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24 July 2007


Demand grows for SI GaAs bulk substrates

According to a report from the market research firm Strategy Analytics, the overall market for semi-insulating (SI) GaAs bulk substrates is forecast to grow at a compound annual average growth rate of 6% through to 2011.

Entitled “Markets for Semi-insulating GaAs Substrates: 2006-2011”, the report adds that demand for SI GaAs bulk substrates increased by 29% year-on-year in 2006. Last year, Freiberger Compound Materials saw year-on-year growth of around 41%, and took the number one position from Sumitomo Electric Industries.

“With major GaAs fabs running at full capacity throughout the industry, the GaAs bulk substrate suppliers were in a strong position in 2006,” said Asif Anwar, director of Strategy Analytics’ GaAs service. “However, the strong demand has also increased raw material costs. We estimate that Gallium costs have risen by almost 120 percent over the past two years.”

Demand for SI GaAs bulk substrates will be driven primarily by increasing GaAs content in handsets and Wi-Fi radios, with millimeter-wave, CATV, DBS and fiber-optic markets also contributing, says the report.

On a cautionary note, Strategy Analytics adds that raw material costs will continue to rise and put pressure on bulk substrate supplier profitability. Furthermore, process technology trends will also impact on market growth.

“Overall demand will be counterbalanced by process technology trends toward integration and smaller die sizes which, at first glance, is a negative for bulk substrate suppliers,” said Stephen Entwistle, VP of the Strategy Analytics Strategic Technologies Practice. “Ultimately however, these trends will ensure that GaAs device manufacturers offer added value to their end-customers, securing future demand for GaAs substrates”

See related items:

GaAs device market set to grow by 76% over next five years, driven by cellular handset and Wi-Fi demand

Survey ranks Asia GaAs epi suppliers highest; Hitachi Cable overtakes FCM for substrates

Analysts forecast market growth for SI GaAs bulk substrates