I recently attended CS MANTECH in New Orleans and GaN was the favorite topic of the presenters. Nearly 50% of the presentations and posters at the conference mentioned GaN in the title. Now, GaN is not a new topic, but it’s been interesting to watch as the interest level increases down the supply chain, from the equipment manufacturers to the device manufacturers to the material and manufacturing equipment manufacturers. It’s been fun to watch, it’s like realizing that someone who has been close to you for a long time has suddenly assumed a much more important relationship.

Befitting a manufacturing conference, many of the GaN presentations addressed improving manufacturing readiness and making GaN devices more producible. We also heard reports of process and reliability improvements. A couple of things were abundantly clear from the presentations: government funding and collaboration between the public and private sector is still a driving force behind GaN developments and most of the development activity in the RF sector is for GaN-on-silicon devices.

This makes perfect sense as GaN technology tries to complete the transition from “great potential” to a proven, commercially viable technology with widespread adoption. GaN has been the “next big thing” for a long time but for a variety of reasons, devices have not gotten much traction outside of military applications. From the presentations I saw, this portion of the supply chain is hard at work to remove concerns about GaN manufacturing, reliability and repeatability.

I have just updated my GaN forecast and it can be found on our website: GaN Microelectronics Market Update 2012-2017. I found a market that is still driven by aerospace and defense applications and funding, but slowly seeing commercial adoption of the technology. I am forecasting that the overall market will grow strongly, with a CAAGR of 28% through 2017. As I did my research, it became clear that many commercial market segments are getting close to a point of inflection in GaN adoption, but most aren’t quite past that point just yet. There continues to be strong adoption of GaN devices in CATV infrastructure applications and wireless infrastructure applications are now seeing growth. Other RF commercial applications like microwave and millimeter wave radios and VSAT or Satcom networks present intriguing opportunities for the advantages of GaN and it looks like those segments will be contributing nicely to GaN device revenue in the near future.

The most interesting opportunity for GaN devices looks to be the power management segment. This is presently a very large market and the anticipated increase in data consumption and concern for energy efficiency should support continued growth of this market segment. GaN-on-silicon is the technology of choice for these applications. Manufacturers are already producing low cost GaN devices that are very competitive with the cost of the incumbent silicon-based technology, while easily surpassing the performance. I am forecasting that this segment will see explosive growth, with a CAAGR of slightly more than 90% over the forecast period.

I haven’t forgotten the aerospace and defense segment! The big uncertainty in this segment in the near future is the sequestration process in the US. This has added substantial uncertainty to the US DoD budget, but we remain optimistic that even if this issue is not resolved, GaN will still grow in these applications. We believe that with more scrutiny on where the budget dollars are spent, systems will become more sophisticated and this will mean more electronics content. Aerospace and Defense applications have accepted the technical superiority of GaN for quite some time. We think GaN will continue to capture share from other technologies and the net result will be more GaN content, even in the face of shrinking US DoD budgets.

Look at the report if you have a moment and please feel free to share your thoughts. This remains an extremely dynamic market with product, process and manufacturing developments occurring quickly. With so many commercial market segments being close to volume adoption of GaN devices, the overall market is likely to remain very dynamic and exciting, so stay tuned!

-Eric

While I try to get current with product and financial announcements, I thought I’d spend a moment discussing some of the news from the July to September quarter. The two recently published reports: “Compound Semiconductor Industry Review July - September 2012: Microelectronics” and “Compound Semiconductor Industry Review July - September 2012: Optoelectronics, Materials & Equipment” highlight financial, product, contract and employment announcements from the compound semiconductor industry. The executive summaries of both reports focuses on the financial aspects of the industry and both segments are facing some challenges. The microelectronics segment appears to be trending upward, but it is still challenged to reach the revenue levels the industry saw in 2011. With the close of 2012, I see no reason to change my stance that when the revenue is counted, we will see a slight growth, but growth nonetheless.

