YG PRESS NEWS – GaAs vs InP markets: the competition has started

According to Yole Intelligence, part of Yole group, in the Photonics GaAs and InP Compound Semiconductor Market Monitor, long driven by datacom applications, VCSELs for 3D sensing become the biggest application for GaAs photonics after Apple’s adoption in the iPhone X back in 2017. The total die market is worth US$1.83 billion in 2022 and is expected to will double in value by 2028. To achieve cost-effective high-volume production, manufacturers now use the 6-inch diameter GaAs wafer platform. The competition of two business models in GaAs photonics directly reshapes the supply chain. Lumentum, a key supplier for Apple, has forged partnerships with epitaxy houses and foundries over the years, while Coherent (previously known as II-VI) has pursued vertical integration through mergers and acquisitions. Recently, a new company has entered the 3D sensing ecosystem of smartphone manufacturers. In the epiwafer market, IQE holds a dominant position as a major supplier. What will the competition between main players look like? And how will the return of Android smartphone manufacturers change the GaAs photonics market in the future?

The main market drivers for InP remain datacom and telecom, due to the unique capabilities of InP photonic devices in achieving high bandwidth, data rates, and long reach in optical transceivers. The InP market is expected to grow from US$3 billion in 2022 to US$6.4 billion in 2028. However, there is growing interest in emission and detection at wavelengths around 1300nm and 1500nm for sensing applications. Prominent consumer product manufacturers adopting InP technology for proximity sensors in wearable earbuds and smartphones have been observed. Notably, Apple, known for its innovation in the handset industry, has redesigned the notch of the iPhone 14 Pro family to a pill shape, incorporating certain sensors below the OLED screen. This transition involves replacing GaAs VCSELs with InP Edge Emitting Lasers (EELs). Such a shift opens up opportunities for major GaAs players to venture into the InP market, as both materials can utilize the same processing tools… For more information about this analysis, please contact us!