5 April 2018

GaN device market to grow at 17.1% CAGR from $711.44m in 2017 to $1842.8m in 2023

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The gallium nitride (GaN) device market is rising at a compound annual growth rate (CAGR) of 17.1% from $711.44m in 2017 to $1842.8m in 2023, according to a report by Mordor Intelligence.

Major drivers include the growing demand for radio-frequency devices in the semiconductor market, the booming consumer electronics market (particularly LED-based lighting and displays) and the proliferation of electric vehicles and photovoltaic inverters. Demand for smartphones, gaming devices, laptops and TVs will also provide modest growth potential in the consumer electronics sector. Although consumer electronics held the largest share in recent years, the maturing market for smartphones and laptops is expected to reduce the pace, paving the way for the expansion of the aerospace & defense sector.

In addition, the replacement of incandescent lamps with GaN LEDs in automobiles and the growing demand for electric vehicles are augmenting the GaN device market growth rate in the automotive sector. According to the International Energy Agency (IEA), the number of battery electric vehicles in use rose from 113,000 in 2012 to 1,209,000 in 2016.

However, the high production cost of gallium nitride compared to silicon carbide is one of the major factors that could hinder market growth, notes the report.

Growth of new industries to offer opportunities for expansion

Many chipmakers are now using GaN to make devices that support wireless electricity (WiTricity). GaN also enables chipmakers to reduce the cost of integrated circuits, driving broad adoption among semiconductor manufacturing companies. Wireless charging applications include phones, tablets, drones, laptops, industrial robots, appliances and automotive applications.

Autonomous vehicles use eGaN chips in their LiDAR systems to sense their environment. GaN chips are proven to be more accurate than silicon chips, to the scale of inches whereas silicon chips are limited to a range of 10 feet. Hence, with the increasing usage of GaN chips in new applications such as wireless charging and self-driving cars, the GaN device market is expected to grow significantly.

Consumer electronics the biggest sector

Due to growing innovation and adoption in the industry, the price of GaN technology is expected to fall, rapidly boosting adoption. Due to various advantages such as higher efficiency and higher operating frequency, many circuit boards used in day-to-day consumer electronic devices are expected to be replaced with GaN technology. GaN’s adoption is expected to revolutionize charging technologies in existing devices, specifically in wireless charging, fast charging and in laptop chargers. For example, Cambridge Electronic Inc has developed transistors for charging purposes that are about 1.5 cubic inches in volume. There are also expected to be many innovations where the charging adapter is included inside the laptop, driving the market for GaN technology in consumer electronics. Due to their operating efficiency and smaller chip size (which aids cost saving and aesthetic appeal), these devices are also being used in LED-based TV screens. Moreover, the reduction in device size, such as in an uninterruptible power supply (UPS), increases the available office space or domestic space that can be used more productively.

Asia-Pacific to see fastest growth

Other crucial factors fueling market growth include the lower labor and production costs in the Asia-Pacific region. Moreover, due to the increasing production and export of consumer electronics products from China and Japan, the Asia-Pacific is expected to hold the highest share of the GaN market by 2023. China is one of the world’s biggest EV markets, as well as the largest market for plug-ins (or new energy vehicles, NEV, as they are called in China). Also, in 2017 Tesla Motors announced plans to open its first manufacturing site outside the USA, in Shanghai. These factors are expected to increase demand for GaN in China.

Similarly, under the new government’s plans to curb pollution, India has committed to sell only electric cars by 2030. Furthermore, Maruti Suzuki (the country’s biggest car manufacturer) has teamed up with Toyota to launch its first electric car by 2019-2020. These factors are expected to increase GaN demand in India. In addition, the Indian government has announced an investment of 2.5% of its GDP in healthcare, starting from 2020 ($57bn, according to 2016’s GDP), further increasing demand for GaN semiconductors in the healthcare segment.

Key market developments

In November 2017, Osram and Continental announced plans for a joint venture for intelligent lighting solutions in the automotive sector. The JV will enable Osram and Continental to combine semiconductor-based lighting modules, advanced electronics, optics and software expertise, with access to sensor technology and innovative light sources.

In October, GaN Systems and Taiwan’s Ministry of Economic Affairs (MOEA) signed a Letter of Intent to collaborate on expanding the economic and technical benefits of GaN technology to Taiwan’s electronics companies. The collaboration is targeted at meeting the global challenges of unsustainable increases in power consumption, combating climate change, implementing cleantech technologies, and meeting green CO2-reduction initiatives.

Tags: GaN power devices

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