On the optical side of the house, the picture is much fuzzier. The LED industry is still reeling from subsidies that have slowed and is plagued by a dramatic decrease in price, even in the face of slow unit growth. This is not only affecting the LED industry, but the material and equipment portion. Solar power continues to see a lot of political momentum as the best thing for the environment, but companies are still struggling to make money. The report has almost as many companies reorganizing and shutting down operations as those that are increasing capability, so the best direction for the industry is still not clear.

While the financial aspect is very important, it has masked some very interesting product development trends in both segments of the industry. It should come as no surprise that GaAs is under fire from other compound semiconductor technologies like GaN and SiGe, but also increasingly from silicon CMOS-based processes. The breadth of companies developing these applications is growing. On the microelectronics side, the report captures an announcement from Amalfi Semiconductor that they shipped their 100 millionth CMOS PA. Javelin also announced a CMOS PA design win in a Samsung 3G phone. The success of the CMOS PA manufacturers has been pretty evident. In the past year or so, Axiom Microdevices (Skyworks) and now Amalfi (RFMD) have been acquired by larger “GaAs manufacturers” as these companies make a relatively small defensive bet on CMOS technology as a hedge against their stakes in the nearly $3 billion handset PA market.

However, the CMOS target is not just handset PAs. The reports also capture RFaxis announcing seven new products aimed at high-volume markets as part of their “turn off the GaAs” campaign. Fujitsu announced a CMOS-based power detector and Silicon Labs and Avago announced a CMOS optocoupler. Even companies closely associated with GaAs are expanding their silicon offerings with Skyworks announcing a driver for LEDs and Hittite expanding their silicon-based ADC and clock generator offering.

So, the battle is on. The reality is that there is no perfect technology and the market selects the best solution. I’ve been saying that while silicon has a number of advantages, don’t count GaAs out just yet, especially where performance targets are steadily increasing. In a shameless plug, if you plan to attend IMS2013 in Seattle, stop by for a panel session entitled “The Death of GaAs (?)” that I will be chairing. I’m sure we will have a lively session discussing many of the same issues that I’ve raised here!

Eric

The Strategy Analytics GaAs and Compound Semiconductor Technologies Service (GaAs) viewpoint, “Compound Semiconductor Industry Review October-December 2011: Optoelectronics, Materials and Equipment,” captures product, technology, contract and financial announcements from major material, device and equipment suppliers in the optoelectronics market supply chain, such as AIXTRON, IQE, Kopin, Oclaro, GigOptix, Cree, JDSU, Avago Technologies, Finisar and Osram. These announcements are categorized by material and equipment, laser, LED and compound photovoltaic activity.

Despite recent, highly publicized problems at Evergreen Solar and Solyndra, solar energy continues to play an essential role in political strategy as government and the private sector seeks viable sources for renewable energy. It is easy to get a negative outlook about an entire segment when a couple of the high profile participants run into difficulties. The reality, however, is that solar energy has become a widely deployed form of alternative energy. The product development announcements we captured in Q4 provide a counterpoint to the bankruptcy proceedings at Evergreen Solar and Solyndra and show growth and activity in the compound photovoltaic technologies which underpin the solar market.

The growth starts at the begiining of the supply chain with commitments of $2 billion to increase polysilicon production by 23,000 metric tons per year. Companies like Spire, Avancis, Soitec and First Solar are expanding their photovoltaic module manufacturing plans and TSMC, through its TSMC Solar subsidiary has entered the module manufacturing arena. These announcements, coupled with more companies reporting efficiency records for solar cells points to a vibrant industry with good opportunities for compund semiconductor materials.

The outlook in the LED sector is not quite so upbeat. AIXTRON, one of the leading semiconductor equipment manufacturers reported a steep drop in revenue and orders in 2011. They blame high levels of government funding in China and financing pressures on the Asian LED manufacturers for masking a significant organic slow down in LED demand in China. It appears production in 2012 will continue to grow, but perhaps not enough to offset price erosion. Despite, this, there is still a signficant amount of development activity at companies like Cree, Bridgelux, Epistar and Luminus. These developments aim at increasing efficiency, output and affordability for applications ranging from low power consumer devices to high intensity specialty lighting and streetlights.

