The global economic meltdown slowed year-on-year GaAs industry growth from its previous forecast of 9 percent down to 6 percent in 2008. With the market projected to contract again 5 percent year-on-year in 2009, gains made in 2008 will be effectively wiped out and the GaAs industry is projected to generate revenues of $3.5 B in 2009, according to the Strategy Analytics GaAs annual industry forecast and outlook for the GaAs (gallium arsenide) industry.

“The GaAs industry effectively shut down as handset manufacturers turned off the taps in the final quarter of 2008,” observed Asif Anwar at Strategy Analytics. “However, Strategy Analytics believes that the market has bottomed out and multiple GaAs device insertions in cellular handsets will be augmented by demand from other wireless markets as well as requirements from defense, consumer, fiber optic and automotive sectors.”

Demand from wireless markets, including cellular handsets, will continue to be the primary growth engine for the GaAs industry. While Strategy Analytics expects growth to return in 2010, with all major end demand sectors growing through 2013, industry revenues will fall short of previous expectations of $5 B. The overall growth will be tempered as a result of the economic downturn and growth will show signs of flattening out in 2013. Overall, the GaAs, RF and microelectronic device market will grow at a CAAGR (compound annual average growth rate) of 4 percent through 2013, to be worth $4.5 B.