Energy efficiency and reliability
The requirement from customers and legislation for products to consume and waste less energy is driving demand for more efficient power converters. This goes hand in hand with reliability for critical applications as ultra-high efficiency products do not require relatively unreliable fans to cool them, and cooler systems mean key components such as electrolytic capacitors have longer lifetimes.
We have developed a portfolio of XP "Green" Power products with class-leading efficiencies.
Our customers possess a competitive need to launch new products offering increased productivity and functionality while reducing harmful environmental impacts. In addition, our customers are trying to differentiate their products from their competitors which frequently results in different or new power conversion requirements.
With the acquisitions of Comdel in September 2017 and Glassman in May 2018 we now have six design centres around the globe.
The diverse product requirements of XP Power's target market provide opportunities to enter new niches and provide flexible solutions.
We have the broadest range of standard products in our industry which are designed to be easy to modify to power the customer's specific application.
Our blue-chip customer base provides good opportunities to win additional new product programmes from multiple engineering teams across the globe. We have gained corporate approval at many blue-chip companies over the past few years. We are now capitalising on these approvals to win a larger share of the business that is available.
RF Power from the acquisition of Comdel and high voltage from the acquisition of Glassman increase our available market from US$3.1Bn to $4.8Bn.
A global population that is both increasing and ageing, coupled with increased legislation, is driving the deployment of more healthcare devices, particularly in the home. This, in combination with new technologies and treatments becoming available, makes Healthcare an excellent sector for XP Power. The customers in this area demand the ultimate quality and reliability and appreciate and value XP Power's value proposition.
We have the broadest, most up-to-date range of medically approved power converters in our industry.
Proliferation of electronic devices
Electronic devices are becoming more and more pervasive in our lives as new technologies and innovation emerges. This trend is accelerating with the adoption of the Internet of Things (IoT), Augmented Intelligence (AI) and big data. These devices drive demand for semiconductor manufacturing equipment which is a key focus area for XP Power.
We have the broadest range of standard products in our industry which are designed to be easy to modify to power the customer's specific application. Many of our products are suitable to power semiconductor manufacturing equipment.
Our industry continues to be the subject of an increasing raft of legislation from numerous countries and standard setters relating to areas such as environmental impacts, safety requirements, and above all energy efficiency. The compliance costs of keeping up with this legislation favour a company the size of XP Power, where we are large enough to be able to devote resources to this, yet agile enough to respond quickly with new products or documentation as required.
We have dedicated resources devoted to safety legislation which we are expanding.
Our products are designed into and power capital equipment and as such are subject to the capital equipment cycles. While industrial company investment in capital has been subdued over recent history due to global economic conditions, new capital investment generally leads to greater productivity. We consider that the medium and long-term opportunities remain positive for capital equipment. This is particularly the case in emerging markets as we see labour costs rising significantly.
We have the largest direct sales force in our industry together with the broadest product portfolio so are well positioned to take advantage of any recovery in the capital equipment markets.
Expansion of "green" products
Climate change and emission of greenhouse gases is becoming an increasingly significant issue as emerging countries develop and urbanise. XP Power has taken a leading role in developing ultra-efficient products which consume and waste less energy and that are suitable for use in healthcare and industrial applications.
We have developed a portfolio of XP "Green" Power products with class- leading efficiencies and have the most environmentally friendly manufacturing facility in our industry.
The opportunities for XP Power – Expanding our addressable market
The acquisitions of Comdel in September 2017 and Glassman High Voltage in May 2018 respectively bring Radio Frequency (RF) Power and high power/high voltage products to the Group. This expands our addressable market by an estimated US$1.7 billion. These new product ranges support can be sold to a number of our existing target customers in support of our strategy.