Eric

 For clients to read more:

 

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

For Clients to Read More:

 

 

Strategy Analytics was honoured to give the keynote speech at the plenary session of Compound Semiconductor Week on June 2, 2010 in Takamatsu, Japan.   The presentation discussed the current status and future outlook for GaAs, GaN and InP technologies covering both RF/microelectronics and optoelectronics applications.  GaAs-based devices will continue to enable next generation wireless technologies, while InP will be at the forefront of future telecom network rollouts that will enable demand for high bandwidth applications supporting traffic demands from emerging 3G and 4G networks. While the market for GaN RF and power devices is still be at an early stage, GaN-based LED devices will be pivotal to the development of future solid-state lighting markets and are currently driving flat panel TV backlighting trends. There is also an emerging opportunity for compound semiconductors in the terrestrial photovoltaic market.   Strategy Analytics forecasts that the collective market for GaAs, InP and GaN compound semiconductor devices will grow at a CAGR of 16% through 2014 to be worth over $32 billion.  The presentation, Compound Semiconductor Markets: Current Status and Future Prospects Through 2014 is now available on the GaAs service.

Dr David Allstot from the University of Washington kick-started the 2010 IEEE Radio Frequency Integrated Circuits Symposium with a review of the challenges and ongoing research into CMOS power amplifiers for use in the cellular radio front-end. Highlighting the energy consumption and CO₂ emissions from cellular handset usage, Dr Allstot emphasized the need for more efficient PAs as continued motivation for development of CMOS PA technologies.  Research into CMOS PAs has been ongoing for around 20 years, with current designs achieveing around 1W power outputs and up to 60% PAE. The performance of typical power amplifier PAs including Class A, B and E were highlighted, and then put into context with the demands of current networks which place greater importance on PAs operating backed off from peak power with schemes such as 64QAM resulting in probability distributions that translate into actual efficiencies of only 5%.  Dr Allstot provided examples of digital PAs comprising multiple PA cells and power combining techniques that have been put forward to address these issues, and highlighted the potential for Class G power PAs that feature a hump-shaped curve with the first peak aligning with probability distribution curves of a 64QAM spectral signal and offering the potential for efficiencies as high as 24%.  While these results are promising, Strategy Analytics still sees a gap in performance capabilities between GaAs and CMOS PAs which is compounded by cellular handset requirements continuing to evolve. This translates into a moving target that places greater emphasis on linearity, efficiencies and peak-to-average ratios (PAR) and in our opinion will continue to favour the capabilities offered by compound semiconductor technologies.  Nevertheless, the pervasive nature of RF technology will open up doors for CMOS and SiGe PAs, while also continuing to provide growth the compound semiconductor technologies, and this was highlighted by the second plenary talk, given by Gregory Waters of Skyworks Solutions Inc.  Mr Waters provided an overview of how the growth in the cellular handset market has transformed the RF industry into a mainstream technology with future trends pointing to greater pervasive use of RF in multiple applications. Smartphones are leading the initial trends towards more complexity in the radio chain which translates into greater content and provides continued growth for the industry.  Video is the primary driver for the RF market moving forwards with social media driving demands for always-on connectivity. This in turn will translate into more RF content going into terminals to meet these needs. Skyworks estimated that average RF content has increased by around 2.5 to 4x the content required when delivering voice-only capabilities.  The different approaches in the cellular front-end to handle these growing needs were highlighted, from multiple PAs through broadband PAs able to tackle high-band and low-band RF chains, to solutions that will cover all bands through a converged solution. This will be coupled with techniques such as envelope tracking and digital predistortion to provide more linear, more efficient RF solutions.  The other key message from Skyworks was that RF technology will become even more pervasive in its application moving forwards, with embedded RF translating to multiple applications, examples including smart metering for utilities, vending machines and passive RF technology for tracking applications.  To serve market needs moving forwards, RF companies will need to continue developing a broad base of technologies that incorporate not only the RF, but also interconnects and packaging   Strategy Analytics sees this pervasiveness as a catalyst that will open doors for Si technologies while the growing complexity needed to serve the always-on connectivity will present continued opportunities for compound semiconductor technologies.

