GaN Semiconductor Devices Market across Defense and Aerospace Industries

GaN Semiconductor Devices Market is largely consolidated, with the top four companies commanding a share of over 65% of the overall market in 2015, states Transparency Market Research (TMR) in a new report. The dominant company among these four top vendors, Efficient Power Conversion Corporation, accounted for a 19.2% share of the global market in the said year. The other three topmost companies of the global market, which collectively enjoyed a considerably large share in the overall global market in the said year, are NXP Semiconductors N.V., GaN Systems Inc., and Cree Inc.

Looking at the on-going research and development activities undertaken in the market, attempts made to eliminate issues related to reliability of GaN semiconductors is expected to be an important area of focus of key vendors in the near future. Transparency Market Research states that the global GaN semiconductor devices market will expand at a high 17.0% CAGR over the period between 2016 and 2024. With such exponential growth, the market, which had a valuation of US$870.9 mn in 2015, is projected to rise to US$3,438.4 mn by 2024. Of the key end-use industries utilizing GaN semiconductors, the aerospace and defense sector dominates, accounting for a share of over 42% of the global market in 2015.

Demand in North America and Europe

North America and Europe are presently the dominant regional markets for GaN semiconductor devices and are expected to retain dominance over the next few years as well. The rising focus of the Europe Space Agency (ESA) on the increased usage of GaN semiconductors across space projects and the use of GaN-based transistors in the military and defense sectors in North America will help the GaN semiconductor devices market gain traction.

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In the past few years, GaN technology has witnessed rapid advancements and vast improvement in the ability of GaN semiconductors to work under operating environments featuring high frequency, power density, and temperature with improved linearity and efficiency. These advancements has boosted the usage of GaN semiconductor devices across an increased set of applications and have played an important role in the market’s overall growth lately.

Along with this factor, the increased usage of GaN semiconductor devices in the defense sector has also emerged as a key driver of the global GaN semiconductor devices market. The continuous rise in defense budgets of developing and developed countries as well as the demand for inclusion of the technologically most advanced products in the arsenal of national and international armies will propel the global GaN semiconductor devices market in the near future.

Relatively Higher Costs of GaN Semiconductor Devices to Hinder Market Growth

GaN semiconductors are relatively expensive as compared to silicon-based semiconductors owing to the high production costs of gallium nitride as compared to silicon carbide. Further addition in the cost of GaN semiconductors is ensued due to the high cost of fabrication, packaging, and support electronics. Silicon-based semiconductors have witnessed a significant decline in their costs over the past few years, making high cost of GaN semiconductors a foremost challenge that could hinder their large-scale adoption.

The issue can be tackled by producing GaN in bulk. However, there is currently no widespread method that can be used for the purpose owing to the requisition of high operating pressure and temperature and limited scalability of the material.

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GaN Semiconductor Devices Market-Trends and Forecast 2016-2024

Owing to characteristics such as high resistance to temperature, low power consumption, better thermal stability, high breakdown voltage, and high electron mobility, GaN semiconductors are widely acknowledged as a green technology across numerous industries. GaN semiconductor devices are being heavily used in light emitting diodes (LEDs), power electronics, and radio frequency (RF) amplifiers owing to their unique properties. With advancement in the GaN technology and reduction in costs, the use of GaN semiconductors is expected to substantially rise across an increasing number of commercial application areas in the near future.

Transparency Market Research pegs the growth opportunity of the global GaN semiconductor devices at US$3,438.4 mn by 2024. The market, which had a valuation of US$870.9 mn in 2015, is expected to exhibit an exponential CAGR of 17.0% over the period between 2016 and 2024 to achieve this feat.

Defense and Aerospace Industries Continue to Dominate; Healthcare Industry to Present Novel Growth Opportunities

Of the key end-use industries utilizing GaN semiconductor devices, applications across the defense and aerospace industry are the dominant contributor to the overall market revenue presently. In 2015, this end-use segment accounted for a share of more than 40% of the overall market. GaN-based transistors find enormous demand across a variety of applications in the defense industry. Applications such as electronic warfare, radar communication, and improvised explosive device (IED) jammers are expected to lead to a sustainable rise in demand for GaN semiconductor devices in the sector in the next few years as well. Consistently rising defense budgets across developed and developing economies will help fortify the trend.

New application areas and potential markets for the usage of GaN semiconductors are being explored across the globe, which is expected to grant momentum to the market in the near future. The medical industry, for instance, is expected to emerge as an eminent end-user of the market in the near future. Recent discoveries, such as the confirmation that GaN can be safely used in biomedical implants, will aid market’s development in this direction.

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North America and Europe to Remain Most Influential Regional Markets

The market for GaN semiconductor devices in North America presently commands the dominant position in the global market. In terms of revenue, the North America GaN semiconductor devices market accounted for a share of 30% of the global market in 2015. Over the next few years as well, the North America market is expected to expand at an excellent pace, driven primarily by the rising use of GaN-based transistors in the military and defense sectors in the region. Moreover, the rising demand for LEDs in consumer electronic products such as smartphones, gaming devices, laptops, and has further boosted the demand for GaN semiconductor devices in the region.

Trailing the North America market, the Europe market for GaN semiconductor devices is also expected to witness strong growth in the years to come. The European Space Agency (ESA) has identified GaN as a ‘key enabling technology’ for space and has founded the GREAT2 (GaN reliability enhancement and technology transfer) initiative to focus on the manufacture of efficient GaN devices for several space applications in the future years. Moreover, the GaN semiconductor devices market is also expected to benefit from the increased use of GaN high performance amplifiers in the region’s telecommunications industry. The Asia Pacific GaN semiconductor devices market is chiefly driven by the flourishing consumer electronics industry and the rising demand for affordable mobile devices.

The global GaN semiconductor devices market features a largely consolidated competitive landscape, with the top four vendors accounting for a share of over 65% of the overall market in 2015. Efficient Power Conversion Corporation, NXP Semiconductors N.V., GaN Systems Inc., and Cree Inc. are these top four companies in the market. Other key vendors in the market are Mersen S.A., Avogy, Inc., Fujitsu Limited, Toshiba Corporation, and Renesas Electronics Corporation.