Yole Group Viewpoint – Compound semiconductors are changing the power, RF and photonic industries

February 12, 2024

The emergence of compound semiconductors based on SiC, GaN, GaAs, and InP is providing enhanced performance and revealing new applications

The compound semiconductor industry is emerging in parallel to silicon-based semiconductors, providing both improved performance as well as new functionalities that are intrinsically limited to silicon, such as light emission. Compound semiconductors are surging in popularity in power electronics, RF, photonics, and microLED display applications, thus eclipsing silicon. At the core of these applications lie various compound semiconductor materials. The electrification of transport is enhanced using SiC- and GaN-based power devices; 5G telecommunications infrastructure and defense keep driving GaN RF standardization for high power amplifiers; the mobile market is recovering, thus driving steady volumes for GaAs, while with new frequency bands , it might bring new opportunities for GaN-on-Si; and InP/GaAs-based EELs/VCSELs are key devices for optical communications, as well as sensing in automobiles and smartphones. Finally, GaAs/GaN-based microLEDs are expected to deliver brighter and more power-efficient displays than traditional LEDs/miniLEDs

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Starting with power applications, power SiC based 600V transistors still dominate due to their deployment in Tesla’s 400V BEV models. However, the trend is to transition to 800V BEV models. Yole believes that 1200V devices are the primary enabler of 800V BEV. In addition, some industrial applications – charging infrastructure, motor drives, photovoltaics, and others – use 1200V SiC devices. Looking into the future, we expect greater deployment of 1200V SiC devices in line with the trend toward 800V BEVs, with main inverters and high-power modular DC charging infrastructure applications. 1700V and higher-voltage-rated SiC devices target industrial, transportation, and energy applications, representing a smaller volume. As indicated in the Q1-24 edition of the Power SiC/GaN CS market monitor, Yole expects the power SiC device market to reach $10.4B in 2029. Moving on to Power GaN, which is mainly used in lower power applications, 650V is preferred for AC-DC conversion in power supply applications, and the penetration rate in the consumer and datacom/telecom applications is expected to increase. The low voltage ratings – under 200V – are preferred for high-end and high-performance LiDAR, motor drives, and DC-DC applications, such as in electric vehicles, datacom, telecom, and Satcom. With regard to this, Yole Group forecasts the power GaN device market to reach $2.5B in 2029. How will GaN and SiC compete with existing Silicon power devices? How is the supply chain evolving in both industries? Yole Group’s quarterly updated Power SiC/GaN Monitor and annually updated Power SiC and Power GaN reports address these fundamental questions.

GaN epiwafer is an essential building block for Power GaN devices. The choice of the epi-ready substrate and the optimization of the epitaxy process are critical for defining device performance. Yole Group has conducted in-depth analyses of GaN epitaxy for HEMT structures, as shown in the images below. Two main substrates are identified: Si (111), which requires a complex buffer to obtain good quality GaN active layers, and sapphire, which benefits from lower lattice mismatch and a simpler buffer.

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In RF applications, GaN power bars are used for high-power RF applications such as sub-6GHz 5G macro base stations and RF energy for consumer and industrial applications. GaN MMIC PAs are expected to grow, mainly driven by military radar, Satcom, and backhaul applications. According to the RF GaN CS quarterly monitor, Q1-24 edition, the RF GaN device market is expected to reach $1.96B in 2029. GaAs RF serves as a building block of each RF front-end module in smartphones and can also find growth opportunities in automotive applications. On the other hand, RF GaN-on-Si is also an interesting candidate for RFFE in 5G and 6G smartphones. How will GaN-on-Si compete with GaAs? What about the supply chain evolution in the dynamic GaN-on-SiC and GaN-on-Si markets, where key acquisitions happened in 2023, such as Macom acquiring Ommic and Wolfspeed’s RF business? Yole Group’s quarterly updated RF GaN Monitor, annual RF GaN report, and Status of Compound Semiconductors depict the market and supply chain evolutions in both the RF GaN and GaAs industries.

