Photonics GaAs and InP Compound Semiconductor Market Monitor

Consumer applications are shaping the GaAs and InP photonics markets

The qualification of a third supplier by Apple for GaAs Vertical Cavity Surface Emitting Lasers (VCSELs) in the 3D sensing market has shaken the GaAs business. Substrate players are competing to be in Apple’s supply chain, while device makers are seeking to be the main supplier and thus increase their market shares. New GaAs VCSEL technologies are expected to feature in the next generation of Apple smartphones. In addition, the expected adoption of 8” diameter GaAs substrates for MicroLEDs in Apple smartwatches could open opportunities for the GaAs VCSEL market and thus drive a move from 6” to 8” wafer diameter platforms.   

The penetration of InP into consumer markets is still a hot a topic as of Q1-23. We are still witnessing major developments in InP technology to support under-display 3D sensing modules. Trumpf has stepped up its challenge with further development in its InP VCSEL performance while several other players are working on technology development. IQE is investigating 6” InP substrates and looking for opportunities in the consumer market. On the other hand, Rockley Photonics has filed for bankruptcy, which has impacted the adoption rate of InP in smartwatches.

From a stable GaAs to a dynamic InP market: Will fierce competition lead one to dominate? 

Long driven by datacom applications, VCSELs for 3D sensing become the biggest application for GaAs photonics following Apple’s adoption in the iPhone X in 2017. The total die market is worth $1.83B in 2022 and it will double in value by 2028 in Yole’s estimation. Manufacturers now use the 6-inch diameter GaAs wafer platform to achieve cost-competitive high-volume production. The competition of two business models in GaAs photonics directly reshapes the supply chain. Apple’s supplier Lumentum built partnerships with epitaxy houses and foundries in past years, while Coherent, formerly known as II-VI, implemented vertical integration through mergers and acquisitions. Now, a new company has recently entered smartphone manufacturers’ 3D sensing ecosystem. In the epiwafer market, IQE is the 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, thanks to the unique ability of InP photonic devices to reach high bandwidth and data rates and long reach in optical transceivers. According to Yole’s analysis, the InP market will grow from $3B in 2022 to $6.4B in 2028. However, there is growing interest in emission and detection at wavelengths around 1300nm and 1500nm for sensing applications. We have spotted major consumer product manufacturers adopting InP for proximity sensors in wearable earbuds and in smartphones. Apple, being a key innovative player in the handset business, has reduced the notch size in the iPhone 14 Pro family to a pill shape, positioning some sensors below the OLED screen. Such a move means replacing GaAs VCSELs with InP Edge Emitting Lasers (EELs). This could pave the road for major GaAs players to move into InP, as both materials share the same processing tools. 

Ams OSRAM, AXT, Coherent, Freiberger Compound Materials, IQE, Landmark, Lumentum, Sumitomo Electric, VPEC and more.

Context

• Definition of estimated market, terminology at substrate, epitaxy and device level
• Photonics application market segments

Three-page summary

GaAs photonics: changes since the previous quarter

GaAs photonics market overview

• GaAs Photonic die market dynamics
• Open GaAs Photonic epiwafer market dynamics
• GaAs Photonic wafer market dynamics
• GaAs Photonic die revenue
• GaAs Photonic epiwafer shipments
• Open GaAs Photonic epiwafer revenue
• GaAs Photonic epiwafer pricing
• GaAs Photonic wafer shipments
• GaAs Photonic wafer revenue
• GaAs Photonic wafer pricing

GaAs photonics market forecasts

• GaAs Photonic die market by segment
• GaAs Photonic die market shares by segment
• Open GaAs Photonic epiwafer market by segment
• Open GaAs Photonic epiwafer market shares by segment
• GaAs Photonic wafer market by segment
• GaAs Photonic wafer market share by segment

GaAs photonics technology

• GaAs Photonic die market by device type
• Open GaAs Photonic epiwafer market by device type
• GaAs Photonic wafer market by device type

