Compound Semiconductor Market

Compound Semiconductor Market Overview:

The global compound semiconductor market size reached US$ 117.7 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 173.6 Billion by 2032, exhibiting a growth rate (CAGR) of 4.3% during 2024-2032. The need for high-speed electronics, 5G communication, and power-efficient devices, automotive advancements, LED lighting adoption, and emerging applications, including IoT and renewable energy technologies, are propelling the market growth.

Compound Semiconductor Market Analysis:

• Major Market Drivers: The adoption of high-speed and high-frequency communication systems are bolstering the market growth. Moreover, the rising evolution of 5G networks are strengthening the growth of the market.
• Key Market Trends: The increasing importance of energy-efficient solutions is driving the compound semiconductor demand in power electronics. In addition, ongoing compound semiconductor recent developments to enhance the performance and efficiency is propelling the market growth.
• Geographical Trends: Asia Pacific holds the largest segment because of strategic initiatives by governing agencies, along with rising investments in research and development (R&D) activities.
• Competitive Landscape: Some of the major market players in the compound semiconductor industry include Infineon Technologies AG, Microchip Technology Inc., Mitsubishi Electric Corporation, NXP Semiconductors N.V., Onsemi, Qorvo Inc., Renesas Electronics Corporation, STMicroelectronics, Texas Instruments Incorporated, WIN Semiconductors Corp., Wolfspeed Inc., among many others.
• Challenges and Opportunities: While the market faces challenges like complexity in manufacturing processes, which impacts the compound semiconductor market revenue and supply-demand imbalances, it also encounters opportunities in the applications of optoelectronics, encompassing LEDs, lasers, and photodetectors.
   

Compound Semiconductor Market Trends:

High-frequency communication and 5G networks

The National Library of Medicine reports of 2021 shows that the 5G network is projected to reach 40 percent population coverage and 1.9 billion subscriptions by the end of 2024. The rise of high-speed, high-capacity communication systems is a crucial step in the establishment of compound semiconductors. Due to the establishment of 5G infrastructure around the world, these semiconductors operate at high frequencies, and offer a substantial imperial value addition possibility for the supplier. Additionally, the growth of the market is supported by compound semiconductors like gallium nitride (GaN) and gallium arsenide (GaAs), which are displacing elemental semiconductors such as silicon that are unstable at significant frequencies due to their elemental characteristics.

Furthermore, the rising employment of GaN in 5G base stations, radar systems, and satellite communication equipment due to its high electron mobility and robust power handling capabilities is strengthening the compound semiconductor market growth.

Power electronics and energy efficiency

As per the International Energy Agency, the global investment in energy efficiency reached USD 560 billion in 2022, an increase of 16% on 2021. The increasing focus on energy efficiency and the shift towards renewable energy sources is one of the key factors driving the demand for compound semiconductors. For high-temperature and high-voltage applications, materials such as silicon-based semiconductors have certain limitations. However, silicon carbide with higher thermal conductivity and enhanced breakdown voltage helps in facilitating more efficient energy conversion and minimizing power losses, which is projected to propel the market. Furthermore, SiC is being increasingly deployed in electric and fuel-cell vehicles, solar inverters, and industrial motor drives to lower energy use consumption and enhance sustainability, thereby bolstering growth of the compound semiconductor market.

Growing demand for LiDAR

The IMARC Group’s report shows that the global LiDAR market size reached US$ 2.6 Billion in 2023. LiDAR technology, which uses laser light sources to measure distances with high precision, is gaining significance in several high-resolution applications, such as autonomous vehicles, industrial automation, and environmental monitoring. Compound semiconductors, which include materials like gallium nitride (GaN) and indium phosphide (InP), are crucial components in the development of efficient and high-performance laser diodes used in LiDAR systems. Additionally, as LiDAR systems are advancing to be useful in various industries, there is an increase in the demand for advanced semiconductor materials that have a greater power output, can operate at higher temperatures and are more reliable. Compound semiconductors exhibit all these characteristics, resulting in rising adoption of this technology in the upcoming generation of LiDAR systems.

