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LED boom to push substrate sales past $1B

Analyst firm Yole Développement sees strong GaN, sapphire and GaAs substrate revenues through 2012, as compound semiconductors beat silicon in growth of total wafer areas processed.

Compound semiconductor substrates will expand the niche they occupy in the wider electronics industry as their overall market grows to reach $1 billion by 2010.

LED demand will combine with a strong RF electronics sector to drive sales up from $822 million in 2007, according to market analyst company Yole Développement.

In its March “Compound Semiconductor Materials Report”, Yole says that the total proportion of compound substrates within all semiconductors processed by wafer area grew from 0.53 percent in 2005 to 0.64 percent in 2007. The analyst company points out that lower-cost and wider-diameter substrates will help expand this segment further, to 0.84 percent by 2012.

Sapphire substrates importance to the LED market makes them prime exponents of this trend. “Sapphire is moving from 2 to 4-inch, skipping 3-inch,” explained Philip Roussel, the report's author.

Sales of sapphire substrates will increase by 20 percent year-over-year, through to 2012. “Sapphire substrates for GaN LEDs will grow their total share of the compound semiconductor market from 27 percent in 2005 to 32 percent,” Roussel said.

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Including both semiconducting and semi-insulating (SI) material the growth rate for GaAs substrate sales stands slightly lower, at 10 percent.

However, this growth rate remains impressive, starting as it does from a combined 64 percent of the overall compound substrate market in 2007. The critical mass of companies that make cellphone power amplifiers using SI GaAs help drive the market and technology advances in this area, Roussel points out.

“For semi-insulating GaAs, everything is moving to 6-inch,” he said. “The top 6 or 7 chip-making players are using 6-inch now.”

The big three bulk GaAs substrate makers each claimed around 30 percent of the available market, with Freiberger holding a slight lead over Sumitomo Electric and Hitachi Cable.

The highest overall compound annual growth rate will be seen amongst GaN substrate revenues, where Roussel anticipates 125 percent year-over year growth from their current 0.1 percent market share.

“GaN is very expensive,” Roussel pointed out, “but it helps this market, which is not very important in terms of units, to be very attractive in terms of revenues because of the price for a single wafer.”

“GaN is becoming the winning choice for blue laser diode makers.”

InP and SiC substrates will each record single digit compound annual growth through 2012, at 7 percent and 5 percent respectively.

SiC substrates for power and RF devices will actually see annual demand growth of more than 35 percent in millions of square inches over this period. However, according to Roussel, the growing number of suppliers in this segment will offset this expansion by offering increasingly cheap substrates.

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