The Gallium Arsenide GaAs Wafer Market is expected to grow at a CAGR of 12.5% during the forecast period. GaAs is mainly used is common in electronics, such as semiconductor manufacturing. The price of this compound is being regulated, creating more growth opportunities for the manufacturers of gallium arsenide (GaAs) wafers.
- The significant growth drivers for this market are the increasing adoption of smartphones and the growing penetration of light-emitting diodes (LED) in general lighting. The advent of IoT has been one of the primary reasons responsible for the increasing market trend. The technology has created a demand for high-frequency communication devices made with GaAs-based ICs.
- Also, with several companies expanding their communication infrastructure, the demand for GaAs-based devices will increase, which will trigger the growth of the GaAs wafers market in the forthcoming years. The need for GaAs devices across various end-user industries such as aerospace & defense, electronics, and communications is increasing, which, in turn, is boosting the demand for GaAs Wafers globally.
- Further, another critical factor driving the growth of the GaAs wafer market includes the increasing adoption of 4G and 5G networks worldwide. However, its high production cost is the restraining factor affecting the GaAs wafer market.
- Its price is a significant disadvantage, which explains its low utilization. To solve this dilemma, engineers and researchers have achieved new methods of manufacturing thin films of low-cost gallium arsenide to create devices that would replace silicon, thereby increasing the efficiency of photovoltaic cells.
- The COVID-19 pandemic and the subsequent decisive government actions severely impacted the semiconductor sector, affecting the manufacture of semiconductor components and lowering customer demand, thereby impeding the global market's growth. Furthermore, high manufacturing costs are expected to be a prominent factor restraining market growth from 2022 to 2027.
Key Market Trends
Radio Frequency Electronics to Hold the Significant Share in the Market
- The radio-frequency devices produced with GaAs substrates are commonly used in wireless communication applications, including wireless networks (WLAN), mobile communication, 4G/5G base stations, satellite communications, and Wi-Fi communications. The trend marks an important milestone in developing next-generation, high-performance, ultra-compact RF front-end chipsets that are needed for 4G and 5G smartphones and other handsets.
- GaAs wafers' lower power consumption and higher efficiency are enticing market participants to adopt them, increasing the demand for GaAs wafers. Optoelectronic devices were previously widely used in short-range optical communications and computer peripherals. Still, they are in high order for new applications such as lidar, augmented reality, and facial recognition.
- The rising internet penetration worldwide, especially in developing countries such as India and Brazil, has stimulated the demand for GaAs wafers. Subsequently, the need for backhaul, base stations, and fiber-optic networks in wireless communication infrastructure and Wi-Fi connectivity products have escalated and hence support the growing penetration of the internet worldwide, which, in turn, is boosting the adoption of GaAs wafers.
- Further, the growth of mobile data and the wide adoption of IoT propel the requirement for Wi-Fi and other wireless communication devices. The high growth rates for such technologies and other products related to wireless communications are aiding the adoption of GaAs wafers. Hence, the demand for GaAs wafers for wireless communications networks will continue to increase during the forecast period.
Asia Pacific to Dominate the Market During the Forecast Period
- In the Asia Pacific region, there is an increasing demand for intelligent devices. China, Japan, Taiwan, and India have surging demand for advanced technological devices such as smart devices, smartphones, computers, and laptops, further augmenting the regional market's growth. The product offers better connectivity through enhanced data transmission and quality than semiconductor devices. GaAs products can be manufactured on large scales with high yield rates, improving business growth. The increasing Internet penetration, 4G and 5G networks, and the expansion of the electronic industry are expected to fuel the development of the global GaAs market.
- One of the major driving factors in this region is the increasing demand for advanced technological devices such as smart devices, smartphones, computers, and laptops. The need for GaAs wafers in the area is growing at a promising rate.
- China dominates the market for the electronics industry. There is considerable government support in this region which is fostering the market growth. For instance, the Chinese government is promoting its domestic technology market by funding the industry players. The need for a safe, reliable, and clean energy source in various countries is likely to increase the demand for solar cells, which will help the market of GaAs wafers to develop.
- Taiwan has witnessed the wafer market as one of the critical areas of technological development, thereby driving market growth. According to SEMI, the world semiconductor equipment market will exceed USD 100 billion in 2022, with Taiwan ranked second in procurement.
- The region's low labor and production costs are important factors fueling the market's growth. Due to the increasing production, Taiwan is expected to hold a significant market share in the market studied. The consumer expenditure and changing consumption patterns toward more discretionary spending have significantly contributed to the growth of semiconductor manufacturing in the region. Companies across Taiwan are addressing the supply chain needs of front-end silicon and back-end advanced wafer-level packaging architectures to cater to specialty materials and processes, thus, influencing the overall market studied.
The Gallium Arsenide GaAs Wafer Market is highly concentrated with a few companies Sumitomo Electric Industries Ltd., AXT Inc, Semiconductor Wafer Inc, Freiberger Compound Materials GmbH, Xiamen Powerway Advanced Material Co. Ltd, dominating the market share. The already established companies are strengthening their position by investing heavily in research and development and providing customers with better and technologically advanced products.
- May 2022 - The MOSIS Service of Information Sciences Institute, University of Southern California, announced a Memorandum of Understanding with WIN Semiconductors Corp. to accelerate the development of GaAs and GaN monolithic microwave integrated circuits (MMICs) with WIN Semiconductors' GaAs and GaN process technologies. The collaboration will support the reliable, innovative, and effective design and prototyping flow through the multi-project wafer (MPW) projects with the MOSIS Service and WIN Semiconductors.
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