Interview
GaAs device market bucks industry trends
As Strategic Analytics reports record revenues for the GaAs device market in 2011, Compound Semiconductor talks to company director Eric Higham to find out more.
Resilient is the word Eric Higham, director of Strategy Analytics, Massachusetts, uses to describe the GaAs device market. Despite the obvious uncertainties in the global economy, the market posted record revenues of more than $5.2 billion in 2011, and grew by 6 percent.
These unprecedented growth rates will not continue indefinitely, but still Higham is certain the industry will remain buoyant, maintaining a relatively healthy 3 percent growth in 2012 and beyond. So why is this market so buoyant as others struggle?
The answer lies largely in the world's insatiable demand for data. Data consumption, via mobile phones, is growing strongly across wireless networks, which spells good news for manufacturers of GaAs devices. As Higham highlights, some 50 percent of this market can be attributed to handsets, specifically power amplifiers. And this significant market slice looks set to grow.
“Today's handset market is tending towards fuller-feature phones and smartphones,” he says. “These handsets need many frequency bands and many features including bluetooth and WiFi radio. This has driven the big growth in GaAs devices, and as the entire market continues to move to more complex feature phones, the GaAs content in phones will increase.”
Importantly, consumers are replacing their handsets more and more often. “We're all so enamoured with iPhones, the handset is almost a disposable item these days,” he says. “The replacement cycle is starting to approach twelve months.”
Smartphones from companies such as Apple, Samsung and Rim are driving growth in the GaAs device market. Credit: Apple
And crucially, the mobile handset is fast becoming a 'must-have' item. According to Higham, recent studies suggest that while feature phone market growth is slowing - hence the drop in GaAs device market growth from 5 to 3 percent - even a cash-strapped consumer will still spend money on a phone. “Your handset will be way down on the list of things you have to give up if your economic situation worsens,” he says.
Clearly these factors are all helping to steady GaAs device markets. From the start, GaAs has been a performance-driven technology, offering higher frequency, output power and linearity in handsets, compared to other compound semiconductors and silicon alternatives.
And more recently, WiFi markets have shown revived interest in GaAs devices following demanding standards that include ever-growing power efficiency and multi-gigabit speeds. But will the technology's bubble burst?
The technology is still seeing stiff competition from GaN, SiGe, LDMOS and CMOS. Both GaN and LDMOS are used in power amplifiers for base stations while SiGe devices have made it into LNA applications. What's more CMOS power amplifiers, already found in entry-level phones, are now making in-roads to smartphones; US-based Javelin Semiconductor revealed just last month that Samsung has selected its CMOS 3G power amplifier for an android-based smartphone.
Javelin Semiconductor supplies power amplifiers to Samsung for its Galaxy S Duos. Credit: Javelin Semiconductor
“These companies are now talking about 3G and 4 compatible power amplifers,” says Higham. “As handsets become more sophisticated with the number of frequency bands increasing, GaAs is still the most able technology... although CMOS along with the new linearisation techniques out on the market could be a formidable foe for GaAs.”
Industry players will have to wait and see exactly how the market evolves, but in the meantime, strong GaAs device sales are having a positive effect on GaAs bulk and epitaxial substrate markets. As Higham puts it, these markets will not see explosive growth, but he predicts growth will range from between 3 and 5 percent.
But, sure and steady growth aside, Higham still believes economic uncertainty could dampen spending enough to keep growth below historical averages, at least for the next few years. Yes, handset sales are predicted to remain relatively solid, but economic uncertainties could make life difficult for operators, struggling to get the necessary investment to expand networks.
“The economy is the wildcard,” he says. “It doesn't need to be how it was, but if it just becomes clearer that we're not going to pick up the paper tomorrow and hear about another country in Europe, or elsewhere, weighing down the global economy, then money will come off the sidelines and help with the network expansions.”
These unprecedented growth rates will not continue indefinitely, but still Higham is certain the industry will remain buoyant, maintaining a relatively healthy 3 percent growth in 2012 and beyond. So why is this market so buoyant as others struggle?
The answer lies largely in the world's insatiable demand for data. Data consumption, via mobile phones, is growing strongly across wireless networks, which spells good news for manufacturers of GaAs devices. As Higham highlights, some 50 percent of this market can be attributed to handsets, specifically power amplifiers. And this significant market slice looks set to grow.
“Today's handset market is tending towards fuller-feature phones and smartphones,” he says. “These handsets need many frequency bands and many features including bluetooth and WiFi radio. This has driven the big growth in GaAs devices, and as the entire market continues to move to more complex feature phones, the GaAs content in phones will increase.”
Importantly, consumers are replacing their handsets more and more often. “We're all so enamoured with iPhones, the handset is almost a disposable item these days,” he says. “The replacement cycle is starting to approach twelve months.”
Smartphones from companies such as Apple, Samsung and Rim are driving growth in the GaAs device market. Credit: Apple
And crucially, the mobile handset is fast becoming a 'must-have' item. According to Higham, recent studies suggest that while feature phone market growth is slowing - hence the drop in GaAs device market growth from 5 to 3 percent - even a cash-strapped consumer will still spend money on a phone. “Your handset will be way down on the list of things you have to give up if your economic situation worsens,” he says.
Clearly these factors are all helping to steady GaAs device markets. From the start, GaAs has been a performance-driven technology, offering higher frequency, output power and linearity in handsets, compared to other compound semiconductors and silicon alternatives.
And more recently, WiFi markets have shown revived interest in GaAs devices following demanding standards that include ever-growing power efficiency and multi-gigabit speeds. But will the technology's bubble burst?
The technology is still seeing stiff competition from GaN, SiGe, LDMOS and CMOS. Both GaN and LDMOS are used in power amplifiers for base stations while SiGe devices have made it into LNA applications. What's more CMOS power amplifiers, already found in entry-level phones, are now making in-roads to smartphones; US-based Javelin Semiconductor revealed just last month that Samsung has selected its CMOS 3G power amplifier for an android-based smartphone.
Javelin Semiconductor supplies power amplifiers to Samsung for its Galaxy S Duos. Credit: Javelin Semiconductor
“These companies are now talking about 3G and 4 compatible power amplifers,” says Higham. “As handsets become more sophisticated with the number of frequency bands increasing, GaAs is still the most able technology... although CMOS along with the new linearisation techniques out on the market could be a formidable foe for GaAs.”
Industry players will have to wait and see exactly how the market evolves, but in the meantime, strong GaAs device sales are having a positive effect on GaAs bulk and epitaxial substrate markets. As Higham puts it, these markets will not see explosive growth, but he predicts growth will range from between 3 and 5 percent.
But, sure and steady growth aside, Higham still believes economic uncertainty could dampen spending enough to keep growth below historical averages, at least for the next few years. Yes, handset sales are predicted to remain relatively solid, but economic uncertainties could make life difficult for operators, struggling to get the necessary investment to expand networks.
“The economy is the wildcard,” he says. “It doesn't need to be how it was, but if it just becomes clearer that we're not going to pick up the paper tomorrow and hear about another country in Europe, or elsewhere, weighing down the global economy, then money will come off the sidelines and help with the network expansions.”