GaAs photonics supply chain and market players

• Supply chain and business models
• Fab capacity estimation
• Chinese Photonics Industry
• Lumentum - GaAs Photonic die revenue
• Coherent - GaAs Photonic die revenue
• Ams OSRAM - GaAs Photonic die revenue
• IQE - GaAs Photonic epiwafer revenue
• VPEC - GaAs Photonic epiwafer revenue
• Sumitomo Electric - GaAs Photonic wafer revenue
• Freiberger Compound Materials - GaAs Photonic wafer revenue
• Trumpf - GaAs Photonic device
• Win Semiconductor - GaAs Photonic foundry

InP photonics module: changes since the previous quarter

InP photonics market overview

• InP Photonic die market dynamics
• InP Photonic open epiwafer market dynamics
• InP Photonic wafer market dynamics
• InP Photonic die market revenue
• InP Photonic open and captive epiwafer market shipments
• InP Photonic open epiwafer market revenue
• InP Photonic Telecom and Datacom epiwafer pricing
• InP Photonic wafer shipments
• InP Photonic wafer market revenue
• InP Photonic wafer pricing

InP photonics market forecasts

• InP Photonic die market by segment
• InP Photonic die market by application
• Open InP Photonic epiwafer market by application
• InP Photonic wafer market by application
• InP Photonic wafer volume by application

InP photonics technology

• InP Photonic die market by device type
• InP Photonic wafer market by device type
• InP Photonic wafer volume by device type
• InP Photonic wafer volume by wafer size

InP photonics supply chain and market players

• Supply chain and business models
• Fab capacity estimation
• Chinese Photonics Industry
• Coherent - InP Photonic bare die revenue
• Lumentum - InP Photonic bare die revenue
• LandMark - InP Photonic epiwafer revenue
• IQE - InP Photonic epiwafer revenue
• AXT- InP Photonic wafer revenue
• Sumitomo Electric - InP Photonic wafer revenue

Conclusions: What to look for in the coming quarters

• Device revenue market shares: GaAs vs. InP
• GaAs Photonics – what to look for in the coming quarters?
• GaAs Photonics - Long term business outlooks
• InP Photonics – what to look for in the coming quarters?
• InP Photonics - Long term business outlooks

Annex: terminology and definitions

• Acronyms
• Explanation and methodology
• Open and Captive market
• Formulas used
• Laser diodes – Comparison of DFB and FP EELS and VCSELS
• Technological requirements by application

Key Features

• Quarterly data update
• Market forecast through 2028 in M$US for devices, wafers and epiwafers and units for wafers and epiwafers for Photonics GaAs, and Photonics InP.
• Market forecast through 2028 by market segment including Telecom, Consumer, Automotive, Industrial and Medical in M$US revenue
• Market forecast breakdown by technology including discrete and wafer size
• Market players at device, epiwafer and wafer level for Photonics GaAs and Photonics InP from 2019 to present by M$US revenue

What’s new? 

• 2022-2028 Photonics GaAs and InP market forecast of device, epiwafer and wafer
• Analysis on the breaking news in the GaAs and InP  eco-system
• Up-to-date analysis of Photonics GaAs and InP eco-systems

Product's objectives

• Quarterly data update
• Market forecast through 2028 in M$US for devices, wafers and epiwafers and units for wafers and epiwafers for Photonics GaAs and Photonics InP applications
• Market forecast through 2028 by market segment including Telecom and infrastructures, Mobile and Consumer, Automotive and Mobility, Industrial and Medical in M$US revenue
• Market forecast breakdown by technology including discrete and wafer size
• Market players at device, epiwafer and wafer level for photonic GaAs, including Lumentum, Coherent, ams OSRAM, IQE, VPEC, Sumitomo Electric and Freiberger from 2019 to present by M$US revenue
• Market players at device, epiwafer and wafer level for photonic InP including Coherent, Lumentum, Landmark, IQE, Sumitomo Electric and AXT from 2019 to present by M$US revenue