Compound Semiconductor Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global compound semiconductor market report, along with forecasts at the global, regional and country levels from 2024-2032. Our report has categorized the market based on type, product, deposition technology and application.

Breakup by Type:

• III-V Compound Semiconductor
  • Gallium Nitride
  • Gallium Phosphide
  • Gallium Arsenide
  • Indium Phosphide
  • Indium Antimonide
• II-VI Compound Semiconductor
  • Cadmium Selenide
  • Cadmium Telluride
  • Zinc Selenide
• Sapphire
• IV-IV Compound Semiconductor
• Others
   

III-V compound semiconductor dominates the market

The report has provided a detailed breakup and analysis of the market based on the type. This includes III-V compound semiconductor (gallium nitride, gallium phosphide, gallium arsenide, indium phosphide, and indium antimonide), II-VI compound semiconductor (cadmium selenide, cadmium telluride, and zinc selenide), sapphire, IV-IV compound semiconductor, and others. According to the report, III-V compound semiconductor represents the largest segment.

III-V compound semiconductors, such as gallium nitride, gallium phosphide, gallium arsenide, indium phosphide, and indium antimonide, are in high demand. They are required because of the unique material characteristics that allow breakthroughs in niche markets. GaN's exceptional power handling capabilities are driving innovations in high-power electronics, RF amplifiers, and 5G infrastructure. GaAs' high electron mobility supports high-speed devices for wireless communication and aerospace applications, thereby impelling the market growth. Similarly, InP is a fundamental material for high-speed optical communication systems since InSb is used in infrared detectors for thermal imaging. The exclusive performance of these specialized applications relies on III-V compound semiconductors.

Breakup by Product:

• Power Semiconductor
• Transistor
• Integrated Circuits
• Diodes and Rectifiers
• Others
   

Power semiconductor holds the largest share in the market

A detailed breakup and analysis of the market based on the product has also been provided in the report. This includes power semiconductor, transistor, integrated circuits, diodes and rectifiers, and others. According to the report, power semiconductor accounts for the largest market share.

As per IMARC Group’s report the global power semiconductor market reached US$ 43.1 Billion in 2023. The surging demand for power compound semiconductors, such as silicon carbide (SiC) and gallium nitride (GaN), due to their transformative impact on energy efficiency and power electronics is one of the main drivers of the market. Additionally, SiC's high thermal conductivity and breakdown voltage enhance energy conversion in EVs, renewable energy systems, and industrial equipment. GaN's high electron mobility enables compact and efficient power supplies, contributing to smaller form factors in consumer electronics and EV charging systems. As industries seek enhanced performance, reduced energy losses, and greater power density, power compound semiconductors are emerging as crucial enablers, propelling their adoption across a spectrum of applications, aiding in market expansion.

Breakup by Deposition Technology:

• Chemical Vapor Deposition
• Molecular Beam Epitaxy
• Hydride Vapor Phase Epitaxy
• Ammonothermal
• Atomic Layer Deposition
• Others
   

Chemical vapor deposition dominates the market

The report has provided a detailed breakup and analysis of the market based on the deposition technology. This includes chemical vapor deposition, molecular beam epitaxy, hydride vapor phase epitaxy, ammonothermal, atomic layer deposition, and others. According to the report, chemical vapor deposition represents the largest segment.

According to IMARC Group’s report the global chemical vapor deposition (CVD) market is expected to reach US$ 58.3 Billion by 2032. CVD offers exceptional uniformity and precision in depositing thin film materials, essential for high-quality compound semiconductors, which, in turn, is driving the market growth. Moreover, it supports a wide range of materials and is compatible with various substrates, making it a highly versatile method. Besides this, CVD's scalability and efficiency in mass production make it an attractive option for manufacturers, fulfilling the demand for compound semiconductors in various applications such as electronics, optoelectronics, and photovoltaics.

Breakup by Application:

• IT and Telecom
• Aerospace and Defense
• Automotive
• Consumer Electronics
• Healthcare
• Industrial and Energy and Power
   

IT and telecom holds the largest share in the market

A detailed breakup and analysis of the market based on the application has also been provided in the report. This includes IT and telecom, aerospace and defense, automotive, consumer electronics, healthcare, and industrial and energy and power. According to the report, IT and telecom accounts for the largest market share.

