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Strategy Analytics: GaAs Sales Will Grow, But Slow

The market research firm says 2012 gallium arsenide device revenues hit $5.3 billion with additional growth anticipated in the immediate future. On the down side, a weak demand for MBE, and particularly MOCVD grown GaAs epitaxial substrates will adversely affect the device market in the longer term




According to Strategy Analytics, a strong close to 2012 allowed the GaAs device market to eke out a small gain and post record revenue for the year. But this was accompanied by a slow GaAs substrate epitaxial growth market.

The growth in GaAs devices was primarily the result of the cellular segment, as most other segments for GaAs devices were flat or declining for the year.

The latest Strategy Analytics GaAs and Compound Semiconductor Technologies Service (GaAs) Forecast and Outlook, "GaAs Industry Forecast: 2012-2017," reports the overall GaAs device market grew by roughly 2 percent to close 2012 with slightly more than $5.3 billion of revenue.

The report also forecasts above average growth for the GaAs device market in the next two years, followed by slowing cellular demand that will pull the growth rate below historical averages. The result of these trends will be revenues slightly less than $6.1 billion in 2017.

"The GaAs market closed 2012 with strong growth and we have seen a continuation of that trend so far in 2013," notes Eric Higham, Director of the Strategy Analytics GaAs and Compound Semiconductor Technologies Service (GaAs).

"We anticipate 2013 and 2014 will see growth above historical averages as demand for cellular applications, particularly power amplifiers picks up. Unfortunately, we believe this will be short-lived as competitive technologies and new architectures combine to capture market share and slow the growth of GaAs devices," he adds.

Asif Anwar, Director in the Strategy Analytics Strategic Technologies Practice (STP) continues, "Silicon-based technologies, particularly CMOS and the trend toward multi-band power amplifiers will put a damper on the growth of GaAs device revenue."

The Strategy Analytics forecast segments the GaAs device market by application, device type, process, geography and frequency. The report also addresses results, trends and forecasts for the semi-insulating (SI) GaAs bulk substrate and SI GaAs epitaxial substrate markets that make up starting point for the GaAs device supply chain.

Strategy Analytics also reported that the GaAs epitaxial substrate market decreased in 2012. But this was the result of slow growth in the GaAs device market and increasing use of multi-band GaAs power amplifiers in cellular applications.

The firm has recently released a spreadsheet model and Forecast and Outlook report from its GaAs and Compound Semiconductor Technologies Service (GaAs) entitled "Markets for Semi-Insulating GaAs Epitaxial Substrates: 2012 - 2017".

This report estimates that total demand for semi-insulating (SI) GaAs epitaxial substrates from manufacturers such as IQE, VPEC, Kopin, RFMD, Hitachi Cable, Intelliepi and Sumitomo reached nearly 29,000 kilo square inches (ksi) in 2012, a drop of nearly 5 percent from 2011. The report forecasts that slowing demand from the GaAs device market will translate to slow growth in GaAs epitaxial substrate demand, with production reaching slightly more than 31,600 ksi by 2017.

"The decline in GaAs epitaxial substrate production hit both MBE and MOCVD structures in 2012, but not equally", notes Eric Higham, Director of the Strategy Analytics GaAs and Compound Semiconductor Technologies Service (GaAs). "After a sharp increase in 2011, MOCVD material production fell by nearly 7 percent in 2012. Our results showed that MBE production, hit hard the previous two years was more stable and fell by slightly less than one percent."

Asif Anwar, Director in the Strategy Analytics Strategic Technologies Practice (STP) adds, "The decline in MOCVD production indicates the growing trend toward multi-band power amplifiers in handset applications. We believe the small drop in MBE production indicates the bulk of the handset switch conversion to other technologies is complete, with the MBE capability now being used for other applications."

The Strategy Analytics forecast segments the Semi Insulating GaAs epitaxial substrate market by diameter, geography, epitaxial processing technique, application and supplier. The report also addresses trends and recent developments in these segment.





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