Just back from Montreal and the IMS2012 Conference. There were a lot of interesting products and technical topics being discussed during the week, but I’d like to focus on the breakfast session entitled “Where are the Emerging RF Market Opportunities for GaN?” that we sponsored in conjunction with Microwave Journal. First off, I’d like to thank the participants from Cree, Nitronex, NXP, RFMD, TriQuint and UMS for their time, effort and input. I’d also like to thank the more than 130 attendees that took time from their schedules to hear some of our latest market forecasts and GaN product developments from the participating companies.

GaN market development has benefitted greatly from funding and research derived from the military industry. In our latest GaN market research, GaN Microelectronics Market Update 2010 – 2015, we conclude that military applications will continue to account for the lion’s share of the GaN market. Even with commercial applications starting to emerge, we are forecasting military markets will still account for slightly more than 2/3 of the estimated ~$180 million GaN market in 2015.

The panelists all did a great job of describing actual GaN products developed at their respective companies. They also confirmed that the properties of GaN make it well suited for products addressing EW, radar and communications applications, by highlighting products with some combination of high power, high efficiency and wide bandwidth performance. Of note were S-band 240W transistors from Cree with 60% PAE, 50W GaN-on-Si MMIC amplifiers from Nitronex operating from 0.8 – 2.2 GHz with 55% PAE, a 500- 2500 MHz amplifier from NXP with between 50 and 75W CW output, 50 – 1000 MHz 15W amplifiers from RFMD with more than 60% PAE, 10W PAs from TriQuint that operate from 2 – 18 GHz and 15W X-band PAs from UMS. The examples just mentioned are only the tip of the iceberg, so please visit the websites of these companies to see the depth and breadth of their product offerings and the extent of their GaN development efforts for military applications.

The presentation of commercial products also proved to be quite interesting. Initially, it seemed power conversion products in automotive applications and power amplifiers in infrastructure applications would lead GaN penetration into commercial markets. When we surveyed the industry for the GaN forecast referenced above, it seemed clear these applications were not seeing any significant GaN adoption. However, it appears that the infrastructure situation may be changing quickly as a couple of the panelists mentioned GaN capturing market share from LDMOS in macro and small cell applications. The efficiency and bandwidth performance of GaN seem to be offering enough of an advantage to achieve design wins. It should be noted that not everyone agreed that GaN, even with the performance advantages (that the LDMOS developers are working hard to minimize) was close enough to LDMOS in price to capture significant market share. So, this is certainly a dynamic market segment that we will be watching closely.

In our research, we found GaN amplifiers for CATV applications are seeing significant adoption. Our panelists agree, with most of them mentioning products for these applications. For CATV infrastructure applications, the higher efficiency of GaN-based amplifiers reduces the power consumption and OPEX, by extension. The other dimension for GaN into this market is in green-field applications (primarily), the networks can use fewer amplifiers to maintain the necessary power levels to the users. We anticipate this will be one of the fastest and largest commercial RF applications for GaN in the future.

Thanks, again to everyone who participated and attended this event. While military applications will continue to grow and drive fundamental development, I think we are on the verge of rapidly increasing commercial adoption of GaN. While CATV, infrastructure, Satcom and conversion applications are the likely initial candidates, many other applications are currently under evaluation. Keep an eye on the Strategy Analytics website as we continue to update our forecasts and thoughts on the GaN market!

Eric

We're sure you'd like to know about two key GaN sessions featuring Strategy Analytics and industry leaders at MTT-S Montreal, Canada in June.

Firstly, don't miss the opportunity to meet with Strategy Analytics on the show floor to hear how GaN is becoming a pivotal technology in the Defense Sector.

We'll be presenting on Tuesday 19th June at 10 a.m. to kick off a series of Richardson RFPD Supplier Presentations and you can get the full schedule by clicking here.

Secondly, on Wednesday 20th, we're partnering with Microwave Journal to invite you to a special business-focused session entitled

'Where are the emerging market opportunities for GaN?'

Following our complimentary breakfast at 8 a.m. (room 516 at the Palais des Congres), this key question will be addressed by a market overview presentation from the Strategy Analytics team.

The Strategy Analytics opening forms the basis for business viewpoints presented by RFMD, TriQuint, Cree, NXP, Nitronex and UMS after which the industry panel will invite your questions.

