We hate to admit it — some are still in denial — but the business of making and selling “assembled” dc-dc converters is rapidly being “commoditized.” When manufacturers, customers and industry analysts speak in terms of dollars per Watt or dollars per amp (it might as well be dollars per pound or dollars per gallon), it's all over. The balance of power has already switched from sellers to experienced buyers. And what do those buyers want? They want everything, including rock-bottom prices, standard products, standard pinouts, multiple sources, zero-defect quality, on-time delivery and vendor-managed inventory.
Technical superiority (“My quarter-brick has more Amps than yours”) is no longer a sustainable competitive advantage as the big consumers in the industry “dumb down” requirements or pull-up vendors to ensure multiple sources for all high-volume products. Many industry participants working on thin margins can no longer afford big R&D budgets and are coming to depend on component advances (such as capacitors, FETs and inductors), enabling their higher-performing dc-dcs.
Adding insult to injury, the component and IC manufacturers (who supply components to the dc-dc assemblers) are going directly to OEM end users with compelling arguments for bypassing the assemblers and building your own. Many dc-dc vendors, particularly those who have made their living on the large telecom/datacom and IT OEMs, watch helplessly as their potentially highest-volume opportunities slip away.
Worse, the total available market for assembled dc-dcs is likely declining, and every company that takes the time to strategically plan has concluded the only way to survive is to grab for market share, which is good news for consumers but a competitive nightmare for manufacturers.
What are the dc-dc assemblers to do? Resistance isn't futile. We can avoid assimilation through innovation. The answer is always the same: You stay ahead of your competition by offering greater value. For assembled dc-dcs, greater value can take the shape of lower prices for today's products — we're trying that one now, and it hurts — or added performance/functionality for the same price.
For those of us choosing the latter course, we are fortunate the Intermediate Bus Architecture (IBA) has burst onto the power-converter scene. This new approach to on-board power is fertile ground for innovation. The IBA presents ample opportunity for savvy marketers to identify needs and innovative engineers to develop products to address them. Witness incredibly efficient bus converters (that restore lost system efficiency), point-of-load (POL) converters fabricated as multichip modules (smaller, cheaper), new brick POLs and more. Developing and marketing these new products has proven to be far more invigorating and rewarding than dividing by two and grunting out a 1/16 brick.
In terms of market characteristics, the IBA promises to bring the mature dc-dc market back into a growth stage. It gives nimble, smaller companies, such as Datel, the opportunity to go up against slow-moving industry behemoths who rely on manufacturing muscle. The IBA gives everyone the opportunity to sell on something other than price and delivery. We sell using education. As my mentor once said, “You know you have a leading-edge product if you have to teach people how to use it.”
In coming months, product innovations will include power supplies with minds of their own. Devices will “sense” their application and immediately set their output voltage (to the requested level), select their switching frequency (to optimize their efficiency), establish their I/O protection limits (appropriate to Vin and Vout conditions), and select a compensation scheme (for stability and quick step response). Embedded microcontrollers offer the promise of these cost-effective, one-size-fits-all dc-dcs that will save money for both assemblers (fewer devices to design/assemble/stock) and users (fewer devices to evaluate/purchase/stock).
Look out for devices that will use the I2C bus to communicate for setup, sequencing, interleaving, load sharing, fault detection and more. It all means less design time and maintenance for users. Of course, it will all be standardized, multisourced and at lower prices than today. Like I said, it's all over.
Chuck Sabolis has been DATEL Inc.'s director of marketing for the past nine years. He has more than 20 years experience in the electronics industry in assorted roles including Director of Engineering, Director of Advanced Technology, Strategic Planning Manager, Product Line Manager and Long-Range Planning Consultant. Chuck oversees all Marketing functions at DATEL including strategic planning, new-product planning, technical support, advertising/promotion and Internet activities. He has published several articles and papers. He has a BSEE degree from Syracuse University, and MSEE and EE degrees from MIT.