The global compound semiconductor materials market size was valued at USD 32 billion in 2022. It is estimated to reach USD 54.06 billion by 2031, growing at a CAGR of 6.0% during the forecast period (2023–2031). The increasing technological advances in semiconductor products due to rising consumer demand for high-tech products are anticipated to stimulate demand for compound semiconductor materials over the forecast period.
Compound semiconductors are created when two or more elements that belong to different groups on the periodic table or the same group are brought together and combined in some way. It has expanded over the past several years due to the increased demand for applications in electronic and mobile devices. Several different deposition methods, such as chemical vapor deposition, atomic layer deposition, and others, are applied in the production process to manufacture the compound semiconductor. A higher resistance to high temperatures, enhanced frequency, a bigger band gap, and faster operation are some of the key benefits that will drive demand for compound semiconductor materials market in the future.
Compound semiconductors are expected to continue to be in high demand. Compound semiconductors offer distinguishing properties such as these, which will be among the elements driving demand in the future. A great number of providers are focussing their efforts on the development of new technologies for compound semiconductor products as well as the manufacture of application-tailored goods that are sold at competitive prices.
The global semiconductor industry is expanding due to the demand for electronic devices. Semiconductors are the driving force behind technological innovation and advancement, with mainstream electronics consisting predominantly of semiconductor packages and surface mount technology processes. The production of microelectronic devices involves a series of stages, including the deposition of thin films, prototyping, selective etching, and modification. With varying parameters and patterns, hundreds of circuits containing hundreds of millions of functional components can be produced on a single wafer. Before semiconductors are installed in end-user devices, physical vapor deposition processes, such as sputtering and evaporation, provide hard, wear-resistant coatings.
Several key trends are anticipated to propel the global expansion of the semiconductor industry. One such trend is the expanding use of artificial intelligence (AI) across various industries, which presents growth opportunities for semiconductor manufacturers and suppliers. The reduction of corporate tax rates from 35% to 21% is anticipated to improve the business climate for the development of the U.S. semiconductor industry, positively impacting the demand for compound semiconductor materials.
The compound semiconductor materials market is primarily propelled by adopting new product designs and specifications in the semiconductor manufacturing industry. Compound semiconductor materials are an integral component of electronic hardware and are utilized in the design and development of electronic equipment. The miniaturization of electronic devices has resulted from the increased demand for portable devices such as iPods, mobile phones, laptops, and portable measuring and testing equipment. Through the development of new materials and associated process techniques, advancements in assembly technologies and miniaturization of these electronic products are realized.
Increasing technological advances in semiconductor products due to rising consumer demand for high-tech products are anticipated to stimulate demand for compound semiconductor materials over the forecast period. Numerous initiatives undertaken by various manufacturers to provide advanced electronic materials to enhance their application in semiconductor and other electronic applications are anticipated to be key factors propelling compound semiconductor materials market growth over the forecast period. Demand for new electronic materials, such as organic and compound semiconductors, will likely increase as the demand for energy-efficient electronic equipment grows.
The increasing demand for compound semiconductor materials used in consumer and industrial electronic product production has been a key factor propelling market expansion. However, health and environmental risks associated with the production and use of these products are anticipated to be significant market restraints. Electronic equipment has numerous toxic halogenated compounds, heavy metals, and radioactive substances. Arsenic is used to produce Gallium Arsenide (GaAs), one of the most widely used products. Arsenic is regarded as a highly toxic substance because exposure to it can result in severe diseases such as lung cancer.
Similarly, beryllium is a carcinogen, and protracted exposure to the chemical can result in several skin diseases. Beryllium is predominantly used to dope Gallium Nitride (GAN). In addition, chlorofluorocarbons used in producing insulation foam and refrigeration equipment, such as refrigerators, tend to accumulate in the stratosphere and harm the ozone layer. This can increase the prevalence of genetic damage and cutaneous cancer in organisms.
Combining technologies that offer efficiency, performance, and value is required for the base stations utilized in 5G wireless networks. GAN solutions are an absolute requirement to provide these attributes to the customer. Compared to Laterally Diffused Metal-Oxide Semiconductors (LDMOS), GAN-on-SIC provides 5G base stations with significant increases in both efficiency and performance. In addition, GAN-on-SIC has improved thermal conductivity, outstanding endurance and reliability, better efficiency at higher frequencies, and comparable performance in a tiny MIMO array. GAN is anticipated to improve power amplifiers for all network transmission cells (micro, macro, pico, and femtohm/home routers). Consequently, GAN could substantially impact the rollout of the subsequent generation of 5G.
| Study Period | 2019-2031 | CAGR | 6% |
| Historical Period | 2019-2021 | Forecast Period | 2023-2031 |
| Base Year | 2022 | Base Year Market Size | USD 32 Billion |
| Forecast Year | 2031 | Forecast Year Market Size | USD 54.06 Billion |
| Largest Market | Asia-Pacific | Fastest Growing Market | North America |
Based on region, the global compound semiconductor materials market share is bifurcated into North America, Europe, Asia-Pacific, Central and South America, and the Middle East and Africa.
