Epitaxial Wafer Market for Compound Semiconductors Size, Share & Trends Analysis Report By Application (CS Power Electronics, CS RF/Microwave, CS Photonics, CS Sensing, CS Quantum), By End User (Digital Economy, Industrial and Energy & Power, Defense/Security, Transport, Consumer Electronics, Healthcare, Space) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global epitaxial wafer market size for compound semiconductors was valued at USD 3.77 billion in 2022. It is projected to reach USD 11.7 billion by 2031, growing at a CAGR of 13.4% during the forecast period (2023–2031).

Epitaxial growth (epitaxy) to be used in photonics, microelectronics, spintronics, and photovoltaic, among other applications, makes up a compound semiconductor epitaxial wafer. Their epitaxial layers determine compound semiconductor epitaxial wafers' wireless, photonic, and electronic performance. These wafers are then processed to create chips and integrated circuits (ICs) used in various technological devices and gadgets. A polished wafer is covered with layers of single silicon carbide crystals several micrometers thick to create an epitaxial wafer. To enable its seamless production, precise control of thickness, carrier concentration, and defect density is needed. Their epitaxial layers determine compound semiconductor epitaxial wafers' wireless, photonic, and electronic performance. These wafers are then processed to create chips and integrated circuits (ICs) used in various technology products and gadgets worldwide. A compound semiconductor is created using deposition technologies from elements of two or more different periodic table groups. Due to their unique characteristics, such as their wide band gap, high operating temperatures, high current & voltage holding capacity, and capacity to produce microwave signals, semiconductor-based devices are crucial parts of most electronic circuits.

Market Dynamics

What are the main factors driving the epitaxial wafer market for compound semiconductors?

Increase In Demand for Compound Semiconductor Epitaxial Wafer in LED Technology

Microelectronics, photovoltaics, and photonics are just a few applications that use epitaxial wafers as semiconducting compound substrates. The widespread use of compound semiconductor epitaxial wafers in LED lighting technology contributes to the market's continued global expansion. Additionally, as the demand for electricity-saving lighting products rises, more conventional lighting products are being replaced with LED lighting in the residential, commercial, and industrial sectors. This has a positive impact on market growth. The majority of LED lights contain several ICs. Due to its higher efficiency, epitaxial wafer chips are now used to produce these ICs instead of silicon wafers. Therefore, the manufacturer coats this compound semiconductor wafer with an epitaxial layer to improve the performance of the semiconductor wafer. The epitaxial layer growing on top of the silicon wafer helps improve the wafer's electrical properties, improving the power capacity of LED lighting.

Advantage Of Compound Semiconductor Epitaxial Wafer Over Silicon Wafers

Around the world, compound semiconductor epitaxial wafers are preferred to silicon wafers. Compound semiconductors have better electrical properties than silicon. Consider compound semiconductor epitaxial wafers' higher saturated electron velocity and electron mobility. Due to their wider energy bandgap, compound semiconductor epitaxial wafers are relatively resistant to overheating. They also produce less noise in electronic circuits than in silicon devices, especially at high frequencies. Compound semiconductor epitaxial wafers are a practical choice for satellite communications, mobile phones, microwave links, and higher-frequency radar systems because of their improved properties. The benefits of compound semiconductors over silicon are what propel market expansion.

What main factors will slow down the epitaxial wafer market for compound semiconductors?

Increase In Cost of Wafer Manufacturing

Epitaxy is a technique used to grow or deposit a single crystalline layer over a substrate or surface of a semiconductor with a crystalline structure. The deposited material must be thoroughly adapted to the substrate for the crystal-based semiconductor. Chip developers use molten or vapor-based foundations to create such epitaxial over layers. Compared to other technologies, epitaxial wafers require a higher cost to form the crystalline layer. Precision and effectiveness are necessary for epitaxial layer formation. Therefore, the wafer manufacturing process requires a skilled workforce and quality individuals. The market's growth is somewhat constrained by the high cost of compound semiconductor epitaxial wafers caused by their expensive manufacturing processes and raw materials. Additionally, it is anticipated that the difficulties in designing compound semiconductor epitaxial wafers will reduce market share and restrain global expansion.

What are the future opportunities for epitaxial wafer market for compound semiconductors?

