The gallium nitride (GaN) substrate market will grow from $2.2bn in 2014 to more than $4bn by 2020, forecasts research and consulting firm IndustryARC in the report 'Gallium Nitride (GaN) Substrates Market Analysis: By Type (GaN on sapphire, GaN on Si, GaN on SiC, GaN on GaN); By Products (Blu-ray Disc (BD), Radio frequency amplifiers, LEDs, UV LEDs); By Industry (Consumer Electronics, Telecom, Industrial, Power, Solar and Wind)'.
The GaN substrate market is dominated by foreign substrates, where GaN is grown epitaxially on sapphire, silicon or silicon carbide (SiC). Bulk GaN substrates, i.e. GaN grown on a core GaN substrate, are much lower in volume and are still emerging. Currently, LEDs account for most GaN substrate consumption, with GaN-on-sapphire being the predominant substrate type.
The total market in 2014 comprised mostly 4-inch substrates. However, there is pressing demand for larger-diameter substrates. Making devices on smaller diameters leads to wastage of space and edges whereas larger diameters help to not only prevent wastage but also increase device efficiency.
The USA, Japan, Korea and some European countries are already advanced in adopting larger diameters. Conversely, the leading countries in the LED market (China and Taiwan) are in the transition phase, shifting from 2-inch to 4-inch and 6-inch substrates. LED makers in these countries are now actively making efforts to boost efficiency in production costs and the production process. It is estimated that in China, by 2020, the number of LED-producing metal-organic chemical vapor deposition (MOCVD) reactors making devices on 6-inch substrates will be the highest. Moreover, the production of larger bulk GaN substrates is also estimated to start by 2018 and grow significantly by 2020. Therefore, in the next five years, the market is projected to incline towards larger diameters such as 6-inch and 8-inch, forecasts the report.
The GaN substrate market is currently led by LED and laser applications. However, over 2015-2020, power electronics are forecast to be the growth segment. In this sector too, players are seeking larger-diameter substrates to yield cost efficiency in production. The market is currently dominated by 2-inch and 4-inch substrates. However, as the end-use industries demand devices that can withstand higher powers with low losses, the core components of power electronics are expected to become extra effective and adopt 6-inch substrates.
The Asia-Pacific region is both the major producer and consumer for the GaN substrate market. The Asia-Pacific market in 2014 was almost $1bn. The manufacturers of sapphire, GaN and SiC substrates are located in countries such as Japan, China, and Korea, which contribute to more than 80% of production. Furthermore, bulk GaN substrate production is also dominated by Asia-Pacific players, especially Japan. In the coming years, China is expected to dominate the market, as its cheaper and faster LED production stirred up the LED industry before 2014, positioning China as the major threat to global players. In particular, the cost of gallium material, fabrication and packaging is lower in China than elsewhere, attracting more manufacturers into the market. However, as China-based players take over substrate production and attain global market share, quality remains the major issue to be addressed, forecasts the report.
