17 July 2020
Compound semiconductor market to grow at 6.3% CAGR from $32bn to $43.4bn in 2025
The compound semiconductor market will rise at a compound annual growth rate (CAGR) of 6.3% from $32bn in 2020 to $43.4bn by 2025, according to the report ‘Compound Semiconductor Market with COVID-19 Impact Analysis by Type (GaN, GaAs, SiC, InP), Product (LED, RF Devices, Power Electronics), Application (Telecommunication, General Lighting, Automotive, Power Supply), and Geography - Global Forecast to 2025’ from MarketsandMarkets. The increasing use of compound semiconductors in LED applications has fueled the demand, notes the firm, while the growing demand and implementation of gallium nitride (GaN) and silicon carbide (SiC) in the semiconductor industry is expected to play a vital role.
The compound semiconductor market includes major tier-1 and tier-2 players like Nichia, Samsung Electronics, ams, Qorvo and Skyworks, which have manufacturing facilities spread across various countries throughout the Asia Pacific, Europe, North America and the rest of the world (RoW). Multiple facilities shut down due to the COVID-19 pandemic. The report expects that the semiconductor industry will decline significantly globally in 2020 due to COVID-19, and that this specifically translates into a snowballing effect on the compound semiconductor market. This could lead to lower research expenditure related to compound semiconductors, it notes.
GaN in LED and RF devices to hold largest market share
As it has been increasingly used in LEDs, power devices and radio-frequency (RF) devices, GaN is estimated to have the largest share of the compound semiconductor market by value. GaN LEDs are used in general lighting, consumer devices, commercial and automotive applications. Due mostly to GaN’s wide-bandgap properties (and its use to make white LEDs), LEDs comprise the largest share of the GaN market. Increasing demand for GaN LEDs in various applications (such as general lighting, signage and automobiles) is expected to drive the growth in the GaN market.
GaN is also finding importance in RF devices as they have the ability to combine high RF power output over broad bandwidths at high frequencies. As industry shifts towards the adoption of 5G networks for >6GHz frequencies, silicon will not be able to meet the various requirements of networks, as silicon devices operate well below 3GHz. At the higher frequencies used for 5G (such as 3.5GHz), GaN is more efficient than LDMOS/silicon devices. Hence GaN will gain traction for 5G applications, particularly for base-station power amplifiers, notes the report.
Telecoms the largest segment by application
Telecommunications is estimated to comprise the largest segment in the compound semiconductor market by application, with 5G providing a huge opportunity. Growth is driven mainly by increasing demand for RF devices.
Rapid advances in the telecom sector are being seen in both developed and emerging countries across the world. The technological shift from 3G to 4G/LTE and now 5G has increased network traffic through mobile devices and resulted in increased network interference across the communication channels. As industry shifts towards adoption of 5G, RF content used per smartphones is expected to increase. To meet all the requirements for 4G and 5G (including saturated and linear efficiency), it is necessary to use a power amplifier manufactured with compound semiconductor technology, which is expected to drive market growth.
APAC to emerge as largest region
By region, APAC is expected to be the largest market for compound semiconductors during the forecast period. The rapid market penetration of GaN and SiC in power devices (where they are increasingly replacing silicon counterparts) is predominant across several application segments in APAC. For power devices, the growing number of GaN and SiC power applications creates huge revenue potential in this region, it is reckoned. This is attracting several industry players to commercialize GaN and SiC power devices in mass production for several power applications which, in turn, are increasing the revenue potential of the compound semiconductor market in this region.
Major players in the compound semiconductor market are cited in the report as Nichia (Japan), Samsung Electronics (South Korea), ams (Austria), Qorvo (USA), Skyworks (USA), Cree (USA), GaN Systems (Canada), Infineon (Germany), Mitsubishi Electric (Japan), NXP (Netherlands), and ON Semiconductor (USA).