Regarding the photonics device market, GaAs VCSELs are driven by the consumer market for 3D sensing applications in smartphones. This has been the case since 2017, when Apple adopted GaAs VCSELs. Several Android players, such as Huawei and Xiaomi, have followed Apple but with the US sanctions on China the adoption rate has dropped significantly. Following the release of the Apple Vision Pro AR headset, device teardowns from Yole Group have revealed GaAs VCSELs technology, yet Yole expects the volumes of these headsets to be relatively small compared to smartphones. The current hype around artificial intelligence is also driven by GaAs VCSELs in data centers, mainly in short-reach optical interconnects. This requires high data rate 800G and beyond optical transceivers. 100G per lane VCSELs are the key enablers for these 800G OTs, and several players are already in mass production, such as Coherent and Broadcom, while Lumentum is expecting to start mass production in the second half of 2024. Not only GaAs VCSELs but also InP EELs will be driven by AI. 2023 was a difficult year for the InP photonics business, reflected by a slowdown and increased inventories from the hyper scalers and service cloud providers in addition to the slowdown in adoption in the consumer market. According to the most recent photonic GaAs and InP CS market monitors, the GaAs and InP photonic bare die market are expected to reach $1.9B and $5.2B, respectively, in 2029. How will InP and GaAs markets grow with AI? Can consumer 3D sensing applications enable new market growth for InP? Yole Group’s quarterly updated Photonics GaAs/InP Monitor and Status of Compound Semiconductor 2024 report covers these points closely.

The CS industry is an entire industry with its own equipment for crystal growth, wafer manufacturing, front-end manufacturing, testing, and packaging, with incredible growth supporting key societal and industrial trends. Therefore, it is essential to research the future of the CS substrate market, which could trigger key M&A, investments, and capacity expansions. According to the Status of the Compound Semiconductor Industry 2024 report, the CS substrates market is expected to reach $3.3B in 2029 with a 17% CAGR, while the CS open epiwafer market is forecasted to reach $2.5B in 2029 with a 19% CAGR. These numbers are enough to show the potential of the CS industry and the transformative phase that lies on the horizon.

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This phase is related to the expansion of the substrate’s diameters: 8” SiC and GaN-on-Si driven by power electronics in automotive and consumer markets, 6” InP driven by photonics in the datacom and consumer markets and 8” GaAs and Sapphire driven by microLED displays. For instance, the SiC industry is booming, with players focusing on expansion and investment. While 6” wafer remains mainstream for SiC, a $1.2B investment in an 8″ MHV fab by Wolfspeed spurred revenue in Q1-23. R&D focuses on increasing SiC wafer yield, including innovations like engineered substrates by Soitec and Sumitomo Mining. Major IDMs like Infineon focus on boule and wafer-splitting technologies. Power GaN primarily adopts 6-inch GaN-on-Si, while 8-inch GaN-on-Si gains ground with expansions by Innoscience, STMicroelectronics, and Infineon. Power GaN players are pushing to have a similar attractiveness to SiC. Innovations aim for vertical device structures and improved performance using new substrates like QST. In the RF business, GaN-on-Si is paving the road for new opportunities to compete with established technologies, such as GaN-on-SiC. Photonics rides AI’s wave, spurring high-data-rate lasers. InP photonics is an established market in a growth phase. Could AI drive InP’s transition to 6”? Meanwhile, GaAs explores 8″ manufacturing driven by microLED. MicroLED competes with OLED but is facing yield and efficiency challenges that question its success, but it is gaining momentum with substantial investments.

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The CS ecosystem is global: companies across all continents support this industry, with players in Asia leading in optoelectronic devices (in Japan, Taiwan, and China), power electronic giants in Europe and the United States, and most of the RF device leaders spread across the United States, Japan, and China. The same is true for substrates, for equipment, for manufacturing plants…, all spread across the world. No region dominates the entire supply chain, so cooperation is interrelated with competition.