Compound Semiconductors Used in 5G and EVs
The author is an analyst of NH Investment & Securities. He can be reached at hwdoh@nhqv.com. -- Ed.
The power & compound semiconductor equipment market is to expand 59% y-y next year. The use of compound semiconductors such as SiC and GaN in 5G, EVs, and industrial facilities, amongst others, is to be in full swing. With the market size growing rapidly, related players are to draw attention.
Power and compound semiconductor equipment markets to grow rapidly from 2021
SEMI is projecting that power and compound semiconductor equipment spending in 2021 will reach US$6.9bn (+59% y-y). Compound semiconductors are manufactured using wide band gap (WBG) materials such as silicon carbide (4H-SiC) and gallium nitride (GaN). GaN and 4H-SiC boast band gaps of 3.4eV and 3.2eV, respectively, levels higher than that (1.1eV) for silicon. As compound semiconductors can withstand voltages 10x larger than silicon-based semiconductors, they are being used in 5G, industrial equipment, and EVs.
Market research firm Yole forecasts that the SiC power semiconductor market will expand at a CAGR of 29%, reaching US$2bn by 2024. We point out that wafer production technology is an important consideration in compound semiconductor manufacturing. GaN semiconductors are produced by growing (via MOCVD) GaN epitaxial layers on a substrate. SiC epitaxial wafers are made by depositing a SiC single crystal layer (with a thickness of few micrometers) onto a polished wafer.
Cree, Rohm, STMicro, Veeco, and RFHIC are all investing in compound semiconductors
SiC wafers are made by several players, including Cree, Infineon, and Rohm. In Korea, SK Siltron, which has acquired Dupont’s SiC wafer division, is investing in the SiC arena. With SiC wafers now in short supply, Cree is aiming to boost its capacity by 30x by 2024 and to invest $1bn to support its GaN business.
With its SiC chipset-related sales having hit US$200mn in 2019, STMicro is targeting the figure to reach US$1bn by 2025. Meanwhile, Veeco makes MOCVD equipment used in GaN transistor deposition processes, and RFHIC is a domestic GaN chipset-related firm producing GaN transistors for communications and defense purposes.