Asia-Pacific is the most significant global compound semiconductor materials market shareholder and is estimated to exhibit a CAGR of 4.6% over the forecast period. The consumer electronics market in Asia-Pacific countries, including China, India, Japan, Indonesia, and Malaysia, is experiencing high penetration due to technologically advanced products. Rapid urbanization and rising disposable income are expected to expand consumer electronics users further, promoting the scope of compound semiconductor materials. Technological developments, such as the miniaturization of smartphones, TVs, laptops, and air conditioners, are driving the industry. Government initiatives in India, the largest producer of household appliances, are also boosting the compound semiconductor materials market growth. The demand for compound semiconductor materials for major appliances, such as refrigerators, washing machines, and air conditioners, is expected to grow. The manufacturing sector in the region is influenced by low labor costs, land availability, and high domestic demand, attracting foreign manufacturers to invest in the manufacturing sector.
North America is anticipated to exhibit a CAGR of 3.3% over the forecast period. Expanding the end-use industries in the United States, Canada, and Mexico drives the demand for compound semiconductor materials in the region. Moving closer to the area, foreign manufacturers must expand their target markets, encouraging capacity growth and acquisitions. For instance, the Canadian company Solantro Semiconductor was purchased by Huada Semiconductor, a Chinese market leader in industrial semiconductor solutions. Advanced integrated circuits are being developed by Solantro Semiconductor using silicon and other compound semiconductor materials. The goal of the acquisition was to increase investment in the company, benefit from the availability of technology in the area, and broaden its presence in North America. The area is also experiencing capacity increases; in Champaign, Illinois, II-VI EpiWorks opened an addition to its center of manufacturing excellence. The plant produces epitaxial wafer products for compound semiconductor fabrication. The goal of this expansion is a four-fold increase in production.
Europe's automobile industry is anticipated to be a significant end-use market. Compound semiconductor materials are growing rapidly in the region thanks to new technologies like artificial intelligence, electrification of cars, and digitization. Additionally, rising sales of large and small appliances in the area, particularly built-in large appliances, are anticipated to affect market expansion positively. Over the period, demand for compound semiconductor materials is anticipated to increase due to rising IC production for manufacturing household appliances, small kitchen appliances, electronic toys, and smart consumer wearables.
In Central and South America, according to the Organization for Economic Co-operation and Development, Brazil's growth is expected to increase significantly due to strengthening private consumption and the labor market. Throughout the projected period, the region is anticipated to be sustained by end-use industries such as electronics, aerospace, defense, and healthcare. The electronics sector is expected to rise due to increased infrastructure development and industrial expansion, which will increase demand for compound semiconductors. Good government policies and rising investments are having a good effect on market expansion.
In the Middle East and Africa, the market for compound semiconductor materials is still in its infant stages of commercialization. However, the region is experiencing expansion in several industries, including healthcare, aerospace, and telecommunications. It is anticipated that countries such as the United Arab Emirates, Saudi Arabia, and South Africa will be the primary drivers of market growth in the years to come as a result of their investments in the development of infrastructure and technology developments.
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The global compound semiconductor materials market is bifurcated into products and applications.
Based on the product, the global compound semiconductor materials market is bifurcated into Group IV-IV, Group III-V, and Group II-VI.
The Group III-V segment dominates the global market and is predicted to exhibit a CAGR of 4.0% during the forecast period. Group III-V compound semiconductors combine elements from groups III and V with elements like boron, aluminum, gallium, indium, nitrogen, phosphorus, arsenic, and antimony. These semiconductors operate at high frequencies and exhibit high efficiency in light emission. Examples include GaAs, InAs, InSb, GaP, GaN, and InN, with GaAs being the most common. These semiconductors are used in transistors, LEDs, lasers, and solar cells and have growth opportunities in 5G, IoT, and smart vehicles. Group III-V compound semiconductors have excellent mobility and photon-electron conversion efficiency. They can be mixed, resulting in subtle changes in optical properties.
GaN has become a popular compound in the power electronics industry due to its higher power density, higher switching frequency, reduced energy costs, and lower system costs. Companies are investing more in R&D and production capacities, with integration with silicon technology being a significant development. The growing demand for Group III-V compound semiconductors, especially GaN, and the growth in end-use industries like 5G are expected to influence market growth positively.
Based on application, the global compound semiconductor materials market is bifurcated into electronics and consumer goods, aerospace and defense, telecommunication, and others.
The telecommunication segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 4.6% over the forecast period. Semiconductors are a key component of integrated circuits and are important to international communication networks. Given the explosive rise of mobile devices and wireless communication, expanding data traffic and putting higher-speed networks in place is imperative. Due to their great speed and efficiency, compound semiconductors like GaAs are increasingly being employed in telecommunications. GaAs and other Group III-V semiconductors are favored because of their enhanced electron mobility.
Mobile devices demonstrate the limits of silicon-based CMOS semiconductors, such as temperature concerns. To get around these problems, businesses are integrating silicon with compound semiconductors. GaN and other III-V semiconductor materials are predicted to become more prevalent as smaller transmission systems with lower power and cost may be built.
