Which applications are dominating the RF and microwave market, and what materials are being used most widely within in the related technologies?
Those of you, who know your indium phosphide from your gallium nitride, skip to the second paragraph. The rest of us will have a quick chemistry lesson. Conductors, like copper and aluminium, are materials that transmit heat and electricity. Semiconductors, like silicon, can act as a conductor if exposed to a temperature increase, but equally work well as an insulator. And compound semiconductors, as the name suggests, are materials made up of two or more elements, like gallium arsenide (GaAs) and gallium nitride (GaN) and their composition provides a number of benefits over silicon, including faster processing and operation at higher voltages. In this article, we will address three questions:
• Which applications are dominating the RF and microwave market?
• What materials are being used most widely within in the related technologies and why?
• How is the industry structured and what are the opportunities for UK businesses?
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Fig 1 – Source: Engalco
Figure 1 shows the overall RF and microwave market in 2016 by application and indicates that defence equipment is still the largest sector overall. However the size and complexity of these systems means that compound semiconductors probably represent a smaller part of the overall value than for some other applications. Satellite comms also represents a significant portion of the market, although this too is skewed by high equipment costs. Automotive and security applications are significant and are growing rapidly, and test and measurement (T&M) also represents a sizeable but often underestimated market.
The importance of cellular applications (3G, 4G, and in future 5G) cannot be underestimated: industry sources estimate that as much as two-thirds of the RF compound semiconductor market is accounted for by these applications. This has increased over the years due to the requirement for mobile handsets and terminals to retain interoperability with legacy technologies. When the many other wireless and connectivity applications such as WiFi and Bluetooth are included, then the RF wireless applications sector exceeds 80% of today’s total RF semiconductor revenue stream.
Although GaAs still dominates the RF compound semiconductor market, it is clear that GaN devices have already achieved a foothold and hold promise for further expansion, especially in the field of high power amplifiers where they are even beginning to take market share from vacuum devices.
While the defence sector has been a major driving force in the GaN RF market – with much investment having been placed to service outstanding needs in electronic warfare, radar, communications, and jammers for improvised explosive devices, for example – this emphasis is likely to diminish as new radio equipment designs for 5G begin to emerge. A Strategy Analytics forecast indicates that defence applications will still account for more than half of GaN device revenue up to 2018, but many sources expect GaN to eventually take over a significant share of power amplifier slots in cellular base stations and small cells. Its potential for use in mobile handsets is limited by the high operating voltage, which despite offering good efficiency is less compatible with battery operation.
Industry structure and supply chain
The defence sector is characterised by large vertically-integrated multinational corporations such as BAE Systems, Thales, Northrop Grumman, Lockheed Martin, L3, Raytheon, Finmeccanica, MBDA and Cobham, several of whom have specialised in-house semiconductor manufacturing capability but also purchase from external suppliers. The commercial sector, including telecoms, is much more open and fragmented, although for base stations and infrastructure it is dominated by Ericsson, Huawei and Nokia Siemens Networks. These companies now have less in-house component and subsystem manufacture than they did a decade or so ago, and largely purchase devices on the open market.
Newer applications such as M2M/IoT, wearable technology, and augmented reality are inspiring a whole host of start-ups and spin-offs from larger companies, who have the ability to be more nimble and creative than the traditional giants. Overall there is a trend towards outsourcing RF and microwave design and a move towards concentrating these skills in small consultancies, and this is an area in which the UK has a particular reputation for excellence.
At a global level, the main players in the RF compound semiconductor device market are mainly in the US, with a few in Europe and APAC. Qorvo (formed from the merger of RFMD and TriQuint), Skyworks, MACOM and Wolfspeed (recently de-merged from Cree) are the US companies who dominate the market, with Broadcom (formerly Avago) playing a smaller role. In Europe Infineon, OMMIC, UMS and NXP are all active, while APAC players include WIN Semiconductors in Taiwan, and RFHIC in South Korea. The traditional Japanese players such as Toshiba and Mitsubishi have been losing ground to their competitors in recent years. Ampleon, the former NXP power RF division that was spun off in 2015, is now under Chinese ownership, and offers some GaN devices alongside a much larger LDMOS product portfolio.
Research and development activity in industry is underpinned by a sound base of world-class University research into RF and microwave devices and applications, and also by many academic-industry collaborative programmes. Continued nurturing of skills, education and vocational training has been identified by many in the industry as a key requirement for developing and maintaining a competitive edge in this fast-moving technology environment.
This note is a perspective piece on Compound Semiconductors and is part of a series. Please come back in the near future to learn more.