Global Markets and Technologies for Compound Semiconductors -- Focus on the EMEA Region

Report Highlights

• Global sales from compound semiconductor components totaled nearly $25.5 billion in 2011 and should surpass $27 billion in 2012. Total sales are expected to reach nearly $47.5 billion in 2017 after increasing at a five-year compound annual growth rate (CAGR) of 11.9%.
• EMEA should have sales totaling nearly $8.5 billion in 2012 and nearly $16.4 billion in 2017, a CAGR of 14%.
• Germany region is expected to have sales worth nearly $2 billion in 2012 and $5.2 billion in 2017, a CAGR of 21.4%.

INTRODUCTION

Compound semiconductors have captured the attention of researchers, semiconductor device makers, and original equipment manufacturers (OEMs) for several years on account of their superior physical and chemical attributes in relation to silicon, the mainstream semiconductor material.  The greatest value that they bring to the table is that of variety and customization.  It is not surprising that compound semiconductors are the prime ingredients of some of the most complex semiconductor components ever synthesized.

Compound semiconductors occupy important places in the scheme of the manufacturing of lasers, optical components, light-emitting diodes (LEDs), filters, mixers, power amplifiers, solar panels, and other devices.  The advantages that compound semiconductors offer are higher operating speed, lower power consumption, lower noise, higher operating temperature, light emission/detection, and superior photovoltaic attributes compared to silicon.  Additionally, these attributes change from compound to compound, offering considerable design flexibility.

On the flip side, the variety of compounds works unfavorably in terms of scale and consequent pricing.  Considering that these materials are pitted against silicon, the most widely available material with the most refined and cost-efficient fabrication process, there is a real danger of the competition being rendered lop-sided in favor of silicon.

However, it is not entirely accurate to compare and confine compound semiconductors to the benchmarks set by silicon.  Compound semiconductors have a distinct character of their own and they spawn several use-cases of application that can be catered to only by them.  This report is an attempt to capture the value added by compound semiconductors to the larger semiconductor component industry.  The value is assessed at two levels in the component manufacturing process:  the material stage and the component stage.  The report assesses the value of compound semiconductor material sold to component manufacturers as well as the value of the components manufactured by these companies.  The focus of the report is on the component, which has a perfect balance in the unitary nature of its composition and the diverse nature of its application.

STUDY GOALS AND OBJECTIVES

This study has the following goals and objectives:

• Measuring and forecasting the global market size for compound semiconductor–based components in value (dollar sales) and volume (shipment sales) terms.
• Breaking down the global compound semiconductor component market along the following individual components in value and volume terms:  lasers and optical components; LEDs; radio frequency (RF) front end and power amplifier chipsets; and solar/ photovoltaic (PV) panels and cells.
• Breaking down the market for individual compound semiconductor components along the following end applications in value and volume terms:  telecommunications; instrumentation and scientific research; medicine; energy, defense, and surveillance; computing and entertainment; industrial and automotive; retail; and others.
• Breaking down the market for individual compound semiconductor components along the following regions in value and volume terms:  the Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific (APAC).
• Breaking down the market for individual compound semiconductor components along the following compound semiconductor families in value and volume terms:  binary II-VI, binary III-V, binary IV-IV, and others.
• Breaking down the market for individual compound semiconductor components along relevant individual compound semiconductors in value terms.
• Breaking down the market for individual compound semiconductor components along the following countries in value and volume terms:  U.S., Brazil, Canada, Mexico, Germany, U.K., France, Italy, Spain, Russia, The Netherlands, Turkey, China, Japan, India, Indonesia, and South Korea.
• Breaking down the market for compound semiconductor materials used in individual compound semiconductor components along the following compound semiconductor families in value terms:  binary II-VI, binary III-V, binary IV-IV, and others.
• Analyzing the stakeholder landscape in the compound semiconductor component value chain.
• Analyzing the patenting activity involving compound semiconductor components.

REASONS FOR DOING THE STUDY

Compound semiconductors provide a welcome departure from the cut-throat cost-competitive scheme of silicon fabrication.  It will not be out of place to mention that the bulk of innovation on the process and device front is driven by compound semiconductors and that they occupy a disproportionately large share of this activity.  It is undisputable that compound semiconductors win hands down in terms of physical and chemical attributes over silicon.  It is equally clear that silicon will continue to enjoy a substantial competitive advantage in terms of operating scale and availability for the foreseeable future.

This report aims to provide a quantitative point of view with regard to the tightrope traversed by compound semiconductors.  The report tries to bring out the quantitative contribution of compound semiconductors to the components driven by them, in terms of plain bill of materials (BoMs).  At the same time, the report examines the value added by compound semiconductors in qualitative terms.

Essentially, the report focuses on components, which can be easily quantified and whose physical attributes can be compared, contrasted, tracked and analyzed.