Emerging Usage of Compound Semiconductors in Smart Technologies

It is anticipated that a variety of novel materials, such as superconductors, carbon nanotubes, and compound semiconductors like GaN, will be used to create next-generation smart technologies. A smart grid and other smart infrastructures cannot function without new cable types, power electronics, cable insulators, cable dielectrics, and energy storage technologies. As the market matures, an increase in these technologies is anticipated to fuel demand for GaN and other compound semiconductors. Incorporating advanced compound semiconductor devices and modules is also anticipated to encourage new smart infrastructure efficiencies, such as enhancing power quality & equipment lifespan, lowering costs, and improving power system control & reliability. Therefore, it is forecasted that the development of smart technologies will present a lucrative opportunity for the epitaxial wafer market to grow. People are gravitating toward automation-based solutions and services in the current IT-dominated world. As a result of their cutting-edge and inventive applications, IoT-based devices are now receiving more attention.

Regional Analysis

Asia pacific dominates the global market.

The global market is bifurcated into four regions: North America, Europe, Asia-Pacific, and LAMEA.

Asia Pacific is the highest shareholder in the global epitaxial wafer market for compound semiconductors and is expected to grow at a CAGR of 12.2% during the forecast period. China, Australia, India, Japan, and the rest of Asia-Pacific are all included in the Asia-Pacific epitaxial wafer market for compound semiconductors analysis. China's semiconductor industry heavily relies on foreign technology to fuel its rapidly expanding economy, importing 90% of its chips. The Wall Street Journal reports that China is close to finalizing a $47 billion investment fund to finance chip startup development and semiconductor research. This fund is expected to fuel the expansion of the country's compound semiconductor market. During the forecast period, China is anticipated to grow faster than other regions, thanks to several factors, including an increase in the adoption of electric vehicles and a surge in demand for advanced RADARs and electronic warfare technology. The market's most significant contributor was the power electronics sector. The industrial and, energy & power segments contributed most to the China market for compound semiconductor epitaxial wafers in terms of end users.

North America is expected to grow at the fastest CAGR of 15.7% during the forecast period. The U.S. and Canada are included in analyzing North America's epitaxial wafer market for compound semiconductors. The compound semiconductor market is expanding in the United States thanks to the semiconductor industry's expansion and rising trends in data processing, power transmission, and processing. The U.S. is the country that adopts technology the fastest, which contributes to the rapid growth of consumer electronics devices, emerging automotive technology like electric and hybrid cars, healthcare monitoring systems, and other things. Americans' rising disposable income drives sales of compound semiconductor devices and technology. This, in turn, fuels the U.S. market for epitaxial wafers to grow. The market's most significant contributor was the power electronics sector. The market was most heavily influenced by the industrial and, energy & power segments.

Segmental Analysis

The market is segmented by application and end user.

Based on application, the global market is bifurcated into CS power electronics, CS RF/microwave, CS photonics, CS sensing, and CS quantum.

The CS power electronics segment is the highest contributor to the market and is expected to grow at a CAGR of 12.3% during the forecast period. Solid-state electronics are used in power electronics to convert and control electric power. Both switches and amplifiers can be made of power electronic devices. Due to operational efficiencies, power electronics companies use compound semiconductor epitaxial wafers in their devices and modules. Compound semiconductor epitaxial wafers create various kinds of solid-state power electronics devices that regulate output variables like the voltage, current, and frequency. Compound semiconductors like SiC and GaN are increasingly necessary for high-voltage power electronics because of the rising demand for effective energy management in products like solar inverters and hybrid cars.

Based on and user, the global market is bifurcated into the digital economy, industrial and energy & power, defense/security, transport, consumer electronics, healthcare, and space.

The industrial and energy & power segment is the highest contributor to the market and is expected to grow at a CAGR of 12.4 during the forecast period. In recent years, conventional silicon-based power diodes and transistors have been used in energy & power and industrial systems. Compound semiconductor epitaxial wafers are better suited to handling electrical loads, switching rates, and other performance requirements necessary to minimize energy losses and lower overall system costs. For use in offline power supplies, home electronics, hybrid and electric vehicles, and smart grid systems, the development of SiC and GaN power electronic devices is actively pursued. The market for compound semiconductors is primarily driven by the increased use of green energy sources in both industrial and consumer markets (such as wind power, solar cells, electric vehicles, and others).

Recent Developments

• August 2022, Infineon Technologies AG will receive 150 mm silicon carbide (SiC) substrates from II-VI Incorporated under a multi-year contract, increasing Infineon's ability to supply cutting-edge electronic components to significant clients around the world. To meet the demands of Tianyu's supply with long-term clients, II-VI Incorporated has invested in a USD 100 million contract to supply Silicon Carbide Substrates for Power Electronics.

• July 2022, GlobalWafers Taiwan CO. Ltd. has announced a $5 billion investment in a new plant in Texas that will produce and supply 300-millimeter silicon wafers used in semiconductors.