The Report “Gallium Nitride (GaN) Substrates Market Analysis: By Type (GaN on
sapphire, GaN on Si, GaN on SiC, GaN on GaN); By Products (Blu-ray Disc (BD),
Radio frequency amplifiers, LEDs, UV LEDs); By Industry (Consumer Electronics,
Telecom, Industrial, Power, Solar and Wind ) – With Forecast (2015 - 2020) )”, published
by IndustryARC, the market to cross $4 billion by 2020
Browse 70 Market Tables, 82
Figures spread through 210 Pages and an in-depth TOC on “GaN Substrates Market” http://industryarc.com/Report/1264/GaN-substrates-market-research-report.html.
Bulk
GaN substrate: the most promising and much talked about material
from the last few years, especially in power and opto electronics. It is a wide
gap semiconductor, has high electron mobility, can tolerate higher
temperatures, the devices can be scaled to smaller sizes, and much more. However,
here is the BUT: the substrates are not capable enough to substitute the
existing substrates such as Silicon or
Sapphire. Although technically, the substrates are way too superior to the
existing substrates, lack of market developments/ slower market growth is not
encouraging for bulk GaN to progress forward. The slower market growth and lack
of market developments, we see, is due to:
1.
Lack
of Venture Capital
There are several capable companies emerging
with strong technical expertise. However, as the technologies are complicated, costly
and are highly subjected to market risks, the traditional fund sources are
disinclined to invest in this market. Moreover, it is difficult to convince the
investor on the returns on the investments. Even though the addressable markets
for these materials are valued by billion dollars, the journey to achieve the
goals is difficult, slow and risky. Hence, the market is still waiting for that
one golden hand who can take a chance to become the pantheon of gallium nitride market.
There are players entering into market in
some countries, especially in China, to capitalize the 2-inch substrates area. But,
these companies have lesser volume and are of low quality, not fully capable to
disrupt the market. Due to the lack of investors, some good companies are in
the verge of losing out. Ammono S.A., founded by Robert Dwilinski is one of the
few companies that pioneered production of
gallium nitride substrates. It has unique technology and strong team of technical
experts to its advantage that can produce ‘best’ gallium nitride. However, the company
is out of funds from few years and is struggling to find its foot in the
market. Likewise, if there is company that is strongly pursuing research in
this area, would find it difficult to enter the market. The barriers are too
high. Only sufficient financial reserves can help companies to stride and
survive. For instance, Soraa Inc., the champion of GaN on GaN LED and the sole company to produce devices on bulk GaN,
is believed to positively making sales and remarkable innovation since its introduction.
The key factor is: it is founded by no less than the Nobel Laureate, Shuji
Nakamura, inventor of blue laser. It is relatively easy for the company to raise
funds and already has Khosla Ventures as its investors. After all, he has
proven track record of creating billion dollar markets.
2.
Less
activity from Stakeholders
The Bulk GaN
market has very few players, but there are few well established companies
such as Sumitomo Electric Industries Inc., Mitsubishi Chemical Corporation, and
so on. These companies account for larger share in the market, but there is
little progress in terms of innovation. Moreover, in 2015, the Hitachi Metals,
Ltd has moved out of the market place and sold its compound semiconductor
division to Sumitomo Electric Industries Inc. This acquisition adds great value
to Sumitomo, but it is important to note that Hitachi Metals, Ltd has decided
to sell one of its strong divisions after assessing the future growth potential
of the business. The company must have reached to this decision owing to the
slow growth and fewer profits in compound semiconductor market and sidelined
this business portfolio to spend its corporate resources effectively. Given
that 90% of the bulk GaN production comes from Japan, this acquisition assumes
importance. The market players are not too optimistic to invest and bring
traction in the market. Hence, at this
time, it is very well for the stakeholders to involve in partnerships,
collaborations and acquisitions.
For instance, the substrate makers and the equipment suppliers can make a good
combination to optimize the production process. Likewise, the device
manufacturers can partner/acquire substrate manufacturers. Meaningful
collaborations can generate the necessary traction in the market in the coming
years.
3.
Presence
of Effective Substitutes
The bulk GaN substrate suffers threats from
potential substitute such as Silicon Carbide. This is also a wide gap
semiconductor material which possesses key advantages and is actively
progressing forward. The market for SiC
substrate is positive and good amount of innovation is expected from
manufacturers in the future.
Hence, the GaN market is not estimated to be
aggressive at-least in the next five years and has tough road ahead to become
as ubiquitous as silicon. According to IndustryARC study, bulk GaN market revenue is estimated to constitute only 4% in the
overall GaN substrates market and is forecast to grow at a rate of 11% driven
by demand from power electronics.
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