Photonics GaAs and InP Compound Semiconductor Market Monitor

Artificial intelligence could fuel a surge in the datacom market over the upcoming quarters​

In the forthcoming quarters, the trajectory of the InP and GaAs markets is set to soar, propelled by artificial intelligence applications. As these applications continue to expand across various industries, the need for faster, more efficient data transmission becomes paramount. This is attributed to the surging demand for 800G optical transceivers, featured with GaAs VCSEL for short-reach applications and InP EML for long-reach applications. This could help the datacom market is start recovering between Q3-23 and Q4-23 after a sever slowdown in the first half of 2023.​

In the mobile and consumer applications, Apple will release their iPhone 15 models on 12th of September. It is expected that Apple will come back to GaAs-based proximity sensors featured within the Pill-shape instead of the under-display InP-based sensors.​

China has announced on 4th July its intention to implement restrictions on gallium, germanium, and their chemical compounds to safeguard Chinese national security starting from the first of August 2023. Exporters will be required to obtain licenses from the commerce ministry to continue shipping these materials out of the country. In this quarter, Yole analysts share their understanding and analysis on the recent export rules and its short-term and long-term consequences on the compound semiconductor supply chain.​

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​

• Photonics application market segments​
• Monitor identity card​

Global Market Analysis​

GaAs photonics: changes since the previous quarter​

GaAs photonics market overview​

• Annual GaAs bare-die, epiwafer and wafer market forecast​
• 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​
• Open GaAs Photonic epiwafer market by segment​
• GaAs Photonic wafer market 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​

• Annual InP bare-die, epiwafer and wafer market forecast​
• 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 Sensing 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​
• Definition of estimated market, terminology at substrate, epitaxy and device level​
• 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? 

• Q2-23 revenues of the main players in the InP and GaAs markets​
• Analysis on the breaking news in the GaAs and InP  eco-system ​
• Focus on Gallium raw materials new export rules from China​
• Analysis on the slow-down in the InP market related to optical communication segment​
• 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