Optimism Returns To CS Mantech
The Vancouver sunshine that greeted delegates at this year s CS Mantech was only part of the reason for all the smiling faces. A feel-good factor had also returned, as the effects of rising handset sales and an increase in the average GaAs content per phone had filtered through to all points in the supply chain.
This positive outlook was particularly evident at the conference s exhibition, where many company representatives talked about the improving business climate. Signs of the good times included strong growth in sales of 6 inch semi-insulating substrates at Hitachi Cable, and plans for capacity expansion at microelectronic epiwafer suppliers Visual Photonics Epitaxy and Picogiga. The upbeat mood had even extended to equipment suppliers, with Aixtron hoping that the sale of two of its multi-wafer MOCVD reactors to Kopin will signal the return of significant sales to RF chipmakers.
A global perspective on this boom was provided by Asif Anwar, director of Strategy Analytics GaAs and compound semiconductor technologies service, during a presentation at CS Vision, a co-located one-day meeting. According to Anwar the worldwide GaAs microelectronic device market, which is dominated by handset components, grew from $2.6 billion in 2004 to $2.8 billion in 2005, and will exceed $3 billion this year. This surge has even surprised Anwar, who did not expect the strong growth in the handset-replacement market in Europe, America and Korea that has been led by Motorola s RAZR range of mobile phones.
Anwar says that the increased chip production has also driven strong growth in GaAs semi-insulating substrate sales, and fab utilization among the crystal growers has reached an average of 80%. Revenue from this business is expected to hit $600 million this year and $863 million in 2010. According to Anwar, 6 inch material is the "incumbent standard" enjoying two-thirds of the market, with recent gains arising from RFMD s switch from 4 to 6 inch material. This size will remain the most popular choice for production, says Anwar, as the bad memories associated with the 2001 downturn will hamper development of 8 inch wafers.
Global sales of GaAs microelectronic epiwafers are also on an upward curve. In 2004 the sector generated $200 million, last year the figure was $261 million, and throughout the remainder of the decade near double-digit annual growth is expected. The merchant market continues to be dominated by companies deploying MOCVD growth, says Anwar, while MBE is used by nearly all of the players in the captive market.
In Anwar s opinion, the surge in sales of GaAs substrates, epiwafers and microelectronic components is mainly due to a move towards 3G handsets. "3G is marvelous. It was supposed to be a unifying format, but it isn t and what we ve got are multimode, multi-band requirements that can t be met with silicon." Migration towards handsets featuring five or even six bands will further increase the GaAs content in phones that is already worth 31% of the total component cost. This increase in radio content will deliver a further blessing for GaAs chip manufacturers, as increasingly complex switches are needed to cater for all these bands. In the past these switches were built with silicon, but now companies such as RFMD and Skyworks are building these components using GaAs PHEMT technology.
Anwar reiterated his positive outlook for the GaAs microelectronic industry at the CS Mantech panel session that discussed the threat that compound semiconductor technology faces from silicon. During this discussion he claimed that by 2010 GaAs will account for 90% of the semiconductor content in mobile phones, thanks to a need for components operating at higher frequencies and data rates for the delivery of emerging services such as mobile TV.
The WLAN battleground
Anwar believes that the move towards higher-frequency, dual-band wireless LANs will also play into the hands of the compound semiconductor market, and he expects the power amplifiers in these modules to be dominated by GaAs-based components by 2010.
However, at the lower frequencies such as 2.4 GHz Anwar believes that silicon-based technology will continue to hold the largest share of the market. Freescale s engineering manager of compound semiconductor products Monte Miller agrees, claiming that silicon LDMOS technology is better than its rivals at fulfilling the needs of customers who want low-cost, best-in-class performance, reliability and product consistency. He says that the high-frequency performance of silicon LDMOS is also improving, with gain increases in the 4-6 GHz regime, and at Mantech he warned GaAs manufacturers viewing those frequencies as their territory against complacency. However, he added: "Compounds have the advantage that they can do it today."
Miller believes that the biggest challenge facing GaAs and GaN devices are high costs. "Which markets will drive GaN epi costs down?" he asked, before questioning the long-term reliability of this technology. He cannot see GaN ever competing for market share, claiming that "silicon is almost free by comparison".
As expected, this view was not shared by Nitronex s integration engineering manager Allen Hanson, whose GaN-on-silicon products are already being shipped into the 3.5 GHz market. "We feel that the process is in a fair state of maturity," said Hanson, who gives the large number of wafers shipped as one reason for the firm s success: it has about 1500 wafer starts per year.
The panel also discussed WiMAX, which Anwar sees as a complementary technology suiting customers unable to receive data via cable or ASDL. Miller expects the market to take off soon; Freescale was surprised by the number of customers in late 2005 that were buying high-power GaAs components for this protocol.
This was further good news for many at the conference. After years of discussing the pros and cons of the foundry model, they felt they had every right to smile now that sales of GaAs substrates, epiwafers and chips were all on the up.