After a banner year in 2010 and a fast start to 2011, GaAs device revenue growth has slowed and we estimate it closed 2011 at 6%, right around the historical average. The GaAs and Compound Semiconductor Technologies Service (GaAs) Insight, “ 2011 GaAs Device Revenue Flaters after Strong Start" explores the drivers behind the 2011 GaAs device revenue performance. GaAs devices enable a variety of wireline and wireless networks, but no market segment is more essential to the overall GaAs revenue than mobile handsets. As mobile data consumption continues to skyrocket, operators are trying to keep pace by acquiring more spectrum and making mobile devices more sophisticated to use existing spectrum more efficiently. The result is a new generation of feature phones and smartphones that are multi-band and multi-standard to accommodate the new spectrum allocation and increase the geographical footprint of the handset. This, coupled with more sophisticated modulation schemes is increasing the GaAs content for the higher-tier mobile handsets.

Our Wireless Device Strategies Service estimates smartphone sales grew by an average of more than 68% in 2010 and 2011. With this growth, it is understandable that GaAs device revenue surpassed $5 billion for the first time in 2010. Even though the smartphone growth rate was similar in 2011, the overall number mased two different trends throughout the year. The first half of 2011 saw growth well in excess of 80%, while growth in the second half fell to 40%. GaAs revenue growth followed this trend by growing strongly in the first part of 2011 before falling off as the year progressed. The insight looks at our projections for smartphone growth and how we expect this growth to decline over time to eventually approach the growth of the overall handset market.

Even though we are still predicting handset growth and continued use of GaAs in a wide variety of market applications, it appears the market is likely to revert to historical averages as we go forward. This insight summarizes revenue performance of a representative set of GaAs wafer and device manufacturers for 2010 and 2011 and finds some signs of revenue slowdown in the supply chain. It also discusses trends and drivers for the overall GaAs device industry and forecasts potential trouble spots to be monitored through 2012. 

Eric

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The latest GaAs Optoelectrponics Industry Viewpoint, entitled "Compound Semiconductor Industry Review July-September 2011: Optoelectronics,” summarizes financial, product, contract and employment announcements from major optoelectronic material, device and equipment suppliers. These announcements are categorized as material and equipment, laser, LED and compound photovoltaic activity. During this quarter, the financial results for companies in the overall optolectronics segment were generally positive, with the majority of companies reporting quarterly revenue increases. There was a potential storm cloud on the horizon as leading equipment manufacturer Aixtron lowered revenue expectations for the year (2011) by 25%. When a leading equipment manufacturer in the very front end of the supply chain revises revenue and backlog expectations substantially downward, the entire segment takes notice. While mid- to long-term prospects for the LED market remain positive, continuing economic turmoil and rapidly dropping prices have manufacturers in the LED supply chain on edge.

Development activities across the entire sector continue to be strong. In the LED segment, blue LEDs appear to be in high demand. AIXTRON announced orders (despite the revenue warning) from several companies for equipment to be used in the manufacture of blue LEDs and Avago, Osram, Cree, Bridgelux and EpiLEDs all made product announcements of new blue LEDs. In the optical transport market, component developments targeted 10Gbps and above, while system developments also targeted data rates of 32Gbps and above. In this area,  Neophotonics announced 10Gbps transceiver modules for GPON applications and a 40Gbps transceiver for 10km single fiber applications. GigOptix, Finisar, Oclaro and Mitsubishi Electric all demonstrated 40Gbps modules, with Oclaro announcing a 100Gbps receiver.

The photovoltaic segment also saw a lot of development activity with the US government continuing to jump-start alternative energy initiatives. The US DoE announced $4.5 billion of conditional loan guarantees to support three alternating-current CdTe thin-film PV generation facilities that will total more than 1.3GW of capability. They also announced round 8 of funding opportunities for solid-state lighting technology and a $197 million loan guarantee for facilities that will produce about 400MW of flexible CIGS modules each year. The approach seems to be working, as several activities previously linked to DoE loans made announcements in this quarter. These plants target more than 560MW of solar energy output.

Eric

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