range increases noticeably without the battery having to grow larger. Batteries are expensive and heavy, whereas better semiconductors are comparatively cheap. That’s why carmakers invest heavily in these components.

Data centers for artificial intelligence also depend on this. There, electricity flows from the grid connection through several conversion stages down to the individual chip. Each stage loses some energy. Because such facilities now draw as much power as a small city, power semiconductors have become a topic for investors.

Silicon, silicon carbide, and gallium nitride

The classic material is silicon, a substance made from sand. It is cheap and well understood, but it has limits. At high voltages and high temperatures, it becomes inefficient. For several years now, two alternatives have therefore been used.

Silicon carbide, abbreviated SiC, can withstand higher voltages and more heat. It is used above all in electric cars and charging infrastructure. Gallium nitride, or GaN for short, can switch especially fast and is used at lower power levels. The strikingly compact phone chargers of recent years are a direct result of this technology.

The downside of these materials is their price. A silicon carbide crystal grows more slowly and is harder to process than silicon. That makes the finished components significantly more expensive. Manufacturers therefore calculate carefully whether the energy saved is worth it over the component’s lifetime.

From the charger to the stock market headline

In everyday life, you usually encounter power semiconductors invisibly. They sit in your laptop’s power supply, in a washing machine’s control unit, in a solar inverter, and in the drivetrain of every electric car. Even a fast-charging station is, at its core, a big box full of such components.

In business news, they show up under company names like Infineon, STMicroelectronics, onsemi, or Wolfspeed. These companies don’t build processors for computers, but exactly these current-handling components. Their stock prices react strongly to news from the auto industry, because that is where their biggest market lies.

A common misconception is to equate power semiconductors with the chips involved in the chip shortage. Both are semiconductors, but the requirements differ greatly. For processors, what matters is how many computing steps fit into the smallest possible space. For power semiconductors, what matters is how much current the component can handle with low loss and over a long lifetime. That’s why they are often manufactured in older, coarser fabs rather than the world’s most advanced plants.