The utilization of compound semiconductors in the IT and telecom sector is propelled by their capacity to meet the escalating demand for high-speed data transmission, networking, and wireless communication. These materials, such as gallium nitride (GaN) and indium phosphide (InP), enable the creation of high-frequency, high-efficiency devices critical for 5G infrastructure, satellite communication, and broadband expansion, fueling their adoption across various applications in the IT and telecom industry. GaN's superior power handling characteristics enhance the performance of RF amplifiers and base stations, while InP's exceptional optical properties drive advancements in optical communication systems. As the sector continues to seek faster and more reliable connectivity, compound semiconductors play an integral role in enabling the next era of information exchange and digital transformation.

Breakup by Region:

• North America
  • United States
  • Canada
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

Asia Pacific exhibits a clear dominance, accounting for the largest. compound semiconductor market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific accounts for the largest market share.

The Asia Pacific compound semiconductor market is experiencing significant propulsion due to the region's robust manufacturing capabilities, rapid technological advancements, and burgeoning demand for cutting-edge electronic products. Countries such as South Korea, Taiwan, China, and Japan are emerging as semiconductor powerhouses, fostering a competitive landscape for compound semiconductor production. Besides this, the rising expansion of 5G network in countries like China is driving the demand for compound semiconductor. The State Council of the People’s Republic of China’s report of 2023 shows that nearly 3.22 million 5G base stations were built by the October end in 2023 in China, accounting for 28.1 percent of all its mobile base stations.

Competitive Landscape:

The competitive landscape of the global compound semiconductor market is marked by a dynamic interplay of established players and emerging contenders, fueled by technological advancements and market demands. Key industry leaders hold substantial market shares, leveraging their expertise in research and development (R&D) and manufacturing to offer a diverse range of compound semiconductor solutions. Moreover, collaborations and strategic acquisitions amplify their capabilities, expanding their product portfolios. At the same time, emerging companies are making strides in providing advanced deposition and manufacturing equipment critical for compound semiconductor production. The market's growth is also driven by the convergence of industries such as telecommunications, automotive, and energy, prompting traditional semiconductor giants to enter the domain, intensifying competition. For instance, in 2022, Wolfspeed announced that Lucid Motors deployed its Silicon Carbide power device solutions in its high-performance and pure-electric car, the Lucid Air. They also entered a multi-year agreement to produce and supply SiC devices.

The report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major compound semiconductor companies have also been provided. Some of the key players in the market include:

• Infineon Technologies AG
• Microchip Technology Inc.
• Mitsubishi Electric Corporation
• NXP Semiconductors N.V.
• Onsemi
• Qorvo Inc.
• Renesas Electronics Corporation
• STMicroelectronics
• Texas Instruments Incorporated
• WIN Semiconductors Corp.
• Wolfspeed Inc.
   

(Kindly note that this only represents a partial list of companies, and the complete list has been provided in the report.)

Compound Semiconductor Market Recent Developments:

• In August 2022, Qorvo, Inc confirmed the release of the highest gain 100-watt L-band (1.2-1.4 GHz) compact solution. It is a GaN-on-SiC PAM aimed for commercial and defense radar applications that provides an integrated two-stage amplifier solution with enhanced efficiency. This exceptional performance cuts total system power usage dramatically.
• In August 2022, Infineon Technologies AG entered into a multi-year supply agreement with II-VI Incorporated for wafers. This acquisition of additional access to this vital semiconductor material aims to meet the substantial increase in customer demand in this industry. Furthermore, the deal complements Infineon Technologies AG's approach to multi-sourcing and enhances the resilience of its supply chain.
• In August 2022, Infineon Technologies AG and II-VI Incorporated signed a multi-year supply deal for SiC wafers to fulfill the significant rise in customer demand in this sector.

Compound Semiconductor Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the compound semiconductor market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global compound semiconductor market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the compound semiconductor industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.