The latest Strategy Analytics analysis on the semi-insulating (SI) GaAs bulk substrate market reveals that demand for SI GaAs bulk substrate increased by 29 percent year-on-year in 2006. “Markets for Semi-insulating GaAs Substrates: 2006–2011” forecasts that the overall SI GaAs substrate market will grow at a compound annual average growth rate of 6 percent through 2011.
Volume growth for SI GaAs bulk substrates will be driven primarily by increasing GaAs content in cellular handsets and Wi-Fi radios with millimeter-wave, CATV, DBS and fiber-optic markets also adding demand. However, while substrate demand will continue to increase, rising material costs will place pressure on bulk substrate supplier profitability and process technology trends will impact overall growth.
“With major GaAs fabrication running at full capacity throughout the industry, the GaAs bulk substrate suppliers were in a strong position in 2006,” notes Asif Anwar, director of the GaAs service. “However, the strong demand has also increased raw material costs. We estimate that gallium costs have risen by almost 120 percent over the past two years.”
“Overall demand will be counterbalanced by process technology trends toward integration and smaller die sizes, which at first glance, is a negative for bulk substrate suppliers,” observes Stephen Entwistle, vice president of the Strategy Analytics Strategic Technology Practice. “Ultimately, however, these trends will ensure that GaAs device manufacturers offer added value to their end-customers, securing future demand for GaAs substrates.”