Compound Semiconductor Market

The Compound Semiconductor Market is projected to reach USD 49,305.37 million by 2030, growing at a CAGR of 10.91% during the forecast period (2023-2030), with an estimated size of USD 29,379.25 million in 2023.

The global compound semiconductor production industry faced significant disruptions due to the COVID-19 pandemic, as manufacturing processes were halted in many regions under prolonged lockdowns. Country-specific restrictions imposed by governments further impacted various sectors, causing disruptions in supply chains and manufacturing operations worldwide. These measures severely affected productivity, including on the factory floor.

Compound semiconductors are composed of two or more elements from different or the same groups of the periodic table. They are manufactured using various deposition techniques like chemical vapor deposition and atomic layer deposition. These semiconductors possess unique properties, including high temperature and heat resistance, enhanced frequency, high sensitivity to magnetism, and faster operation, making them highly sought after. Additionally, the decreasing manufacturing cost of compound semiconductors has expanded their application in electronic and mobile devices.

The demand for compound semiconductors is further driven by their ability to emit and sense light in the form of LEDs, lasers, and receivers for fiber optics. The reduced manufacturing and installation costs of LEDs have increased their usage in lamps and fixtures across various sectors. With the growing population, mega-cities are investing in infrastructure development, prompting governments to support the installation of energy-efficient lighting solutions to reduce electricity consumption costs.

As an example, during the pandemic, Energy Efficiency Services Limited (EESL) successfully completed the Unnat Jyoti Program (UJALA), a one-year governmental project. Through this program, more than 10.6 million street light bulbs were replaced with LED lights, resulting in a reduction of 20 million tons of carbon dioxide emissions and electricity costs. Such initiatives provide further momentum to the compound semiconductor market.

In 2020, the Taiwan Semiconductor Manufacturing Company (TSMC) sourced approximately 31% of its spare parts locally in China, and this percentage remained unchanged in 2021.

According to the US Department of Energy (DOE), LED lights consume about 75-80% less energy than traditional incandescent bulbs and approximately 65% less energy than halogen bulbs. In commercial settings, where lighting is needed for extended periods, such as long working hours or ensuring safety and security in warehouses or manufacturing facilities, switching to LED lights can result in significant annual cost savings. For example, clients of US Energy Recovery can save anywhere from 20-55% on their electric utility bills by replacing old lighting systems with state-of-the-art LED lighting. Consequently, the increasing adoption of LED lights is driving the growth of the market.

Smartphones are the primary consumers of compound semiconductors, and the smartphone market has become highly competitive in recent years. The rising usage of mobile phones is expected to further drive the global market. According to the Ericsson Mobility Report 2022, by the end of 2027, there will be a projected 4.4 billion 5G subscriptions globally, accounting for 48% of all mobile subscriptions. Furthermore, the increasing adoption of Internet of Things (IoT) applications is expected to boost the sales of compound semiconductors. The growth of 5G networks also indicates a likelihood of consumers upgrading their mobile handsets or devices, further fueling the adoption of compound semiconductors worldwide.

The compound semiconductor industry is recognized as one of the most complex industries, characterized not only by the numerous manufacturing steps involved (over 500 processing steps) and a wide range of products but also by the challenging market conditions and unpredictable demand it faces.

The study encompasses various compound semiconductors, such as Gallium Arsenide, Gallium Nitride, Gallium Phosphide, and Silicon Carbide, among others. It also includes different product types, including LED, RF, optoelectronics, and power electronics, which find applications in various end-user industries like telecommunications, information and communication technology, defense and aerospace, consumer electronics, healthcare, and automotive. The study covers key regions such as North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa. The competitive landscape takes into account the market penetration strategies employed by different companies, considering both organic and inorganic growth approaches. These companies continuously innovate to increase their market share and profitability. The study also assesses the impact of the COVID-19 pandemic on the market. Market sizes and forecasts are provided in terms of value (USD million) for all the aforementioned segments.

Compound Semiconductor Market Trends
This section presents the significant market trends influencing the Compound Semiconductor Market, as identified by our research experts:

Optoelectronics to Experience Substantial Growth During the Forecast Period
Within the study scope, optoelectronic products encompass photodiodes, phototransistors, optical spectrum analyzers, solar panels, and other optoelectronic devices, excluding LED products.

GaN-based transistors are emerging as a preferred choice, especially in optoelectronics, compared to SiC-based transistors, due to their faster speed and higher efficiency. GaN offers electron mobility that is 1,000 times greater than that of silicon, and it exhibits relatively stable performance at higher temperatures.

Recent advancements in the field of optoelectronics, such as plasmonic nanostructures, perovskite transistors, optically active quantum dots, microscopic light bulbs, low-cost 3D imaging, laser-powered 3D display technology, and Laser Li-Fi, are expected to bring about significant changes in the diverse applications of optoelectronic devices.

In September 2021, the National Science Foundation (NSF) announced its support for a new project aimed at achieving atomic-level precision in the devices and technologies that form the foundation of modern life, with the potential to revolutionize industries like information technology in the coming years. The project, known as the Center for Integration of Modern Optoelectronic Materials on Demand (IMOD), is a collaboration among scientists and engineers from 11 universities, led by the University of Washington. These initiatives are anticipated to further drive the growth of the market under study.

In June 2022, researchers from the University of Central Florida (United States) and South Korea developed a multiwavelength optoelectronic synapse that enables optical data detection, storage, and processing within a single device. This groundbreaking achievement has resulted in an in-sensor artificial visual system with significant improvements in processing efficiency and picture identification accuracy. The future applications of this technology may include robotics, self-driving cars, and machine vision. Similar to the human eye, where the retina carries optical data through the synapse of the optic nerve, the optoelectronic synapse integrates optical data sensing, memory, and processing capabilities into a single device.

