The thermally conductive grease market is projected to register a CAGR of 3% during the forecast period (2021-2026).
The demand for thermally conductive grease is increasing with the increasing usage in electronic, electrical, and telecommunication, and IT industries. It is used to draw heat away from devices, contributing to improved reliability and operational efficiency of electronics and electrical components. However, the COVID-19 has badly affected the electronics and electrical industries due to lockdown regulations. Besides, the slowdown in end-market demand eased pressure on the electronics components supply chain, which is grappling with balancing supply and demand. However, despite considerable economic uncertainty around the spread of COVID-19, moves to secure social distancing and realize remote and contactless interaction with remote IT that utilizes the increasing sophistication of 5G and local 5G networks will boost the demand for solution services during the forecast period.
- Over the medium term, the major factor driving the market studied is the increasing demand from the electrical and electronics industry.
- On the flip side, the inconsistent performance of thermally conductive grease is expected to hinder the market's growth.
- The Asia-Pacific region represents the largest market, and it is also expected to be the fastest-growing market over the forecast period, owing to the increasing consumption from countries such as China, India, and Japan.
Key Market Trends
Increasing Application of Silicon-based Thermally Conductive Grease
- Thermal grease is thermally conductive but is an electrically insulating compound, which is commonly used as an interface between heat sinks and heat sources, such as high-power semiconductor devices.
- Silicon-based greases are capable of withstanding higher temperatures, which makes them ideal for the application, and thus, this increases the performance of the device. This application of silicon-based thermal grease is increasing its demand in semiconductor applications.
- Silicon-based grease is widely used in semiconductor devices, as silicone greases are cost-effective, filling the smaller air gaps effectively.
- The heat produced can be effectively removed by thermal conduction from the electronic component to a heat sink either by surface contact or using thermally conductive greases made of silicon.
- In the electrical and electronics industry, components such as semiconductors, transistors, integrated circuits (ICs), and discrete devices are designed to operate at a normal operating temperature range. However, the operation of an electronic component generates heat. If sufficient heat is not removed, the electronic component will operate at a temperature significantly above its normal operating temperature. Excessive temperatures can adversely affect the performance of the electronic component and the operation of the device associated with increasing failures. This raises the demand for thermally conductive grease in electronic and electrical industries.
- According to Japan Electronics and Information Technologies Industries Association (JEITA), the global production by the electronics industry (hardware, including electronic equipment, components, and devices) was expected to record negative growth, decreasing 1% year on year to USD1,967.4 billion in 2020.
- The Semiconductor Industry Association (SIA) announced that worldwide sales of semiconductors reached USD 36.6 billion for the month of October 2019, an increase of 2.9% from the previous month’s total of USD 35.6 billion.
- Hence, owing to the growing applications in silicon-based thermally conductive grease in the electrical and electronics industry, especially in Asia-Pacific and North American countries, the demand for silicone-based thermally conductive greases is expected to increase over the forecast period.
Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region is expected to dominate the market for thermally conductive grease during the forecast period. Due to the high demand from countries such as China, India, and Japan, the market for thermally conductive grease has been increasing.
- The largest producers of thermally conductive grease are located in the Asia-Pacific region. Some of the leading companies in the production of thermally conductive grease are 3M, Henkel AG & Co. KGaA, Kenner Material & System Co. Ltd, Chemtronics, and Momentive.
- Increasing usage of electronic devices and the presence of well-established electronic device manufacturers in the region are increasing the demand for thermally conductive grease.
- The “Made in China 2025” policy, published in May 2015, mentions specific targets to increase self-sufficiency in integrated circuits production to 40% in 2020 and 70% by 2025, thus, increasing the scope for this market in the coming years.
- Furthermore, China has the world’s largest electronics production base. Electronic products, such as smartphones, OLED TVs, tablets, wires, cables, and earphones, recorded the highest growth in the electronics segment. The country serves not only domestic demand for electronics but also exports electronic output to other countries.
- In China, with the increase in the disposable income of the middle-class population and the increasing demand for electronic products in the countries importing electronic products from China, the production of electronics is projected to grow.
- According to the National Bureau of Statistics of China, in December 2020, retail sales of household appliances and consumer electronics in China had amounted to about CNY 100 billion.
- Given the economic environment, in the annual industries survey conducted by JEITA, production by the global electronics and information technology industries was estimated an increase 2% year on year in 2020 to reach USD 2,972.7 billion, and 7% year on year in 2021 to record USD 3,175.6 billion. Positive growth is expected to continue on the back of greater demand for solution services and electronic components and devices, as countries around the world use remote information technologies to boost remote and contactless interaction in a bid to stop the spread of COVID-19.
- The aforementioned factors, coupled with government support, are contributing to the increasing demand for a thermally conductive grease market during the forecast period.
The thermally conductive grease market is fragmented, with players accounting for a marginal share of the market. Few companies in the market include 3M, Henkel Adhesives Technologies India Private Limited, Momentive, Boyd Corporation, and Novagard Solutions.
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Table of Contents
1.2 Scope of the Study
4.1.1 Increasing Demand from the Electrical and Electronics Industry
4.1.2 Other Drivers
4.2.1 Inconsistent Performance of Thermally Conductive Grease
4.2.2 Impact of the COVID-19 Outbreak
4.2.3 Other Restraints
4.3 Industry Value Chain Analysis
4.4 Porter's Five Forces Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Degree of Competition
5.1.1 Silicone-based Grease
5.1.2 Non-silicone-based Grease
5.2 End-user Industry
5.2.1 Automotive Electronics
5.2.3 Power Electronics
5.2.4 LED Lighting
5.2.5 Other End-user Industries
184.108.40.206 South Korea
220.127.116.11 Rest of Asia-Pacific
5.3.2 North America
18.104.22.168 United States
22.214.171.124 United Kingdom
126.96.36.199 Rest of Europe
5.3.4 South America
188.8.131.52 Rest of South America
5.3.5 Middle-East and Africa
184.108.40.206 Saudi Arabia
220.127.116.11 South Africa
18.104.22.168 Rest of Middle-East and Africa
6.2 Market Share (%)**/Ranking Analysis
6.3 Strategies Adopted by Leading Players
6.4 Company Profiles
6.4.2 Boyd Corporation
6.4.4 CHT UK Bridgwater Ltd
6.4.5 Henkel Adhesives Technologies India Private Limited
6.4.6 Kenner Material & System Co. Ltd
6.4.7 MG Chemicals
6.4.9 Novagard Solutions
6.4.10 PARKER HANNIFIN CORP.
A selection of companies mentioned in this report includes:
- Boyd Corporation
- CHT UK Bridgwater Ltd
- Henkel Adhesives Technologies India Private Limited
- Kenner Material & System Co. Ltd
- MG Chemicals
- Novagard Solutions
- PARKER HANNIFIN CORP.