The global indium phosphide wafer market size was valued at USD 142.13 million in 2022. It is estimated to reach USD 453.87 million by 2031, growing at a CAGR of 13.77% during the forecast period (2023–2031).
The surging use of optoelectronic devices and their advancements drive the global indium phosphide wafer market. Moreover, the increasing prevalence of electronic gadgets such as smartphones and tablets is contributing to the expansion of the market, as these devices require Indium Phosphide (InP) for their functionality. Indium phosphide (InP) is a semiconductor composed of the elements like indium and phosphorus. There are faces in the center of its cubic crystal structure. A trialkyl indium compound and phosphide combination can be thermally decomposed by combining the purified components at high temperature and pressure or by reacting white phosphorus with indium iodide at 400 degrees Celsius. InP is used in high-power and high-frequency circuits because its electron velocity exceeds silicon and gallium arsenide, the two most common semiconductors.
The ability to precisely control the doping effect in indium phosphide wafers via ion implantation has allowed for the creation of various devices. Metal-Semiconductor Field-Effect Transistor circuits can be designed because of the low height of the Schottky barrier between doped InP and most metals. They can also be used to construct MISFET (Metal Insulator Semiconductor Field-Effect Transistor) and JFET (Junction Field-Effect Transistor) circuits.
|Market Size||USD 453.87 million by 2031|
|Fastest Growing Market||Europe|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
Electronic components called optoelectronic devices detect and regulate light and convert electrical information into infrared or visible energy or the opposite. Recent advancements in the field of optoelectronics, like plasmonic nanostructures, optically active quantum dots, microscopic light bulbs, perovskite transistors, laser-powered 3D display technology, low-cost 3D imaging, and Laser Li-Fi, are anticipated to bring about a quantum shift in the dynamic applicability areas of optoelectronic apparatus.
In order to satisfy the diverse needs of their clientele, companies are diversifying their range of products. For instance, in April 2022, the Everlight line of optoelectronic devices now includes IR LEDs, photodiodes, and phototransistors and is offered by distributor Transfer Multisort Elektronik (TME). New IR LEDs are among the portfolio's additions. They may produce up to 150mW of output power. The LEDs support a wide range of varied input voltages up to 4.0V, and there are possibilities for emission angles between 20 and 160 degrees. These factors drive the market growth.
The soaring adoption of smartphones and tablets is amongst the main growth drivers for the market. The year 2021 witnessed a notable increase in smartphone shipments, exceeding 1.37 billion units. This growth can be ascribed to affordable smartphone options in emerging markets such as China and India and the global development of Internet connectivity. The rise in smartphone shipments is expected to lead to a corresponding increase in mobile phone demand for indium phosphide (InP) semiconductors.
Smartphones require more InP wafers because they need multiple frequency bands to support 3G and 4G networks. The increasing demand for tablets also contributes to market expansion. Numerous local market participants, such as Micromax in India and Xiaomi in China, have begun introducing tablets in their respective countries, and the number of such vendors is expected to increase during the forecast period.
The semiconductor silicon wafer is the foundation of the electronics industry and the main component of many microelectronic devices. These items are being used in various devices due to recent developments in the technological landscape, electronic mobility, and digitalization. Due to the demand for smaller devices, the need for more functionality from a single device has also dramatically increased, driving up the price of the silicon wafer.
Furthermore, compared to silicon, gallium nitride (GaN) is a wide-bandgap semiconductor material with superior characteristics and performance, including high efficiency, quick switching, excellent thermal management, and a small footprint and lightweight. Consequently, these factors are expected to restrain the market growth.
The widespread use of cloud services has raised the demand for data centers in recent years. With the increase in the data center, the demand for the InP wafers may be increased. Some major companies in the data center market also plan on investing heavily in hyperscale data centers. In June 2021, Equinix announced plans to build 32 hyperscale data centers in some of the world's major markets. With a total capacity of 600 megawatts and more than USD 6.9 billion in investment, the company aims to tap new markets and gain a better position in the growing landscape of hyper-scale data centers.
