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!