Slow growth in the gallium arsenide (GaAs) device market, coupled with a shift away from GaAs technology for handset switches, reduced demand for semi-insulating GaAs bulk substrates by 4% in 2011, according to the recently released report 'Semi-insulating GaAs Substrate Markets: 2011-2016' from Strategy Analytics' GaAs and Compound Semiconductor Technologies Service (GaAs).
"Growth in the GaAs device market slowed noticeably in the second half of 2011, and this slowdown was one of several factors causing GaAs bulk substrate demand to decline", notes Eric Higham, director of the Strategy Analytics GaAs and Compound Semiconductor Technologies Service (GaAs). "The other notable trend that has slowed growth in GaAs substrate demand is the rapid conversion of handset switches to technologies other than GaAs," he adds.
However, the 2011 earthquake and tsunami in Japan disrupted the entire GaAs bulk substrate supply chain, resulting in increased substrate pricing and higher overall revenue. The market research firm hence estimates that total demand for semi-insulating (SI) GaAs bulk substrates from manufacturers such as Freiberger Compound Materials (FCM), Hitachi Cable, AXT, Sumitomo and Dowa reached slightly more than 32100 kilo square inches (ksi) in 2011, resulting in nearly $230m in revenue.
"These disruptions have increased substrate prices in the short-term but, as they diminish, we expect modest market growth and substrate price declines will return," says Asif Anwar, director in the Strategy Analytics Strategic Technologies Practice (STP). The report hence forecasts that demand and revenues will return to slow growth, with demand reaching nearly 39000ksi and revenue growing to slightly more than $240m by 2016.
