As LED lighting becomes an US$80 billion industry, the market for the epitaxial wafers (epi-wafers) LEDs are made from will grow to US$4 billion in 2020, according to Lux Research.
The vast majority of these epi-wafers are gallium nitride (GaN)-on-sapphire today, said Lux Research. GaN-on-silicon is the leading emerging technology with a strong economic allure – silicon is just one-eighth the cost of a sapphire substrate – but technical challenges will limit it to only a 10% market share in 2020. GaN-on-silicon carbide (SiC), championed by Cree, will grow to an 18% market share, Lux Research indicated.
"Silicon is already widely used for electronics, and some LED die manufacturers are hoping to take advantage of silicon substrates," said Lux Research analyst Pallavi Madakasira. "But GaN-on-Si is more prone to cracking than GaN-on-sapphire, and mitigating this mismatch is expensive."
Choice and cost of LEDs will determine adoption, Lux Research also observed. "Where GaN-on-sapphire is suited to all applications, GaN-on-bulk GaN will be relegated to niche commercial lighting and GaN-on-Si, with unproven performance, will be better suited to cost-sensitive residential applications," the research firm said.
In addition, Lux Research forecast that 4-inch wafers will peak at 62% market share with US$2.1 billion in 2017 sales. However, the LED industry will move toward 6-inch epi-wafers, which will take a 35% share equivalent to US$1.4 billion in 2020, the firm indicated.
Other findings from Lux Research include sapphire substrate manufacturing technology has advanced significantly, with specialists such as Rubicon and Monocrystal demonstrating substrates up to 12-inch in diameter. New methods like hydride vapor phase epitaxy (HVPE) will further improve throughput and cut costs, keeping sapphire highly competitive for the rest of the decade, the research firm believes.
