TDK’s UK factory in Ilfracombe, Devon, was built in 1966 for Coutant Electronics, part of Unitech holdings, a financial operation formed in the 1960s to help fledgling electronics companies. Unitech acquired the Lambda group of companies to become Coutant-Lambda. Unitech sold out to CB plc and became Invensys, who decided power was a non-core business and in 2005 the business was acquired by TDK who had a small power business of its own but were interested in Lambda’s strength in Japan.
“It’s interesting to see how the landscape has changed since Countant and Lambda,” said Martin Southam, marketing manager for TDK-Lambda Europe. “Most of the other competitors have disappeared one way or another and to a certain extent the US power industry was dominant but much less now and there are fewer indigenous suppliers.”
Commoditisation and consolidation are key drivers for the current power market.
“On one level power is core to every design but I think it’s fair to say it is commoditising quite rapidly in one way or another,” he said. “There’s a lot of pressure on costs and the returns aren’t as great as perhaps they are in the software divisions of the same companies.”
As a result the power business at TDK is partitioned between industrial and automotive applications. “We are predominantly focussed in industrial and medical with a separate automotive divisions with DC-DC converters for electric vehicles,” said Southam. “They are different businesses, there’s relatively few customers in automotive and the challenges of designing for that environment are very different, compared to a largely distribution business, so it makes sense to keep it separate.”
This is partly because the telecoms and computing markets have seen significant cost pressure.
“We have divisions designing modules particularly in Japan and in Dallas that were more focussed on telecoms but now for the industrial medical segment, some are semi-rugged for transportation,2 he said. “The communications market is very highly commoditised in power terms. What you get with modules is commonality with drop in replacement which helps drive price commoditisation. Conventional supplies are less interchangeable.”
This standardisation of module footprint is driven by consortia such as the Distributed-power Open Standards Alliance (DSA) and more recently the Architects of Modern Power (AMP) consortium.
“We have participated in the DOSA consortium and those kind of de facto pinouts and brick sizes are very common and the communications market is advancing some of those things. We have done DOSA 2 designs to squeeze more out of the same footprint,” he said.
“Data centres are a very interesting segment of the market particularly when you talk about efficiency. That’s quite a unique market where you can design a product for higher efficiency at higher cost it’s a simple decision, whereas in most of our markets we are increasing efficiency but without adding cost. It’s harder for an equipment OEM to sell the energy saving to his customer, the equation is very different.
Whether new technologies such as GaN make a difference remains to be seen.
“We are using low voltage GaN in DC-DC converters already but high voltage GaN is a different beast. They are relatively expensive and it’s about understanding the benefits and whether it’s a cost effective product at this point in time or a few years down the road, probably the later. But it opens up more interesting opportunities in frequency and the opportunity to improve magnetics. TDK is a a major ferrite manufacturer so we can work closely in that area.
Having magnetics and ferrites in-house is definitely an advantage, particularly in the early stages of the design of a power supply, he says. Other manufacturers produce similar materials over time and eventually it commoditises but there are certain advantages in materials and topologies in automotive that can cross over into more commercial products.
“It’s still not an exact science, and we are always experimenting with more materials and seeing what the properties are,” he said. “It’s all about smaller, lower cost, quieter designs. There’s definitely more stress on improving the cost and size of the magnetics, and helping to improve efficiency. In terms of thermal cooling there’s a lot of new opportunities such as in LED lighting. This is using new materials for removing the heat and we are looking at how we could deploy them in new designs to get the heat away. No one likes fans and if they don’t have to use them they won’t, so customers are becoming more accepting of conduction cooling, so areas like that are interesting,” he said.
Digital control is one area that is growing, although more slowly than expected.
“We do work with digital power control loops, and looking at new controllers all the time. Prices have become more attractive in that area and there are a number of manufacturers with the right scale and expertise – it becomes expensive to do that yourself, for us it wouldn’t make sense so the supply chain is definitely very important,” he said.
The next wave of industrial automation – also called Industry 4.0 – is a key driver for this, he says, and digital communications such as the PMBus is an important element to be able to actively monitor the performance of the power supplies in industrial equipment.
“In some products we do PMBus for hot swap redundant products but other parts of the market are not so keen,” he said. “That could change in the industrial market with Industry 4.0 where more customers want to understand what the power supply is doing than before and up time becomes more important. It’s still early days with Industry 4.0 for what shape and form it actually takes. Today we are launching products with a PM bus option so you don’t have to pay for it if you don’t want to. Given the uptake that could be embedded going forward if the demand is high enough.”
“You could have intelligent power within a machine but the data will still be within the machine reporting its performance. We don’t see this being outside the machine, it’s part of the health checks. Everybody want reliable power supplies but they are increasingly important in an industry 4.0 environment with robotics and additive manufacturing where you can’t having these going down.”
The move to robotics is a benefit both form the manufacturing of supplies and driving greater demand for the supplies them elves.
“In my view robotics will be a major, major change in industry over the next few years. We are working with robots in our Japanese and one of our Malaysian factories where the payback can be a year or less. It’s a collaborative way forwards, with robots assisting humans rather than replacing them and taking care of some of the more repetitive tasks. I see that uptake as huge. The UK is way behind 40 other nations in the adoption of robots and the government needs to get on that. We’ve been doing some work assessing areas at Ilfracombe so it’s on our radar,” he said.
Southam sees the Internet of Things (IoT) as different from Industry 4.0. “It’s very much about low power sensors and energy harvesting so there’s not the opportunity, it’s a slightly different area,” he said. “IoT and automotive will see a massive explosion of sensors and they all need power for testing so there’s opportunities there. TDK have acquired several sensor companies over the last year or so and see great opportunities there. A lot of industrial supplies are testing something or other, a lot of it is related to test but then we are talking to the test equipment maker rather than the end customer.”
Consolidation can be a challenge for both power supply makers and its customers. TDK has tackled this with an Advanced Technology centre to evaluate the different power technologies that emerge and how they could be used
“We opened the Advanced Technology Centre in Bristol and for us the advantage of opening that was we were approached by component manufacturers to look at their devices, from large global companies to small startups and we look at them on an equal basis,” he said.
“Most of the smaller guys tend to get acquired if they have a good product and so the supply chain is less of a worry. The remainder have to become experts in profitable niches as it’s hard to compete with those guys in commodity power. The smaller companies become localised producing semi-bespoke products to key customers.
So is TDK a buyer or a target? “At the moment we are status quo, a global manufacturer with R&D in all the key locations,” said Southam. “But TDK is good at changing their business model over the years and will always make acquisitions when it makes sense.”