BOSTON, USA: The latest Strategy Analytics study, "SI GaAs Epitaxial Substrates Markets 2006-2011," forecasts that demand for HBT and pHEMT devices will translate into steady growth for semi-insulating GaAs epitaxial substrates. The market will grow in value at a compound annual average growth rate of (CAAGR) 8 percent through 2011, with North America continuing to be the largest market.

The Asia-Pacific epitaxial market, specifically Taiwan, will become the second largest market for epitaxial substrates, benefiting from consolidation in GaAs manufacturing and IDM (integrated device manufacturer) facility upgrades. There will be a boost in six-inch wafer demand, while the market for four-inch material will decline sharply, by 24 percent over the next two years.

"As predicted last year, we have seen some significant supply chain changes," notes Asif Anwar, Director of the GaAs service. "Our analysis shows that the acquisition of Emcore's epitaxial substrate business, in conjunction with strong growth for its own MBE substrates, placed IQE within 1 percentage point of Kopin in 2006, while the MBE Technology acquisition should push the company into the number one spot in 2007."

"GaAs will remain the mainstream solution for cellular handsets, which will be reflected in the continued demand for epitaxial substrates," predicts Stephen Entwistle, VP Strategic Technologies. "However, we have tempered our demand forecast to reflect die size reductions and the increasing integration capabilities of GaAs processes. Nevertheless revenue growth will remain strong as increasing raw material costs keep wafer price erosion at a minimum."