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!