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Industry News / Manufacturing/Services / Materials/Packages

GaAs Market to Contract

December 18, 2008
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Releasing an update to its ‘GaAs Industry Forecast Through 2012,’ Strategy Analytics maintains its 9 percent growth forecast for 2008 with the GaAs industry growing to $3.9 B from $3.5 B in 2007. However, with a global recession impacting unit growth across nearly all the major end markets, the GaAs industry will see a 5 percent contraction year-on-year in 2009.

Growth will return in 2010, with the GaAs device market growing at a reduced CAAGR (compound annual average growth rate) of 7 percent through 2012, against the previously forecasted CAAGR of 9 percent. Corresponding demand for GaAs substrates will decline by 10 percent in 2009, with growth returning in 2010. Substrate demand will grow at a CAAGR of 4 percent through 2012.

“Negative growth in handset shipments for the next year, along with slowdowns in other markets, will slow GaAs industry growth over our earlier projections,” observed Asif Anwar at Strategy Analytics. “However, we maintain that the overall metrics for the industry remain strong and we're not going to see the industry collapse as it did in 2001.”

Key Strategy Analytics determinations from the updated forecast include:

• Demand from the military sector will not be affected through 2012. They will continue to grow on the back of a strong industry backlog;
• The cellular handset market will continue to drive around 70 percent of GaAs device demand through 2012;
• The Wi-Fi market will still grow to be the second largest market for GaAs in 2012 with the market growing at a CAAGR of 20 percent through 2012.


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