25 August 2016

GaAs wafer market to grow at 13% CAGR through 2020

The global gallium arsenide (GaAs) wafer market will grow at a compound annual growth rate (CAGR) of nearly 13% over 2016-2020, according to a report by Technavio.

Factors contributing to growth include increasing adoption of smartphones and the need for increased network bandwidth.

Increasing adoption of smartphones

The growth in smartphone shipments from 1.4 billion units in 2015 to more than 2 billion units in 2020 will drive demand for GaAs wafers, says Technavio. Consumer demand for mobile data is increasing dramatically in many countries. Accessing mobile data in large volumes drains mobile batteries faster than usual. This has compelled mobile handset manufacturers to use efficient power amplifiers that contain GaAs content. In order to accommodate increasing demand for data (both broadband and mobile data) and ensure proper quality of service, network operators are developing sophisticated wired and wireless networks, architecture, and devices. This will increase the demand for GaAs wafers for network infrastructure. The increase in mobile data consumption also indicates a rise in the number of mobile handsets containing GaAs content.

Some smartphone vendors such as Kyocera are focusing on the manufacture of solar-powered smartphones. "GaAs is considered to be the most efficient semiconductor for the production of solar energy," says Asif Gani, lead analyst at Technavio for semiconductor equipment research. "GaAs-based solar cells offer an extended battery life for smartphones," he adds. "GaAs-based solar cells can convert 30-35% of energy from light into electricity, and they are lightweight as well. As a result, the production of smartphones powered by GaAs-based solar cells will influence the market in a positive way."

Need for increased network bandwidth

The growth in internet bandwidth is fueled by two factors: the proliferation of mobile computing devices with advanced capabilities (such as smartphones, tablets, and wearables) and the emergence of disruptive technologies that shift the bandwidth usage by altering the way users access the network.

With the emergence of new mobile telecom standards such as 4G and 5G, consumers are now opting for higher-bandwidth applications and services. Mobile data traffic is increasing due to factors such as high demand for bandwidth-based services and applications and growing market for handheld devices. At present, 2G and 3G networks account for a large share of mobile data traffic globally. By 2019, the share is likely to decline to less than one-third of all mobile data traffic due to the uptake of 4G (which is about ten times faster than 3G). In addition, the trend of individuals using their handheld devices to access high-quality digital content on the internet is increasing.

Large enterprises and IT professionals are adopting cloud storage, increasing the usage of cloud services such as Microsoft Office 365, Google Apps, and SAP. This results in greater bandwidth demand and network requirements. Technavio forecasts a 500% increase in bandwidth demand due to the growing adoption of cloud services during 2016-2020.

"The emergence of next-generation connected devices, along with the rise in the use of cloud services, will compel vendors to increase the GaAs content in smartphones, pushing the market's growth during the forecast period," concludes Gani.

Key players

Key vendors in the global GaAs wafer market are listed as Advanced Wireless Semiconductor Company (AWSC), Global Communication Semiconductors (GCS) and WIN Semiconductors. Other prominent vendors analyzed in the report are AXT, Century Epitech, Freiberger Compound Materials (FCM), Intelligent Epitaxy Technology (IntelliEPI), IQE, OMMIC, Powerway Advanced Material (PWAM), Qorvo, Sumitomo Electric Semiconductor Materials, UMS, and Visual Photonics Epitaxy (VPEC).

Tags: GaAs substrates GaAs epitaxial wafers

Visit: www.technavio.com/report/