I have just released our latest GaAs bulk substrate market updates. The data model, “SI GaAs Substrates Markets: 2011-2016” and the Forecast and Outlook,“Semi-insulating GaAs Substrate Markets: 2011 – 2016” show that slow growth in the GaAs device market in 2011, coupled with a shift away from GaAs technology for handset switches dropped demand for semi-insulating GaAs bulk substrates by 4%. The other major driver for the GaAs bulk substrate market in 2011 was the devastating earthquake and tsunami that hit Japan. With so much of the supply chain located in this region, the accompanying disruption seems to have raised substrate prices and the overall market value as a result.
This certainly is not how you hope to see revenue growth in a market and this set of circumstances will be short-lived as the Japanese people continue working diligently to restore the country back to “normal”. The supply chain disruptions seem to have largely settled out and I expect the market to revert to slow growth and a more traditional price erosion curve beginning this year. I am optimistic the GaAs bulk substrate market returns to growth in 2012 because GaAs device manufacturers are seeing some growth in revenue and demand and most of the conversion of handset switches to SoI has already taken place.
The survey results indicate demand for GaAs bulk substrates reached slightly more than 32100 ksi in 2011. Even though the demand dropped by 4%, the market value increased by 12% to reach nearly $230 million. This revenue increase appears to be a singular event tied to the earthquake and tsunami aftermath. My forecast indicates demand and revenue will return to slow growth with demand reaching nearly 39000 ksi and revenue growing to slightly more than $240 million by 2016.