Hidden trends amid slowing GaAs epi substrate output

September 6, 2012 – GaAs epitaxial substrate production rose just 3% in 2011 as handset power amplifiers offset a shift away from GaAs for handset switches. But inside that slowing slope are two key market drivers, according to Strategy Analytics.

While GaAs epi output was slow, the actual market value surged 19% in 2011 — largely due to supply-chain disruptions and spiking prices after the March 2011 Japanese earthquake/tsunami disaster, a trend the firm emphasizes is "not sustainable." Demand for semi-insulating GaAs epi substrates reached about 30382 kilo-square inches (ksi), and just over $600M in revenues.

Within that slow 2011 growth in GaAs epi substrate production were two major trends: "MOCVD material production increased sharply, fueled by growth in HBT-based handset PAs. Nearly offsetting this growth completely was a sharp decline in production of wafers using MBE epitaxy," explains Eric Higham, director of the firm’s GaAs and compound semiconductor technologies service. Device makers have been moving away from using GaAs MBE wafers in HEMT devices for handset switching applications, but "the bulk of this technology conversion is complete and the MBE market will return to slow growth," adds Asif Anwar, director in the Strategy Analytics strategic technologies practice.

Similar trends were seen affecting the GaAs bulk substrate market too. A few weeks ago the firm calculated the GaAs bulk substrate market as ~32000 ksi in 2011 and $230M in revenues; the difference in markets reflects the added value in extra processing to create GaAs epi substrates, which enable formation of different device structures.

With disruptions in the supply chain easing, Strategy Analytics is forecasting GaAs epi substrate demand to slow to around 35,000 ksi and $544M in 2016. The market for GaAs bulk substrates is seen hitting 39,000 ksi and $240M in revenues by 2016.

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