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.
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