Strategy Analytics was at CS International 2015 last week, held in Frankfurt, Germany. Eric Higham, Director of Strategy Analytics’ Advanced Semiconductor Applications (ASA) service kicked off proceedings with insights into the challenges and prospects for GaAs and other RF technologies as increasing data consumption translates to ever more sophisticated cellular terminal front-ends. In what became the most oft-repeated phrase of the conference, Eric detailed our analyses on the prospects for “the barbarian at the door” aka silicon displacing GaAs. This was followed by presentations from Peregrine Semiconductor, Qorvo and Skyworks who collectively affirmed Eric’s assertion of increasing RF content but with no one technology providing a one-stop solution.
Over the two days, there was a packed schedule with in-depth sessions on power electronics, optoelectronics, III-V CMOS and solid-state lighting. Some of the highlights included:
· Presentations from EPC Corporation and Dow Corning detailed the potential for GaN-on-Silicon and SiC for the power electronics sector respectively. EPC detailed the work the company has done in eliminating the limitations imposed by packaging on GaN-on-Si power electronics components to potentially enable cheaper and both higher performance and lower cost compared to incumbent MOSFET technology.
· DARPA summarised the research that the organization has been doing on GaN through the activities such as the NEXT program, detailing results from companies involved in this program as well as other research efforts. This included results for a GaN power amplifier operating at L-band frequencies with efficiencies far surpassing conventional GaAs technologies, and the passing suggestion that GaN could eventually make its way into cellular terminals. Progress on the Diverse Accessible Heterogeneous Integration (DAHI) Foundry Technology program aims to provide designs that could incorporate for example, GaN for high power, InP for low noise etc., built on top of digital silicon circuitry to enable the “best junction for the function”.
Strategy Analytics (yours truly) also headed up the last conference session on RF Electronics with a presentation from the Advanced Defense Systems (ADS) service exploring the changing requirements across radar, EW, communications and other defense systems, discussing the impact these trends will have on enabling technologies including GaAs, GaN, and TWTs.
Solid-state technologies have typically been divided between solutions that are able to operate across a broad range of frequencies and those able to provide high output powers. Vacuum tube-based solutions on the other hand have been able to provide the widest range of capabilities with broadband performance coupled with high output powers, and are generally able to offer higher overall system efficiencies. Strategy Analytics forecasts spending on defense systems will approach $140 billion by 2023, translating into a substantial opportunity for component technologies suitable for radar, communications, EW and other military/defense applications.
I presented on the changing budgetary picture that is changing the dynamics on a global basis with the Asia-Pacific region expected to dominate defense spending growth over the next ten years. A key driver for this will continue to be an emphasis on gaining differentiation through technology, irrespective of whether armed forces are dealing with symmetric, asymmetric or hybrid conflicts. This has been demonstrated throughout history with military technologies that have enabled capabilities such as stand-off capability, force projection, stealth and intelligence. This remains true for today’s environment also, but increasingly need to be underpinned by a need to be cost effectiveness in light of a tightening budgetary environment.
Military radar spending will approach $19 billion with the implementation of AESA technology is enabling the development of systems that can support multifunctional operations underpinned by solid state technologies such as GaAs and GaN that enabling scaling of these systems across a range of domains and platforms.
Electronic warfare systems are also evolving to enable control of an increasingly complex spectrum environment. It is clear that the argument for stealth in lieu of EW capabilities is no longer holding up to scrutiny and there will be renewed investment in EW systems over the next ten years with technologies that can suport wideband, high power, sensitivity, selectivity and digital control alongside AESA principles to underpin future system designs in a market that will grow to approach $11 billion.
Finally, military communications trends were also discussed with a move towards higher operating frequencies, multi-band and multi-mode operation, a focus on IP-based data-centric operations underpinned by the flexibility to be able support ad hoc network creation in the field. In many respects, these trends are following some of the developments in the commercial sector driving a need for high power, linear and efficient technologies. Based on forthcoming research, Strategy Analytics estimates that the military communications market will exceed $35 billion in 2024.
Finally there are emerging opportunities emerging for high power RF systems that can support a range of emerging mission requirements for applications such as directed energy.
While defense budgets are uncertain, technology has a direct impact on force effectiveness. There are a range of technologies to enhance capabilities across radar, EW, communications and other military systems, so expect more of the defense budget to go into electronics. Off course no one technology will be the panacea for all requirements so incumbent technologies such as vacuum technologies will continue to be used. However, it is clear that architectural changes supporting a move towards requirements such as broadband performance, higher frequencies and digitization will support use cases for compound semiconductor technologies, so we should expect the III-V content in military electronics to increase over the coming years with for example, the combined market for GaAs and GaN approaching $900 million by 2019.
Merger and acquisition activity in the defense industry was also prominent with ATK and Orbital agreeing to combine to become Orbital ATK, Inc., a new $4.5 billion space, defense and aviation systems manufacturer. Harris Corporation and Exelis, Inc. also announced a definitive agreement which will result in Harris acquiring Exelis for $4.75 billion. However, the largest deal was strictly speaking not focused on the defense industry as NXP Semiconductors entered into an agreement to buy Freescale Semiconductor and merge operations in a deal that will result in a combined company valued at over $40 billion.
Freescale had made a reasonable start towards carving out a position in the defense sector with an emphasis on establishing a dedicated portfolio. The combined company’s ability to compete in the US military sector will now remain limited unless NXP positions the Freescale and NXP high power RF defense offerings as part of a US subsidiary or as it appears to be more likely, spin out and sell the operations outright. This does seem to be the way things are progressing so it will be interesting to see who will acquire these operations and how this new high power RF company will fit into the future defense semiconductor supply landscape.