Handset complexities to offset GaAs price erosion
Thanks to its growing deployment in the latest cell-phone handsets, the market for GaAs-based devices will be worth more than $3 billion in 2006.
Market research company Strategy Analytics reckons that by 2010 the figure will be close to $4 billion, with cellular handsets remaining the primary market driver.
"It s not just a case of increasing handset shipments that helps to increase GaAs device demand over the next five years," said Asif Anwar, chief GaAs analyst at the company. "2006 and beyond will see the market shift towards multi-mode, multi-band architectures."
"This will actually increase the number of HBT and PHEMT die going into increasingly complex RF front-end module solutions," continued Anwar.
That trend is already apparent, with RF Micro Devices ramping up its wafer fab capacity to cope with the extra demand (see related story).
Meanwhile, substrate vendors are coming under increasing pressure to deliver the volume of semi-insulating GaAs substrates that are needed to meet that demand. Anwar expects substrate volumes to more than double over from 2005 to 2010, at which point the market is expected to be worth more than $600 million.
"We will see fab utilization for the industry approaching 100% over the next two or three years," added Anwar s colleague Steve Entwistle.
While the current strong demand for GaAs material is almost purely down to cell-phone sales, Entwistle told Compoundsemiconductor.net that the GaAs device market would be augmented by emerging applications such as automotive radar.
Believing that the right price points for the automotive market are now being approached by GaAs chip makers, Entwistle is very confident that the application will take off in a big way within the next couple of years and become a standard feature in many vehicles.
Another key application for GaAs will likely be WiMAX, adds Entwistle. Warren, NJ, chip maker Anadigics looks especially likely to benefit from the emergence of that technology as it has a very strong relationship with Intel on its Centrino Wi-Fi platform.
Intel has been heavily promoting WiMAX in the same way that it did with Wi-Fi technology previously. The parent company s venture finance wing, Intel Capital, last week invested $25 million in Pipex Wireless, a UK wireless operator that will provide broadband services in the country s biggest cities.
Pipex has now transferred its entire UK spectrum license at 3.6 GHz to its subsidiary to provide the service for long-distance Internet access.
The first metropolitan networks will be rolled out in London and Manchester next year, while Intel ultimately plans to deploy similar coverage across the globe.
If Intel s success with Wi-Fi services is replicated in WiMAX, it could add significantly to the volume of GaAs shipped in the coming years.
Strategy Analytics annual five-year outlook for the GaAs industry is now available at the company s web site.