25 February 2021
RF GaN market growing at 30.58% CAGR to $3057.4m by 2026
The radio frequency (RF) gallium nitride (GaN) market was $665.81m in 2020, and is rising at a compound annual growth rate (CAGR) of 30.58% to a projected $3057.397m in 2026, according to the report ‘RF GaN (Radio-frequency Gallium Nitride) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)’ by Mordor Intelligence LLP.
One of the major factors driving demand is the increasing adoption of RF GaN in electric vehicles (EVs). Silicon carbide devices are already in use in the onboard battery chargers of electric buses, taxis, lorries, and passenger cars. In addition, increasing government regulations in favor of the EV market globally are further stimulating RF GaN market demand. For example, in India, the NITI Aayog Action Plan for Clean Transportation (released in 2018) recommended eliminating all permit requirements for EVs, in order to encourage electric mobility. Moreover, according to the International Energy Agency, almost 1.5 million battery electric vehicles (BEVs) were sold worldwide in 2018. These factors indicate that the growth of electric vehicles is expected to boost the adoption of RF GaN over the forecast period.
Artificial intelligence (AI), augmented reality (AR) and other sensing technologies require low latency for various applications like mission-critical end-use applications. This is expected to further drive demand for RF GaN devices.
Through strategic partnerships, R&D and mergers & acquisitions, some of the prominent players in the industry have been able to further the technology, fueling market growth over the forecast period. For example, in February 2019, MACOM Technology Solutions Holdings Inc and STMicroelectronics announced an expansion of the 150mm GaN-on-silicon production capacity in ST’s fabs, as well as 200mm, as per demand. The expansion is designed to service the worldwide 5G telecom infrastructure buildout.
The increasing implementation of Internet of Things (IoT) devices is expected to result in signal congestion and will demand the use of GaN technology that can amplify power, capacity and the bandwidth required for communicating with all interconnected devices, says the report. 5G technology is expected to unleash a massive IoT ecosystem that will increase the user-base manifold and increase demand for these semiconductors as network operators have to serve billions of connected devices.
Key market trends
The report notes that there is strong demand from the telecom infrastructure segment, driven by advancements in 5G implementation.
Due to the ability to provide higher-frequency data bandwidth connections, GaN RF technology is becoming the ideal choice for network service providers. These devices help to ensure that the device generates maximum frequency at the necessary band and also prevents any interference from other frequency bands.
The deployment of GaN RF power devices will enable advanced mobile devices to offer speeds that will allow consumers to upload and download high-quality content (such as music and photographs) and also play online games and watch online TV shows on maximum frequency bands, which is expected to lead to a rise in their adoption rates.
Moreover, companies are investing in the development of 5G core services and architecture. For example, in January 2019 ZTE Corp completed the IMT-2020 third phase of 5G test for core network performance stability and security function, thoroughly verifying the maturity of ZTE’s 5G core network.
Most carriers were expected to roll out 5G in second-half 2019, and most deployments are expected to take place in urban areas. According to the Ericsson Mobility report November 2019, the number of VoLTE subscriptions was about 2.1 billion, and will reach 6.4 billion in 2025, accounting for over 85% of combined LTE and 5G subscriptions.
In June 2019, China granted commercial licenses to four state-owned telecom giants (China Telecom, China Mobile, China Unicom, and China Radio and Television) to start rolling out 5G services, indicating Beijing’s determination to be the global leader in setting up superfast wireless networks amid tensions with the USA over technology and trade.
Asia-Pacific to see significant growth
The Asia-Pacific region’s discrete semiconductor industry is driven by China, Japan, Taiwan and South Korea, which together constitute about 65% of the global discrete semiconductor market, while others (like Vietnam, Thailand, Malaysia and Singapore) also contribute significantly to the region’s dominance in the market.
According to the Indian Electronics and Semiconductor Association, the country’s semiconductor component market is expected to reach $32.35bn by 2025, registering a CAGR of 10.1% over 2018-2025. The country is a lucrative destination for global R&D centers. The Indian government’s ongoing Make In India initiative is hence expected to result in huge investments in the semiconductor market.
Over the last few years, the RF industry has received a boost from the implementation of GaN technology. GaN is the main driver in telecom and defense applications. South Korean fabless RF GaN firm WAVEPIA offers cutting-edge GaN systems for RF energy, along with GaN transistors that support the growing telecom and defense markets.
The increasing focus on investments to develop infrastructure, in order to support 5G technology, is expected to lead to a surge in demand for RF semiconductors across the APAC region. For example, according to the GSM Association, mobile operators in the Asia-Pacific region are expected to invest over $400bn in their networks between 2020 and 2025, of which $331bn will be spent on 5G deployments.
The competetive rivalry among the players in the RF GaN market is high due to the presence of some key players such as Raytheon Technologies and STMicroelectronics. Their ability to continually innovate their offerings has allowed them to gain competitive advantage over other players, says the report. Through R&D, strategic partnerships and mergers & acquisitions, these players have been able to gain a strong foothold in the market.
In July 2020, Mitsubishi Electric Corp developed a new technology to realize a GaN power amplifier module for 5G base-stations that offers a combination of compact footprint (6mm x 10mm) and extra-high power efficiency, the latter exceeding an unprecedented rating of 43%. The module, which uses a minimum number of chip components in the matching circuit to control high-quality signal output, is expected to help realize 5G base-stations that are widely deployable and highly power efficient.
In March 2020, STMicroelectronics NV announced an agreement to acquire a majority stake in French GaN innovator Exagan. Exagan’s expertise in epitaxy, product development and application know-how will broaden and accelerate ST’s power GaN roadmap and business for automotive, industrial and consumer applications. Exagan will continue to execute its product roadmap and be supported by ST to deploy its products.