LED applications will drive the bulk GaN market

Reviewing the incumbent technologies for freestanding/Bulk GaN substrates manufacturing and their trends, the report include scenarios, key driver for future Bulk GaN substrates market, market volume and revenue forecasts until 2020. In either a cautious or a more aggressive scenario, LED applications will certainly be the key drivers for the bulk GaN market.

According to Yole Développement, there is no doubt that LED technology will take market share over the traditional lamp and tube business. The recent announcements from LED makers (> 150 lm/W now in production) are proving that the performance roadmap is in line with expectations: LED does as well and even better than traditional bulbs and tubes.

Allowing for further improvement of LED performance, native bulk GaN is emerging as an alternative to sapphire or silicon. Mass adoption of GaN wafers remains hypothetical, despite potential performance benefits for UHB-LEDs. Taking into account the historical price reductions of bulk GaN substrates, a base scenario outlines where the GaN on GaN LEDs will be limited only to niche markets.

Dr Hong Lin, Market & Technology Analyst, Compound Semiconductors, at Yole Développement, commented: “If the GaN industry succeeds in replying to the cost pressure from LED makers and the price of 4” GaN wafers falls below the breakeven price, a more significant adoption could be forecast... about three times difference in terms of market volume.”

Now representing the largest market for blue LD applications, the Blu-ray applications market will increase in the short term with the arrival of the new generation game stations. In the opinion of Yole Développement , this growth will not persist, as more and more people will play games and watch movies online instead.

Blu-ray applications now represent the largest market for blue LD applications. This market will increase in the short term with the arrival of the new generation game stations. However, Yole Développement believes that this growth will not persist, as the adoption of playing games and watching movies online increases.

Despite rapid development of blue and green laser diodes, Yole Développement sees two scenarios for the adoption of GaN based laser diodes for the emerging projector market, with the price of LDs as the essential factor to consider.

Combining all applications, the demand for 2” GaN substrates will be more than 2 times higher in the aggressive scenario than in the base scenario. In the best case, the demand would keep relatively stable until 2020.

Non polar and semi polar substrates have been proposed for LD manufacturing in R&D. The semi polar approach seems to be the most promising in terms of device performance, however in practice, c-plane based devices still have better performance.

Non polar and semi polar substrates have attracted significant attention. However, the substrate size is still very small and unsuitable for mass production.

As of today, the GaN substrates market is currently heavily concentrated with 87 % held by Japanese companies. Non-Japanese players are currently in small volume production or in R&D stage, too early to challenge the market leaders. Without exception, Japan will continue to dominate the Bulk/FS GaN market for the coming years.

The GaN power device industry probably generated less than $2.5M in revenues in 2012. However, overall GaN activity has generated extra revenues as R&D contracts, qualification tests, and sampling for qualified customers was extremely buoyant. 16 out of 20 established power electronics companies are involved or will be involved in the GaN power industry.

Among the numerous substrates proposed for GaN power devices, bulk GaN solution is definitely beneficial to the device performance. However, Yole Développement remains quite pessimistic that bulk GaN could widely penetrate the power electronics segment unless 4” bulk GaN wafers can be in the $1,500 range by 2020.

The main reason is that, GaN power devices are positioned as a cost-effective solution, between incumbent Silicon and the ramping-up SiC technologies. If the $1,500 cost cannot be reached, then Yole Développement assumes no bulk GaN substrate will penetrate this market.