Digital Isolator Market Research Report and Outlook by 2028

The digital isolators market is projected to expand from US$ 2,537.53 million in 2022 to US$ 4,133.11 million by 2028, reflecting a compound annual growth rate (CAGR) of 8.5% during this period.

The production of electric vehicles (EVs) incorporates numerous electronic components, among which digital isolators play a crucial role in battery management systems, isolated Fieldbus, inverters, and chargers. The increasing global fleet of electric vehicles is anticipated to create new opportunities for digital isolators market participants throughout the forecast period. The delivery rates of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) are experiencing rapid growth, with double-digit year-on-year increases across various regions. According to the International Council on Clean Transportation (ICCT), approximately 4.3 million BEVs and PHEVs were delivered worldwide in the first half of 2022, marking a 62% increase compared to the same period in 2021. Notably, China dominated the global electric vehicle market, with deliveries rising from around 1.15 million in H1 2021 to approximately 2.45 million in H1 2022. This surge in electric vehicle production signifies a heightened demand for battery management systems, inverters, and chargers, which in turn is expected to drive the adoption of digital isolators within the electric vehicle sector. The growth of the automotive industry is likely to positively influence the expansion of the digital isolators market.

To gain a competitive edge, several vendors in the digital isolators market are implementing various organic and inorganic strategies. For example, in 2022, Mornsun Guangzhou Science & Technology Co Ltd announced a distribution agreement with Avnet Abacus, aimed at enhancing the company's presence in the EMEA region.

Effects of the COVID-19 Pandemic on the Growth of the Digital Isolators Market in North America

The well-established infrastructure supporting high-speed internet services has significantly contributed to the widespread adoption of smart devices in North America. However, during the fiscal years 2020-2021, many manufacturing facilities in North American countries were closed due to COVID-19 restrictions and disruptions in the semiconductor supply chain. This semiconductor chip shortage in the US and Canada resulted in a slowdown in the digital isolators market. Consumer spending on electronic devices decreased during the pandemic, while the demand for factory automation solutions rose as businesses sought innovative methods to reduce manual operations. Nonetheless, a significant portion of this demand remained unmet due to the supply chain disruptions and operational limitations faced by semiconductor manufacturers. Despite the global crisis, the digital isolators market began to regain momentum in late 2020 as the demand for electronics remained steady.

The digital isolators market in North America is divided into segments including the US, Canada, and Mexico. In 2021, the US held the largest market share for digital isolators, while Canada is expected to exhibit the highest CAGR during the forecast period. Automotive manufacturers in North America are actively working to increase their electric vehicle sales. As vehicle designs increasingly shift towards electrification, high-wattage power electronics have become essential components in the drivetrain and battery systems. These high-wattage electronics require communication and control through digital controllers, necessitating digital isolation. Isolators are integrated into modules such as onboard chargers (OBCs), battery management systems (BMS), DC-DC converters, traction inverters, and heating/cooling units in electric vehicles. Additionally, advancements in medical imaging devices are driving the demand for digital isolators, as these devices transmit large volumes of video imaging data from sensors to processors while ensuring high levels of electrical isolation. Consequently, the growing electrification of vehicles, advancements in medical imaging technology, and heightened safety standards in industrial automation are key factors propelling the growth of the digital isolators market in North America.

The demand for battery management systems in electric vehicles is underscored by the significant sales of electric vehicles in the US. EV sales in the US surged by approximately 200% from Q2 2020 to Q2 2021, with an overall increase of 3.6%. The electric vehicle market in the US has expanded from a few thousand vehicles sold annually in 2010 to over 315,000 vehicles sold between 2018 and 2020. In addition to the growth opportunities presented by the electric vehicle sector, the substantial presence of major digital isolator manufacturers in the US supports market growth. Companies such as Analog Devices, Inc.; Broadcom; Texas Instruments Incorporated; Vicor Corporation; onsemi; and NVE Corporation are engaged in strategic initiatives, including product launches and partnerships, which positively influence the digital isolators market.

Prominent players in the digital isolators market include Analog Devices Inc, Broadcom Inc, Infineon Technologies AG, Skyworks Solutions Inc, Nexperia BV, Texas Instruments Inc, Vicor Corp, On Semiconductor Corp, NVE Corp, and Mornsun Guangzhou Science & Technology Co Ltd.

The overall digital isolators market analysis has been derived from both primary and secondary sources. The market analysis commenced with extensive secondary research utilizing both internal and external sources to gather qualitative and quantitative data. This process also aimed to provide an overview and forecast of the digital isolators market growth across all segments. Furthermore, multiple primary interviews with industry participants and experts were conducted to validate the data and gain deeper analytical insights. Participants included industry professionals such as VPs, business development managers, market intelligence managers, national sales managers, and external consultants specializing in the digital isolators market.