Each component has its own dynamics, benefits and challenges with respect to levels of adoption of compound semiconductors.  On a larger note, each component has its own market momentum dictated by the health of the end-application verticals as well as relevant macroeconomic factors.  When these aspects are mapped for individual countries, they produce a fascinating collage of local market conditions that add to the larger picture.  This report provides a granular view of individual country markets in volume and value terms for 17 key nations spanning all global regions.  There are several variables to be considered:  preferred compounds, cost benefits of competing compounds, entry-level barriers, level of fragmentation, state of innovation, and attitude of governments in terms of support, as well as future avenues for market expansion.  This report attempts to look at all of these factors and quantify their impact on the state of the demand for compound semiconductors and their components.

SCOPE OF THE REPORT

The report measures and forecasts the size of the market in current U.S. dollars as well as in millions of shipment units for components that contain compound semiconductors as primary parts.  This report also measures and forecasts dollar sales of compound semiconductor materials from 2012 through 2017.

The report forecasts the market size for the following:

• Individual compound semiconductor components such as lasers and optical components; LEDs; RF power amplifier and front-end chipsets; and solar/PV cells and panels.  It should be noted that in solar panel shipments one square meter of the panel is considered to be a unit.  It also should be noted that the component market sizes in this report do not reflect the total market for such components, but only those portions that contain compound semiconductors as primary parts.
• The above forecasts are classified in terms of vertical end applications, geographical regions, compound semiconductor families, and countries on volume and value bases; in terms of value chain contributors on a value basis; and in terms of individual key compound semiconductors on a value basis.
• Additionally, the report forecasts the sales of compound semiconductor family materials for each of the individual compound semiconductor components.

The Executive Summary provides a snapshot of key findings of the report.

The chapter on theory of compound semiconductors highlights important technology concepts behind compound semiconductors.  It also introduces the reader to the various categories and types of compound semiconductor materials and components, as well as manufacturing and fabrication technologies.

The chapter on global markets for compound semiconductor components provides a thorough breakdown of the market for compound semiconductor materials and components.  The breakdown focuses on the components that employ compound semiconductors as primary parts.  This chapter also provides a comprehensive, quantitative view of the compound semiconductor material and component market.

The chapter on regional analysis for EMEA presents an overview of the region and the overall market metrics, followed by analyses of individual major countries such as Germany, France, U.K., Spain, Italy, Russia, the Netherlands and Turkey.

The chapter on stakeholders highlights stakeholder categories and analyzes the activities in this domain.  It also clarifies where and how stakeholders fit in the larger picture.

The U.S. Patent Analysis chapter highlights the patenting activity underway in the area of compound semiconductor components.  The chapter classifies the patents awarded according to categories such as LEDs, lasers and optical components, solar panels, and RF power amplifier and front-end chipsets.

INTENDED AUDIENCE

This report will be relevant to the following audiences:

• Laser and optical component makers in order to analyze the market prospects for their offerings broken down by compound semiconductor families, individual compound semiconductor end applications, geographical regions, and key country markets.
• LED makers in order to analyze the market prospects for their offerings broken down by compound semiconductor families, individual compound semiconductor end applications, geographical regions, and key country markets.
• RF power amplifier and front end makers in order to analyze the market prospects for their offerings broken down by compound semiconductor families, individual compound semiconductor end applications, geographical regions, and key country markets.
• Solar/PV panel and cell makers in order to analyze the market prospects for their offerings broken down by compound semiconductor families, individual compound semiconductor end applications, geographical regions, and key country markets.
• Compound semiconductor material suppliers in order to identify the potential of their output across leading component industries in the semiconductor domain.
• Original equipment manufacturers and other integrators to analyze the prospects of the compound semiconductor components employed by them in their devices, equipment and products.

METHODOLOGY AND INFORMATION SOURCES

Both primary and secondary research methodologies were used in this study.  Industry experts were interviewed as primary sources; secondary sources included industry consortia, individual company financial statements, published opinions, and other published sources including technical dissertations. 

ABOUT THE AUTHOR

Kaustubha Parkhi has worked in a broad range of functional roles with leading telecommunications operators and service providers such as Reliance Infocomm, Ramco Systems, and BPL Cellular.  He has written on an array of telecommunications and electronics-related subjects based on his critical analysis of the underlying technology and its business impact.  Kaustubha holds a Bachelor of Engineering (equivalent to a Bachelor of Science) in Electronics and Telecommunications and a Master of Business Administration in Systems.

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DISCLAIMER

The information developed in this report is intended to be as reliable as possible at the time of publication and of a professional nature.  This information does not constitute managerial, legal or accounting advice, nor should it serve as a corporate policy guide, laboratory manual or an endorsement of any product, as much of the information is of a speculative in nature.  The author assumes no responsibility for any loss or damage that might result from reliance on the reported information or from its use.