News: Markets
30 January 2024
Compound semiconductor substrate market growing at 17% CAGR to $3.3bn in 2029
The compound semiconductor substrate market is growing at a compound annual growth rate (CAGR) of 17% to $3.3bn in 2029, according to the report ‘Status of Compound Semiconductors Industry 2024’ by market analyst firm Yole Group.
Compound semiconductors have emerged as a transformative influence across various industries. The dominance of silicon carbide (SiC) in the automotive sector, especially in the domain of 800V electric vehicles (EVs), is driving a billion-dollar market. Simultaneously, gallium nitride (GaN) power electronics are expanding their presence in both the consumer and automotive fields. Yole Group analysts foresee a billion-unit opportunity in smartphone over-voltage protection (OVP). In anticipation of a resurgence, radio-frequency gallium arsenide is aligning itself with 5G and automotive connectivity, while RF GaN is establishing its presence in defense, telecoms and space industries, targeting high-power applications.
In the photonics sector, indium phosphide (InP) and gallium arsenide (GaAs) are taking the lead, with InP experiencing a resurgence fueled by artificial intelligence (AI) applications, while GaAs photonics is seeing more modest growth influenced by various market dynamics. Although micro-LEDs show potential, their widespread adoption is gradual.
“The compound semiconductor industry is at the corner to transition to larger-diameter substrates,” notes Ali Jaffal Ph.D., technology & market analyst Semiconductor Substrates & Materials, at Yole Group. “In the photonics sector, AI is driving the demand of high-data-rate lasers, which could accelerate the transition to 6” InP substrates. On the other side of the coin, GaAs explores 8” manufacturing for micro-LEDs — which is competing with organic light-emitting diodes (OLEDs) — facing yield and efficiency challenges, questioning its success but gaining momentum with substantial investments.”
Suppliers of GaAs and InP substrates, including Freiberger, Sumitomo Electric Device Innovations Inc (SEDI) and AXT, are playing a central role in the transition to larger-diameter substrates. Photonics is part of this story, and the power and RF markets further complement this narrative.
Leading the change to supply SiC substrates for power electronics applications is Wolfspeed, which has recently transitioned to larger 8” wafer fabs and is expanding its material capacity in line with its strategic vision.
Coherent, another leading player, is focusing on photonic devices and dominates the SiC substrate market for both power and RF applications. It has made a number of strategic alliances, for example with SEDI in RF GaN, to reinforce its position and has started supplying power SiC devices. Following these actions, it spans the whole value chain from substrates to advanced devices. The landscape is continuously evolving, with multiple innovations on many fronts and strategic partnerships, notes Yole.
“Compound semiconductor technologies are advancing across sectors, notably in the booming SiC industry,” says Taha Ayari Ph.D, technology & market analyst, Semiconductor Substrates & Materials. “While 6” wafers are still standard, Wolfspeed’s $1.2bn investment in MHV fab is pioneering the transition to 8″ wafer size. Other efforts focus on improving SiC wafer yield and supply, with innovations like engineered substrates from Soitec and Sumitomo Mining. Power GaN sees a shift to 8-inch GaN-on-Si, driven by expansion at Innoscience, STMicroelectronics, and Infineon Technologies,” he adds.
“RF GaN-on-Si is benefiting from synergies with the relatively more mature power GaN to enter the telecom market and compete with established RF GaN-on-SiC technology,” says Aymen Ghorbel, technology & market analyst, Semiconductor Substrates & Materials. “Additionally, major changes in the RF GaN ecosystem, such as the Wolfspeed RF business being acquired by MACOM, could impact the RF GaN industry,” he concludes.
Compound semi substrate market growing at 16% CAGR to $2.4bn by 2027
