The gallium nitride (GaN) substrates market is set to cross $4 billion USD by 2020, according to the market research 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), LEDs, UV LEDs) By Industry (Consumer Electronics, Telecom, Industrial, Power, Solar, Wind)-Forecast(2015-2020)”, published by IndustryARC.
Gallium Nitride (GaN) is a semiconductor compound material which has proved to be advantageous in comparison to the other conventional materials such as Silicon, Silicon Carbide, Aluminum, and so on. GaN substrates are essential materials which are deployed across blue-violet laser diodes in recorders or BD players and the power control elements. GaN materials are also used across optoelectronic products such as lasers, LEDs, Power Electronics and Radio Frequency amplifiers.
Optoelectronics are the key devices that employ GaN substrates, among which, LEDs account for over 70% share. Traditionally, these devices are grown on GaN on Sapphire, GaN on Si, and GaN on Sic substrates with GaN on Sapphire being the most utilized substrate. However, these substrates contain GaN layers grown by epitaxial methods leading to lattice mismatches and defects. In this context, the gallium nitride substrates are presented as the potential substitute for the foreign substrates. The GaN epitaxy if performed on the native substrates has several technical advantages and also improves the performance of the devices.
According to recent study by IndustryARC, the GaN substrates market is dominated by sapphire which is nearing maturity. The market for sapphire substrates was around $ 1.4 billion in 2014 and estimated to grow at 7% CAGR in 2015-2020. The market is estimated to showcase normal growth rates and grow predictably till 2020 and if any disrupting market developments are expected from the silicon and bulk GaN substrate areas. There is only company, Cree Inc. manufacturing GaN on SiC products and very few players adopting GaN on Si. Acquisitions and partnerships are going to be the key in these segments to showcase significant growth in the next five years.
Asia-Pacific is the key region for both substrates and devices market. LEDs, with demand in particular from automotive and lighting industry, are estimated to drive the GaN market in the period 2015-2020. In this, region, Japan, China, and Korea are the key regions where majority of the players are located and demand emerges. The less labor and production costs in these countries are aiding manufacturers to set up production facilities. In 2015, Panasonic Corporation has shifted its LED production to Japan from Indonesia to capitalize these advantages in the country and further grow its share in the LED market. Besides that, the substrate suppliers are also strongly distributed in the region. With these players significantly scaling up their global market position, the prices are estimated to be affected significantly. In countries such as China, the substrates are offered at cheaper prices which will not only attract LED producers significantly but also intensify demand for cheaper products.
The bulk GaN or GaN on GaN substrates hold lot of promise in the LED, Power Electronics, and RF products. Particularly in power electronics, the bulk gallium nitride substrates are proven to be very useful. There is significant research underway to realize the GaN material potential into these industries and very recently, MIT researchers have successfully enabled GaN power transistors at low cost. Due to huge power saving nature of the components made from them, the billion dollar markets such as internet of things and electric vehicles market are only ready to embrace bulk GaN substrates. Thus, with encouraging developments in the market and potential billion markets, bulk GaN is projected as the game changer. But, to realize the same, there are substantial obstacles in terms of production and capital. Therefore, even in 2020, the market is estimated to be dominated by foreign substrates where bulk GaN will account for smaller share.