The global compound semiconductor market value surpassed USD 43.23 Billion in 2022 and is expected to hit over USD 119.13 billion by 2032 with a registered growth at a compound annual growth rate (CAGR) of around 11.08% during the forecast period 2023 to 2032.
Key Takeaway:
Growth Factors
Increased demand for compound semiconductor epitaxial wafer especially in consumer electronics industry along with the advantages offered by the compound semiconductor wafers over silicon-based wafers are the prominent factors that drive the overall market growth. Light Emitting Diodes (LEDs) are one of the most common applications of compound semiconductor. Today, LEDs have replaced various light sources such as fluorescent bulbs, incandescent bulbs, and CFLs. Moreover, they have significant penetration in automotive lighting, general lighting, and signage displays. The compound semiconductors used in LEDs are made from group III and group V elements of the periodic table commonly known as III-V materials. In addition, rising trend towards application of wafers in automotive sector again propels the market growth to some extent.
Besides this, high cost of wafer manufacturing pose significant threat to the market growth of compound semiconductor. An average expenditure required per compound semiconductor is much more than the expenditure required per pure silicon semiconductor device. This is mainly due to the complex and advanced technologies employed at every stage of manufacturing process. Nevertheless, increasing implementation of compound semiconductors in smart technologies as well as rising penetration of Internet of Things (IoT) in wafers are the prime factors expected to fuel the market growth during the forecast period.
Market Dynamics:
Drivers:
Rising demand from automotive industry
The rapid development of electric vehicles is one of the primary factors to drive the growth of the market by boosting the demand for compound semiconductors. Compound semiconductors such as Gallium Nitride and Silicon Carbide offer higher energy efficiency, faster switching and better thermal conductivity for electric vehicles. This enables higher energy conversion and longer driving range along with rapid charging times. The increasing connectivity requirements in modern vehicles, such as 5G-based telematics and advanced infotainment systems demand high speed data transmission. Compound semiconductors provide excellent performance with low latency. Thus, the rising demand from automotive industry is observed to drive the growth of the market.
Increasing penetration in consumer electronics devices
The consumer electronics sector is one of the earliest adopters of various types of semiconductors. Similarly, compound semiconductors have significant potential in consumer electronics devices. The need for higher performance, miniaturization and power efficiency promotes the application of compound semiconductors in consumer electronics devices. Compound semiconductors also offer longer battery life and reduced power consumption. Thus, the increasing penetration of compound semiconductors in consumer electronics devices is observed to act as a driver for the market’s growth.
Restraints:
Lack of standardization
Standardization for the manufacturing process can help streamline the compound semiconductor supply chain by ensuring compatibility between different components and reducing the risk of material obsolescence. Due to lack of standardization, manufacturers may need to maintain multiple supply chains or invest in costly customization to meet specific requirements. Moreover, the absence of standardized manufacturing processes for compound semiconductors can lead to inconsistent production, this also limits manufacturers from entering into the market. All these factors associated with the lack of standardization create a restraint for the market’s expansion.
Costly and complex testing
Testing of semiconductors is a crucial stage during the manufacturing process. The complicated structure of compound semiconductors makes it more complex and costly to test. Testing compound semiconductors is an expensive process due to the specialized equipment, materials and expertise required for the same. As the product is emerging in the global industry, developing an appropriate and adequate testing method has become a task. Test engineers need to understand the specific behavior of compound semiconductors to design effective testing protocols. Thus, the costly and complex testing process restrains the market’s expansion.
Opportunity:
Emphasis on boosting 5G infrastructure
Compound semiconductors, particularly GaN, have excellent power amplification capabilities. They can deliver high power outputs while maintaining efficiency, making them ideal for 5G base stations and deployments. 5G technology utilizes millimeter-wave frequencies for ultra-high-speed and low-latency communications. Compound semiconductors, such as gallium arsenide and indium gallium arsenide are well suited for such applications due to their high electron mobility and low noise characteristics. To conclude, the demand for 5G infrastructure highlights the requirement for compound semiconductors. Thus, the emphasis on boosting 5G infrastructure is observed to create a set of opportunities for the market’s expansion.
Challenge:
Manufacturing limitations
Compound semiconductor manufacturing processes are complicated and require specialized equipment as compared to the production of traditional semiconductors. Higher costs can limit the adoption of compound semiconductors by making it less appealing for the consumers and the overall industry. The manufacturing facilities for compound semiconductors are relatively limited, the scarcity of manufacturing capacity, supply chain constraints and higher costs slow down the manufacturing pace by creating a challenge for the market.
Application Insights
IT & Telecom accounted for the major market value share of nearly 43% in 2022 and expected to witness substantial growth over the analysis period. This is attributed to rising demand for semiconductor elements in wireless and mobile communications. High efficiency and speed offered by the compound semiconductor over silicon semiconductors are the prime factor driving its application in advanced communication technologies. Furthermore, integration of numerous up-coming technologies such as IoT, artificial intelligence, and machine learning are creating more need for the usage of high-speed semiconductor devices, thereby influencing positively for the market growth of compound semiconductors.
On the other hand, consumer electronics projected to register the most lucrative growth rate during the forecast period. Increasing end-use applications such as LED, mobile phones, and television, and other entertainment devices predicted to contribute for the significant market growth.
Regional Insights
The Asia Pacific captured maximum revenue share of nearly 53% in the global compound semiconductor market in 2022. In addition, the region analyzed to witness the highest growth over the forecast period. This is mainly due to the escalating demand of consumer electronic products along with significant penetration of wireless communication technologies in the region. The region encountered prominent growth potential for the new and advanced technologies as well as shifting consumer trend towards smart and innovative solutions has remarkably driven the regional growth in the recent past and projected to continue the same over the coming years.
Statistics, investment, and manufacturing data:
Key Companies & Market Share Insights
The global compound semiconductor market is highly fragmented and competitive in nature due to rapidly changing consumer preferences. Companies present in the market are mainly focusing on differentiating from a product offering standpoint. They are also focused towards acquiring core competencies associated to varied service offerings by different methods that include vertical integration, mergers & acquisitions, and strategic alliances across the value chain.
Some of the prominent players in the compound semiconductor market include:
Report Scope of the Compound Semiconductor Market
| Report Highlights | Details |
| Market Size by 2032 | USD 119.13 Billion |
| Growth Rate from 2023 to 2032 | CAGR of 11.08% |
| Largest Market | Asia Pacific |
| Fastest Growing Market | North America |
| Base Year | 2022 |
| Forecast Period | 2023 to 2032 |
| Segments Covered | Deposition Technology, Type, Product, Application, Region |
| Companies Mentioned | Nichia Corporation, Cree Inc., Qorvo, Samsung Electronics, Taiwan Semiconductor Manufacturing Company Ltd., STMicroelectronics NV, NXP Semiconductor N.V., Texas Instruments Inc., Renesas Electronics Corporation, and Infineon Technologies AG |
Segments Covered in the Report
This research study encompasses comprehensive assessment of the marketplace revenue with the help of prevalent quantitative and qualitative intelligences, and prognoses of the market. This report presents breakdown of market into major and niche segments. Furthermore, this research study gauges market revenue growth and its drift at global, regional, and country from 2020 to 2032. This report comprises market division and its revenue valuation by categorizing it depending on deposition technology, type, product, application, and region:
By Deposition Technology
By Type
By Product
By Application
By Regional Outlook
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