If you're going to be at MTT-S IMS in Montreal (17th - 22nd June), then from a business viewpoint, you should see these two sessions as a must to get new insights in the future of GaN.

Steve Entwistle

Ref: E61

I had a chance to provide some thoughts on changes in the CATV industry in April's cover story in Microwave Journal (Architecture and Amplifier Device Developments in CATV Networks). For an industry that had a reputation as "static" not that long ago, there are now many evolutionary (and revolutionary) changes underway. Driving these changes is the ever-increasing consumption of data. The CATV network and industry was born out of the need to impove over-the-air television reception, but increasing consumer appetite for more channels, higher definition, video-on-demand and faster internet speed has changed this network into a primary source for all communications needs.

 The CATV network plays a central role in the convergence of voice, video and data into the “triple-play” that cable and telecom network operators are bundling so aggressively to consumers. With video and internet data consumption increasing so dramatically, the traditional coax CATV network has become the HFC (Hybrid Fiber Coax) network with fiber pushing deeper into the network because of the bandwidth advantages it provides. In response to the bandwidth advantages of fiber, cable operators have responded by increasing the bandwidth of their networks, along with channel bonding schemes developed in conjunction with the DOCSIS 3.0 specification. As telecom operators like Verizon and AT&T in the US have paused to consider their fiber to the home strategies, cable operators like Comcast have been only too happy to fill the void with competitive internet and television offerings.

 So what does this mean for compound semiconductors? As is the case with wireless communications, bandwidth is still a precious resource and the need to increase the information contained in a relatively fixed bandwidth allocation means more spectral efficiency and sophistication in devices. These trends at the system level usually are enabled by the performance advantages offered by compound semiconductors. Traditionally, this was an industry that relied on silicon BJTs as the building block for the system amplifiers that boost the signal as it travels over long distances and many splits from a headend where content is added to a consumer premises. As GaAs MMIC technology has matured and the performance has improved, designers have been converting these amplifier building blocks to GaAs MMIC and hybrid technology devices.  

The latest development in the CATV network is adoption of GaN-based amplifier building blocks. The performance characteristics of GaN have long made this a favorite “replacement” technology for power devices, but for a variety of reasons, commercial adoption has been very slow. In our latest GaN market update (GaN Microelectronics Market Update: 2010 - 2015), we’ve found that GaN finally appears to be getting commercial traction in CATV networks. Initially, the thought was that the power performance of GaN-based amplifiers would allow operators to eliminate some of the system amplifiers in a typical network architecture. Operators were reluctant to adopt this idea because they didn’t want to disrupt a working architecture (“if it isn’t broken….don’t fix it”) However, these same operators have been very receptive to the idea that if they keep the network architecture the same and operate the GaN-based amplifiers at the same output conditions as the incumbent GaAs or silicon amplifiers, they realize an energy savings. The higher efficiency of the GaN devices has translated into operating cost savings (electricity), which is also ties in to the "green" initiatives that have become so important for comanies and the environment. This energy saving feature has been the single biggest reason we are beginning to see commercial adoption of GaN. 

Leading the charge are companies like RFMD, Nitronex, TriQuint and ANADIGICS. In public announcements, Nitronex claims they have already shipped more than 200,000 GaN devices for CATV applications and RFMD believes GaN for all applications will account for $15 million of revenue in 2012, with this figure doubling in 2013. They anticipate 25% of their GaN revenue will come from CATV applications in the future. 

There are still challenges to GaN adoption in the CATV market. The reliability concern is diminishing as companies build a history of operation with the technology. The biggest remaining challenge seems to be cost. Our research showed that GaN devices are commanding a price premium of 15-30% over GaAs devices. While this seems counterintuitive in the extremely cost sensitive commercial market, there is not as much price pressure on CATV infrastructure parts as there would be on a mobile handset and the operating expense savings is overriding the acquisition cost increase. Nonetheless, there is still pricing pressure. Even allowing for the premium, the cost of GaN devices appears to be in the $0.50 - $0.60/W range and some GaN foundry companies wonder whether this price reflects the true cost of the devices and if it is sustainable long-term.  

So, the technology that has long been rumored as “about to take off” seems to finally be gaining a foothold in the commercial RF market. However, along with the volume benefits of a commercial market comes the disadvantage of steeper price erosion curves. This is the driver behind the efforts to reduce die sizes for GaN devices and the efforts to develop cheaper GaN-on-silicon (versus SiC) alternatives. 

