RF component market to rocket to $4.7 billion in 2016
The radio-front end is a key component in every cell phone, from low cost GSM handset to multi-mode multi-band LTE smartphones. The market is very fragmented in terms of architecture, however there are a few types of components that are key. Filters or duplexers, power amplifiers (PAs) and antenna switches are at the heart of every cell phone radio. Most antenna switches and PAs currently incorporate III-V compound semiconductors and many employ GaAs pHEMT and to a lesser extent, GaN technologies. Laurent Robin, Activity Leader, Yole Développement, says that the three key components represented a $3.6 billion market in 2011 and are currently growing at a 5.6% annual rate, expected until 2016. The market research firm's new report, “RF filters, PAs, Antenna Switches & Tunability for Cellular Handsets,” highlights that as this market becomes increasingly attractive, major technical evolutions and changes are occurring in the competitive landscape for those categories of devices. Filters and duplexers are the most dynamic market. Driven by duplexers which are growing at a 10.5% rate annually, this market will reach $1.7 billion in 2016. Indeed smartphones are widely using WCDMA bands and LTE is a new strong driver. Depending on each band, SAW or BAW developments are candidates for further growth. While Epcos and Murata dominate the SAW area, Yole has seen fierce competition between Avago and TriQuint in the BAW segment. Power amplifiers are another strategic component in the RF part. Although this market is maturing, Yole Développement analysts still see many new technologies which are impacting the PA market. One current trend is that more integrated PAs and broadband PAs are increasingly being accepted on a commercial level. GaAs is still dominating the PA market by far but is poised to lose market share as demand for CMOS PAs is growing, What's more, another competitor is SOI technology, which could be used for PAs in the near future. There is thus still room for many changes in the competitive landscape dominated by Skyworks, with RFMD, TriQuint, Avago and Murata / Renesas as challengers. Also, as antenna switches become more mature, Yole Développement anticipates evolutions in two directions. Firstly, the team sees a move towards higher performance in the new LTE bands and increasing number of throws. This is where Peregrine Semiconductor has a leading position. Secondly, they see massive adoption of SOI technology, which they have observed has become more and more poular since 2010. All the big players are now involved in this technology, which offers a good price/performance ratio. GaAs switches are thus decreasing, although some players still release products with exceptional performances, such as Sony. At the same time, new technologies are coming closer to production, as has been seen with MEMS. Tuneability and changes in architecture Tuneability is a new hot topic for radio front end modules. Indeed, after years of development, antenna tuners have been widely accepted since 2011. Apart from GaAs switches, ferroelectric capacitors and MEMS variable capacitors have been successfully integrated into flagship products such as some Samsung Galaxy S2 smartphones. While there is no consensus yet on this topic, antenna tuners are now providing a very significant value proposition. Yole expects it to be the next very hot market in this area. New types of tuners and massive deployment of LTE within 2014 will be additional drivers for tuneability. Leading the MEMS field, Wispry will be a key player to watch, while Sony and Peregrine also offer promising approaches based on alternative technologies. The acquisition of Paratek by RIM in March 2012 is also a sign that antenna tuners will be a strategic technology to be integrated in many cellphone platforms in the near future. All those changes at the component level (PA, ASM, filters, and so on) and the rise of tuneability are having a dramatic impact in the global RF part architecture evolutions. Both technical and competitive challenges and opportunities are shaping the architecture of future front end modules. Similarly, the trend for integration in various types of modules is driving changes at the individual component level. New packaging technologies now enable compact multi-chip packages: Rx modules, PA modules, multi-duplexers. In total, the front-end modules were already a $2 billion market in 2011 and grew 12% annually. This represents more than three times the revenues of standalone PAs, filters/duplexers and tuners predicted for 2016. Rapid evolution of technology and competitive landscape While the analysts’ team starts to see some level of consolidation, the competitive landscape in this RF market is changing quickly. Some companies are concentrating more on vertical integration, such as Murata. Since its acquisition of Renesas' PA business, this may translate into a change in the business model of the company. As highlighted in the report, there are today a limited number of companies which dominate this RF space, but generally those players are involved in very specific market space, this meaning that significant developments can be expected in the near future. For instance, Skyworks is leading the PA market and is big in switches but has no activity in filters. Avago, on the other hand, is a large PA vendor and dominates the BAW filter market, but is neither involved in SAW filters nor in antenna switches. The evolution of architecture towards modules is one driver that pushes each company to enable itself to handle all types of components or to set up specific partnerships. Another driver for competitive change is the speed of technical advancements in this area. At the antenna switch level, players with early involvement in SOI switches, like Skyworks and RFMD are gaining market shares over players involved in GaAs, such as TriQuint. Yole expects this type of change to also be observed in PA technology.