1 April 2013

GaAs device revenue grew 2% to record $5.3bn in 2012

In a recent blog in mid-March, Eric Higham of market research firm Strategy Analytics noted that gallium arsenide device revenue closed 2012 at a new record of just over $5.3bn, albeit up by just under 2% on 2011. The small gain was driven by a strong fourth-quarter performance from the industry after a sub-par third quarter almost erased the gains for the entire year.

With the exception of 2009, when the global economy took a sharp dip and the GaAs market fought back to breakeven, the growth rate in 2012 was the lowest since the GaAs device market began a steady rise in 2004.

Handsets and smartphones, in particular, remain the driving force behind GaAs device revenue growth, says Higham. Due to their increasing GaAs device content, the growth of smartphones helped propel the handset segment to more than 50% of the entire GaAs device market. Unsurprisingly, the companies associated with handset devices remain the revenue leaders. Skyworks Solutions again saw its revenue grow faster than the market, and it remains the largest GaAs device maker, stretching its lead over TriQuint. Regarding pure-play foundry, Taiwan’s WIN Semiconductors continues its impressive growth trajectory and has become the dominant firm in this segment.

Strategy Analytics says it expects a good uptick in cellular terminal shipments in 2013, along with smartphones continuing to capture market share. This will propel GaAs device revenue growth in 2013 to 8-10%, Higham believes, adding that there are signs that this growth is taking root.

However, even with above-average growth looking likely in 2013, all is not rosy for the GaAs device market long-term, reckons Higham.

The first threat to growth comes from within. The dizzying number of LTE bands, coupled with a desire for the ‘world-phone’ has given rise to the multi-mode, multi-band power amplifier (MM-MB PA). This has some serious repercussions, because this market is so price sensitive that it will not tolerate bigger and more costly parts, says Higham. So, these MM-MB PAs must be smaller and cheaper than the PAs they replace otherwise it won’t make sense to use them. We have already seen substantial design and design-in activity, so these devices are beginning to see commercial traction, notes Higham.

The other, serious threat was unveiled at the 2013 Mobile World Congress (MWC) in Barcelona, Spain at the end of February. Qualcomm fired the first shot across the bow with the pre-conference announcement of its RF360 family of devices, described as a complete, all-encompassing CMOS RF front-end subsystem, consisting of an antenna tuning IC, an envelope tracking (ET) IC for Qualcomm’s PA, and a MM-MB CMOS PA fabricated using a silicon-on-insulator (SOI) substrate. This announcement sent GaAs PA makers’ share prices plummeting. Then at MWC, a host of companies announced their ET development efforts aimed at CMOS-based PAs in LTE handset applications.

These events and particularly CMOS developments will influence the growth trajectory for GaAs devices in the next several years and hence merit close attention, says Higham, who is hosting the panel session ‘The Death of GaAs (?)’ on 6 June at the IEEE MTT-S International Microwave Symposium (IMS2013) in Seattle, WA, USA, and is presenting an overview of the 2012 GaAs market at the 2013 International Conference on Compound Semiconductor Manufacturing Technology (CS MANTECH) in New Orleans, LA, USA (13–16 May).

Tags: Strategy Analytics

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