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US to ring up $1.1 billion crystal bill by 2011

Continued strength in US GaAs wireless manufacturing will help the domestic industrial crystals market to grow at an annual rate of six percent over the next four years, according to a new analyst report.

The annual US industrial crystal market, including compound semiconductor materials, will grow six percent each year and surpass $1.1 billion over the next four years.

That s according to Cleveland, Ohio, based market analyst Freedonia.

The year-on-year growth will be relatively uniform across all types of material, with compound semiconductor materials growing by 7 percent, says the report's author, Ned Zimmerman.

Sales to the security and defense market will grow fastest, and Zimmerman says that these will be shared evenly between compound semiconductors and other materials, such as quartz.

The largest overall gains will occur in crystals feeding into the communications industry.

InP sales for advanced fiber-optic systems will benefit, for example, as the ever-increasing demand for bandwidth brings deployment of FTTx systems and backbone upgrades.

GaAs gains, sapphire suffers, germanium grows
Zimmerman s report predicts the overall market for substrates will grow from its 2006 level of $220 million to $305 million by 2011.

Within the substrate sector, GaAs companies will cash in on the ongoing strength of the wireless market.

“For substrates, the fastest growth will be in GaAs, in part because there's a lot of power amplifier production still going on in the US, but whether that will still be the case beyond 2011, I don't know,” Zimmerman warned.

One exception to the generally positive outlook for material producers will be the US sapphire market, which is likely to shrink despite higher volumes compensating for downward price pressure.

“Sapphire substrates will experience healthy growth outside the US as it is increasingly used by Japanese and Taiwainese companies,” said Zimmerman, “but SiC is more popular in Europe and the US.”

GaN was essentially excluded from this report, which does not consider epitaxially grown materials, due to the lack of widely deployed GaN substrates.

“Germanium will likely do really well because of the demand for solar cells,” said Zimmerman. “There's a large push to get compound semiconductor materials into these devices, especially on a terrestrial basis, and we anticipate that market will expand significantly.”

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