GaAs industry growth to slow to 1% in 2005
The GaAs microelectronics industry will slow to a crawl in 2005, claims a leading market analyst.
According to Asif Anwar, the director of Strategy Analytics GaAs service, year-on-year revenue growth will fall to 1% at most between 2004 and 2005, compared with to an increase of 7% last year. Sales are then expected to accelerate during 2006 and 2007, before tailing off again towards 2009.
The predicted fall in growth in 2005 reflects the fluctuations in the cell phone market, which currently accounts for 52% of sales of GaAs microelectronic components. Strategy Analytics expects handset shipments to increase by only 6-7% this year, far less than the 25-26% growth experienced between 2003 and 2004.
"The saving grace is that as you move towards 3G you move towards multi-band, multi-mode handsets," added Anwar. "Whilst price per band may be much less than a dollar now, when you have three or four bands in a cell phone, you can bump that price up around two dollars."
Anwar also thinks that application areas such as WLAN and automotive radar will provide further opportunities for the GaAs industry. However, he doesn't expect these emerging markets to grow sufficiently to free the GaAs industry from its cellular handset dependency by 2009.