The dynamics of this segment of the compound semiconductor market are changing all the time, so stay tuned as we at Strategy Analytics stay on top of developments!

 Eric  

The latest Strategy Analytics GaAs and Compound Semiconductor Technologies Service (GaAs) viewpoint, “Compound Semiconductor Industry Review October-December 2011: Microelectronics,” captures product, technology, contract and financial announcements for companies such as RFMD, Skyworks Solutions, Fujitsu, ANADIGICS, Agilent, Hittite Microwave, TriQuint Semiconductor, Avago, NXP Semiconductors, Microsemi, Renesas Electronics, Freescale, Broadcom Cree and Murata Manufacturing. These announcements address a variety of commercial and military applications that use gallium arsenide (GaAs), gallium nitride (GaN), Silicon carbide (SiC), silicon germanium (SiGe) and complementary metal-oxide-semiconductor (CMOS) technologies.

On the financial side, results were generally positive with most of the semiconductor companies reporting sequential quarterly revenue increases. The biggest exceptions were silicon device companies Freescale and Microsemi and GaAs device manufacturer TriQuint. The third calendar quarter is typically the largest revenue quarter for semiconductor companies as their customers ramp production of consumer devices in preparation for the holiday season. Based on this quarter, the three largest GaAs device manufacturers, Skyworks, RFMD and TriQuint all appear to be on different trajectories. Skyworks closed their fiscal year with a 32% increase in revenue. With the timing of their year-end, this is a bit deceiving because it captures the last quarter of 2010, which was a very good year for GaAs. However, this much is clear: Skyworks is consolidating their postion as the largest compound semiconductor device manufacturer. RFMD, after seeing year-over-year revenue drop by about 20% in the first half of 2011 finally saw a revenue increase in the third quarter. After exiting 2010 with strong revenue growth, TriQuint maintained enough growth to surpass RFMD's revenue in th first half of 2011. They have been unable to maintain this growth and closed 2011 just below RFMD.

Even though the compound semiconductor industry growth rate is slowing from previous levels, product and process development is continuing, particularly with Gallium Nitride (GaN). As products using GaN technology continue to gain acceptance in military and commercial applications, development activities at microelectronics companies are accelerating. GaN-based products have demonstrated performance advantages for military systems for some time and they are finally beginning to see acceptance in commercial applications, such as CATV and wireless infrastructure. As these application areas broaden, the industry is responding by increasing their efforts to develop new products, processes and partnerships. Recent announcements indicate growing interest in GaN-on-silicon processing to reduce cost and higher voltage GaN processes to improve power handling performance. Nitronex was particularly active in this area, announcing a multi-stage GaN device with interstage matching, a new 48V GaN-on-silicon process and qualification of the GCS foundry for production of Nitronex's existing GaN processes. In addition, RFMD expanded their line of GaN CATV amplifiers, Mitsubishi Electric anounced two C-band amplifiers for earth station satellite applications and UMS announced their first GaN transistor, targeting a variety of applications.

Eric

For clients to read more:

Meet Strategy Analytics at EUROPEAN MICROWAVE WEEK 2011

We'll be there from Monday 10th - Wednesday 12th October

European Microwave Week is here again and this year Strategy Analytics has three days covered.

On Monday and Tuesday you have opportunities to meet with Asif Anwar** or Steve Entwistle** when the subject for discussion is entirely open for your choice ranging perhaps from questions of alternative strategies facing your company to the prospects for technologies and products emerging at this year's event. Arrange Meeting

On Wednesday you are invited to register for The 2011 Defence and Security Forum* at which Asif Anwar will be presenting his paper "The Impact of Budget Constraints on Future Defense Technology Investment"during the 12:30 'Lunch & Learn" session.  Asif will ask you to consider his assertion that ... despite current global economics ...

"... the desire for technology differentiation will lead to continued opportunities in emerging electronic platforms supplemented by a focus on upgrading existing capabilities." 

We therefore invite you to click here to arrange meetings and/or register for The 2011 Defence and Security Forum.

*Organised by Microwave Journal and the EuMA

**Asif Anwar is Director of Strategy Analytics' Advanced Defense Systems service

**Steve Entwistle is Vice President of Strategy Analytics' Strategic Technologies practice.

Best regards,

Steve Entwistle