As Seoul Semiconductor targets the US market with a 100 lm/W LED (which effectively incorporates a rectifier within the device) aimed at general lighting applications, and Cree reports breaking the 200 lm/W barrier with a laboratory demonstration, demand for highly efficient GaN-based emitters is at an all-time high. A major reason for that is rooted in Seoul’s own backyard: Samsung is largely responsible for a recent ramp of chip production required to service its own LED-backlit TVs, while Seoul is a key supplier to LG Display for the same application. The major LED consumers are finding ways to cut down the number of chips needed in key applications (for example, the 2.6mm-thick 42-inch TV that LG Display showed off at January’s Consumer Electronics Show required only 264 LEDs in its ultra-thin backlight), but it is clear that the rapid success of LED backlights in TVs, coupled with rising interest in general lighting applications, is placing the LED supply chain under some strain. Orders for the MOCVD equipment required to make LED epiwafers are through the roof, and the industry appears to have entered a sustained period of capacity-constrained supply, potentially limiting overall LED market growth. Responding to the ramping needs of LED makers, Veeco has just launched a new, higher-yielding version of its K465 tool, while Aixtron is investing up to $40M in a research facility to develop next-generation deposition equipment. The current strong cycle of demand for LEDs looks like a precursor for a much larger one in the future that will be focused on general lighting. Seoul begins mass production of its 100 lm/W LEDs  in the current quarter, but by the time the lighting market really takes off for the likes of Osram, Cree and the rest, the LED industry’s supply chain may look a little different. While the leading merchant MOCVD tool suppliers Aixtron and Veeco are scaling up efforts to service that demand, the unprecedented market pull for LEDs appears set to bring additional competition. That comes in the form of another Korean firm: Jusung Engineering. In mid-January, Jusung installed a “beta” MOCVD tool at Epivalley, also in Korea, and clearly senses an opportunity to muscle in on Aixtron and Veeco territory with its high-capacity (124x2-inch) tool. Applied Materials appears to have similar plans and we may see the market landscape for tool suppliers change significantly over the next few years. For more on this topic, see TV Backlights and their Impact on the LED Industry

Twelve months ago, the GaAs and compound semiconductor industry was caught deep in the fall-out of the economic crisis, with production at a near-standstill.What a difference a year makes! The gloom has been banished, replaced by widespread optimism, market growth and plans for company expansions.Almost without exception, the GaAs RFIC manufacturers who entered 2009 with trepidation have witnessed a strong recovery (see our latest Compound Semiconductor industry reviews). Some will even expect to post revenue growth from 2008 to 2009 – unthinkable a year ago. III-V component vendors are also witnessing the long-awaited commercial breakthrough of GaN for RF applications, courtesy of demand for more efficient hybrid line amplifiers in cable TV infrastructure. At least two GaN vendors are targeting a product ion ramp in early 2010 as operators look to cut energy consumption (see Strategy Analytics’ forecast for device demand in CATV here). But it is the light-emitting diode space that gives the greatest cause for optimism. Key equipment companies have noted a huge build-up in orders (see our November Insight here), largely the result of an expected surge in demand for LED backlights used in TVs from 2010 onwards. Strategy Analytics’ latest report on this emerging sector forecasts that, by 2013, TV applications will swell the market for LED chips by some $7.5B – more than doubling the size of the entire current market – while helping to usher in the solid-state lighting revolution in the process.Evidence to back up this anticipated explosion in demand for LEDs is now widespread, with significant capital-raising activity leading to major expansion plans announced by LED makers, substrate material vendors and equipment suppliers alike. Overall, then, it’s been a transitional year for the compound semiconductor industry. Having emerged from the global recession in a leaner but meaner form, it can now look forward to what is shaping up to be a very happy 2010. Asif Anwar