PUBLISHER: Prescient & Strategic Intelligence | PRODUCT CODE: 1803347
PUBLISHER: Prescient & Strategic Intelligence | PRODUCT CODE: 1803347
The global compound semiconductor market is projected to grow robustly from approximately USD 41.2 billion in 2024 to around USD 70 billion by 2032, indicating a compound annual growth rate (CAGR) of 7% for the period 2025-2032. The market is fragmented, with North America currently holding the largest share and Europe expected to emerge as the fastest-growing region. Asia Pacific also features prominently in regional consideration due to widespread adoption across multiple industries.
Market Drivers include rising demand across telecommunications, automotive, and energy sectors. In the automotive domain-especially electric vehicles (EVs) and advanced driver-assistance systems (ADAS)-compound semiconductors serve critical roles in power inverters, onboard chargers, radar, LiDAR, and V2X communications, enhancing energy efficiency, charging speeds, driving range, and thermal performance. Investment initiatives such as a USD 51.7 million U.S. Department of Energy fund for EV and smart transportation projects further support demand. Additionally, smart grids and industrial power systems are increasingly leveraging these materials for improved power management, regulation, and reliability.
In the telecommunication sphere, compound semiconductors-particularly GaN and GaAs-enable high-frequency operation, enhanced thermal management, and better performance in 5G and future communication infrastructure. These devices support smaller, faster RF modules critical to expanding telecom networks. Major investments, including USD 65 billion from TSMC for U.S. chip fabrication facilities (backed by USD 6.6 billion U.S. government funding), and extended funding from South Korea's government (about USD 6.4 billion by 2025) are propelling growth in semiconductor production.
Segmentation highlights chemical vapor deposition (CVD) as the dominant and fastest-growing deposition technology-accounting for approximately 65% market share in 2024-due to its precision, scalability, and suitability for producing high-quality thin films required in advanced device manufacturing. Among compound semiconductor types, gallium nitride (GaN) leads with about 45% of the market share in 2024, favored for its high breakdown voltage, low conduction resistance, high electron mobility, miniaturization potential, and superior high-temperature and high-frequency performance. Meanwhile, silicon carbide (SiC) is expected to exhibit the highest growth rate owing to its robust voltage and thermal handling, particularly in power conversion applications like solar inverters and wind turbines.
In terms of product segments, power electronics dominate-accounting for around 40% of the market in 2024-driven by the need for efficient components in consumer devices, smart appliances, and energy conversion systems. SiC devices' superior thermal conductivity and breakdown strength compared to silicon further bolster their adoption in high-voltage and industrial settings. RF devices also represent one of the fastest-growing product categories due to increasing demand for high frequency communication solutions.
Telecommunications remains the largest application area at around 45% of market share in 2024, fueled by mass deployment of 5G, surging mobile data traffic, and the expansion of technologies like IoT, AI, and machine learning. Adoption of GaAs and other compound materials in powerful mobile and wireless components further reinforces this trend. The automotive sector is noted as one of the fastest-growing application segments given its adoption of EVs and advanced electronics.
Regionally, North America accounts for the biggest share-55% in 2024-with strong government initiatives such as the U.S. CHIPS and Science Act, involving over USD 52 billion, supporting semiconductor manufacturing including GaN and SiC. Europe is expected to grow at the highest rate (around 6.9% CAGR) driven by efforts in automotive electrification, AI, renewable energy systems, and legislative support like the EU Chips Act (EUR 43 billion).
Key players active in the market include Nichia Corporation, Samsung Electronics, NXP Semiconductors, Qorvo, Skyworks Solutions, NVIDIA, STMicroelectronics, Canon, Infineon, Mitsubishi Electric, Intel, and TSMC. Recent developments include Intel's 2025 launch of Xeon 6 and Lunar Lake processors, Infineon's wafer supply agreement with SK Siltron CSS for SiC, and Nichia's in house production of high-power red laser diodes, complementing its blue and green diode ranges.