GaN Substrates Market: Future Belongs to Alternatives

Gallium Nitride is the widely used compound semiconductor material in optoelectronics as the epitaxial layer on different substrates. The commonly used substrates for epitaxy are Sapphire, Silicon, and Silicon Carbide. Among these, Sapphire is the predominant substrate accounting for nearly 70% market share. As all good things come to end at a certain time, the dominance of sapphire is too expected to die down and take over by other capable substrates. The market precisely in these terms is very interesting.

According to a recent study by IndustryARC, SiC substrate is estimated to grow immensely in LED and Power Electronics market by remotely substituting the existing substrates by 2020. Contrariwise, gallium nitride substrates are far from gaining significant share. These substrates are slowly emerging owing to tough production process and less yield. Moreover, the prices of these substrates are too high to attract device producers, but hold lot of promise. There is abundant research going on to realize the potential; Disrupting market developments, if any, are expected to surface from both of these segments.

Silicon Carbide is the Champion

In both LEDs and Power Electronics segment, evolution of the SiC substrate is anticipated. The main advantage of SiC devices is less volume, which will help end use products such as electrics vehicles to cut down on the size of the component units and turn more efficient. Toyota Corporation which has consistently expressed interest in wide gap semiconductor products has developed SiC power semiconductor in 2014, which improves fuel efficiency by 10% in electric vehicles. Previously in 2013, Toyota established a facility for research, development and production of SiC semiconductors at its Hirose Plant.

The market is also witnessing key developments from the substrate and device manufacturers as well. Cree Inc. is the pioneer of this technology. It is the one of the key manufacturers making devices on GaN on SiC substrates. It accounts for more than 8% share in the LED market and over 35% share in SiC power electronics market. LEDs account for major part of the company's revenue and the power, RF products are growing segments. At present Cree Inc. Is the only company to manufacture LEDs on SiC substrate, and with remarkable innovations, this company is all set to position itself strongly. In 2013, the company introduced low cost LED bulb and moved onto introducing the third generation bulbs in 2014. Furthermore, in 2014, the company invested in Taiwan LED maker, Lextar Electronics Corporation to increase its capabilities in mid and high power LED chips. In addition to that, the company has also acquired Arkansas Power Electronics International Inc. (APEI) to expand its research and development capabilities in defense, aerospace and hybrid/electric vehicle markets. Thus, the company undeniably is on the right path to accelerate in both LED and Power Electronics markets, which would also enhance SiC substrate penetration. However, the market is estimated to slowly adopt these changes and thus growth is not projected as aggressive. The market for SiC substrates is estimated to be around $209 million in 2014 and is forecast to grow at a rate of 8.6% till 2020.

In addition to Cree, Infineon Technologies AG, market leader in SiC power electronics is also estimated to contribute significantly to development of innovative SiC products. The future of the GaN substrates belongs to these substitutes, the wide gap semiconductor materials, but it is a slow journey.