Additionally, in August 2022, Yokogawa responded to market demand by introducing two new optical spectrum analyzers (OSAs) capable of measuring a wide range of wavelengths to meet the specific requirements of optical product expansion and manufacturing. The Yokogawa AQ6375E and AQ6376E are the only grating-based OSAs that cover SWIR (Short-Wavelength InfraRed) over 2 μm and MWIR (Mid-Wavelength InfraRed) over 3 μm, offering advanced optical performance.

Middle East and Africa to Witness Significant Growth
Prominent countries in the Middle East and Africa, including Saudi Arabia, Egypt, and the United Arab Emirates, have implemented some of the region's largest renewable energy programs. These initiatives heavily rely on compound semiconductor devices for controlling the generation and integration of renewable energy sources into the power grid.

Furthermore, the semiconductor industry is gradually gaining traction in the Middle East and Africa, presenting significant market growth opportunities. An example of this is the launch of the Saudi Semiconductor Program by the King Abdulaziz City for Science and Technology (KACST) in March 2022. This program, the first of its kind in the region, aims to support research, development, and qualification of professionals in the field of electronic chip design and localization.

Additionally, Kenya made a significant stride in the semiconductor industry in April 2021 by establishing the first nanotechnology and semiconductor manufacturing factory in Africa. Located in Nyeri County, central Kenya, the facility was established through a public-private partnership between Semiconductor Technologies Limited (STL) and Dedan Kimathi University of Technology's Science and Technology Park, spanning 177 acres. These efforts to enhance the semiconductor industry in the region create a positive outlook for the growth of the market under study.

Moreover, Dubai has ambitious plans to have 42,000 electric vehicles (EVs) on its streets by 2030, and as part of the 'Smart Dubai' initiative, it is expected to invest millions of Dirhams in incentives. General Motors aims to boost sales in the Middle East and Africa by introducing its Chevrolet EV. The 'Green Charger' initiative by the Dubai Electricity and Water Authority is also expanding, with the completion of the second phase involving the installation of an additional 100 EV Green Charger stations across Dubai. These developments in the region demonstrate a growing focus on EV adoption and the necessary infrastructure, further contributing to the overall semiconductor industry's prospects.

According to the Climate Reality Project, the construction of the world's largest concentrated solar plant near Dubai is expected to be completed by the end of 2021. This plant will have a capacity of 1,000 MW and plays a crucial role in Dubai's goal to produce 75% of its energy from clean sources by 2050. By 2030, Dubai aims to have 25% of its energy mix coming from solar power. These ambitious renewable energy initiatives are driving the growth of the compound semiconductor market in the region.

Overview of the Compound Semiconductor Industry
The Compound Semiconductor Market is characterized by intense competition and is primarily dominated by key players such as Broadcom, Skyworks Solutions, Cree, Qorvo, Analog Devices, OSRAM, GaN Systems, Skyworks Solution, and Infineon Technologies. These major players hold significant market shares and are focused on expanding their customer base in international markets. They employ strategic collaborations and initiatives to increase their market presence and profitability. However, smaller and mid-sized companies are also gaining traction by leveraging technological advancements, innovating their products, securing new contracts, and exploring new markets.

In June 2022, ams OSRAM announced that Ledtech, based in Taiwan, had selected OSLON UV 3636 UV-C LEDs for a sanitization function in its new BioLED intelligent air purifier. These LEDs can effectively deactivate up to 99.99% of viruses, including SARS-CoV-2, with a dosing rate of 3.6mJ/cm2.

Another significant development in June 2022 was the partnership between Vitesco and Infineon Technologies. Vitesco will be supplied with silicon carbide power semiconductors by Infineon, and the collaboration includes the targeted development of SiC devices specifically designed for Vitesco's e-mobility applications.

In May 2022, Qorvo introduced the new UF4C/SC series of 1200V Gen 4 SiCFETs, which are designed for applications such as onboard chargers for electric vehicles, industrial battery chargers, power supplies, solar inverters, welding machines, uninterruptible power supplies, and induction heating. These SiCFETs enable 800V bus architectures and offer improved performance.

Furthermore, ON Semiconductor announced in May 2022 that NIO Inc., a global automotive manufacturer, had selected their latest VE-Trac Direct SiC power modules for their upcoming electric vehicles. These silicon carbide-based power modules provide benefits such as longer driving range, higher efficiency, and faster acceleration for electric vehicles.

Compound Semiconductor Market News
In August 2022, ON Semiconductor announced the opening of its silicon carbide (SiC) facility in Hudson, New Hampshire. This facility is projected to increase the company's production capacity by five times compared to the previous year and nearly quadruple the number of employees in Hudson by the end of 2022.

In June 2022, Analog Devices Inc. unveiled an 800MHz to 12.8GHz synthesizer designed for high-performance ultra-wideband data converter and synchronization applications. This synthesizer delivers a highly precise clock source to drive the signal sampling process, resulting in exceptional signal-to-noise performance.

Also in June 2022, ams OSRAM introduced a new combined ambient light (ALS) and proximity sensor. This sensor offers accurate color and illuminance measurements, as well as reliable proximity detection, even when operating beneath the high-speed, high-definition OLED screens found in the most advanced smartphones.

In April 2022, Wolfspeed announced that Lucid Motors had integrated its Silicon Carbide power device solutions into the Lucid Air, an electric car known for its high performance. Additionally, the two companies entered into a multi-year agreement for the production and supply of SiC devices.