The government bodies' steps to incentivize hyper-scale data centers are also driving their construction of data centers and creating opportunities for local and internal InP wafer vendors to provide products according to the customer's requirements. For instance, in April 2021, the Ministry of Electronics and Information Technology (MeitY) India announced its plans to develop a scheme to incentivize investments in hyperscale data centers and increase the current capacity by over 10-fold in a short period.
Based on region, the global indium phosphide wafer market is bifurcated into North America, Europe, Asia-Pacific, and Rest of the World.
Asia-Pacific is the most significant global indium phosphide wafer market shareholder and is estimated to exhibit a CAGR of 14.21% during the forecast period. The Asia-Pacific region commands a significant share of semiconductor foundries globally, with major companies like TSMC, Samsung Electronics, etc. South Korea, Taiwan, Japan, and China have a significant market share in the region. The significant research and partnership growth further bolsters the market growth rate. For instance, LioniX International (LXI) and the Institute of Microelectronics Chinese Academy of Science (IMECAS) have agreed to extend their Photonic Integrated Circuit (PIC) platform partnership by actively enhancing the functionality and offering both platforms.
Furthermore, the growing 5G investments are analyzed to expedite the demand for the market during the forecast period. For instance, in March 2020, DOCOMO began offering limited 5G commercial services in Japan's main cities. The corporation intends to spend over USD 7 billion by 2025 to extend its network across 97% of the nation's inhabited areas. It plans to set up 5,001 base stations in the 28GHz band and 8,001 base stations in the 3.7GHz and 4.5GHz frequency bands. Therefore, the factors above propel the regional market growth.
Europe is estimated to exhibit a CAGR of 13.47% over the forecast period. Increased demand for semiconductors in advanced automation, artificial intelligence, and Internet of Things (IoT) applications is expected to drive the market's growth during the forecast period. Since volumetric implementations of semiconductors drive the demand for indium phosphide wafers, the telecommunication and medical sectors may present more significant potential than other industries. In 2013, the European Commission established a public-private partnership on 5G technology, known as the 5G-PPP, to expedite research and innovation in this field. The European Commission allocated a sum of over EUR 700 million in public funding to facilitate this endeavor as part of the Horizon 2020 Program.
Furthermore, according to a 5G and future telecommunications plan unveiled by government ministers, France plans to invest about EUR 1.7 billion in its 5G market by 2025 via public and private investments. The objective is to hasten the development of 5G, especially new use cases, to encourage acceptance and strengthen the technology's impact on other industries. All these factors boost market growth.
North America's expanding electronics industry and semiconductor solutions will likely propel the industry forward. American companies have been at the forefront of developing processors that power modern technology for decades. The United States' supremacy in semiconductors is a major cause for the country's economic dominance and technological prowess. The semiconductor sector in the United States maintained its leading global position in key future technologies like artificial intelligence (AI), quantum computing, and sophisticated wireless networks like 5G. Due to the rise of future technology, such as miniaturization, the active demand for semiconductor chips is expected to propel the market's growth in the region. In addition, the growing product innovations in the region are expected to bolster the demand for the market studied during the forecast period. For instance, IIVI Incorporated, a global pioneer in optical communications components and subsystems, launched high-speed indium phosphide (InP) electro-absorption modulated lasers (EML) for data centers and 5G optical access infrastructure.
The Rest of the World includes South America and the Middle East and Africa. The South American market gives a new potential for electronics manufacturing and supply chain organizations as the microelectronics industry continues to globalize and localize manufacturing capabilities inside emerging electronic markets. InP substrates can also be used in 5G and health and well-being biometric applications. In addition, the significant growth in these sectors in the regions above is analyzed to boost the market growth rate over the forecast period. For instance, in January 2022, the Brazilian data center company ODATA received a new USD30 million tranche of financing from the International Finance Corporation (IFC).
Furthermore, many of the market's key companies are spending significant money on building innovative technologies to provide effective products and boost market growth in the Middle East and Africa. The growing capabilities and manufacturing sites in the African and Middle Eastern markets present an increasing demand for the Indium phosphide wafer industry.
The global indium phosphide wafer market is segmented by diameter and end-user industry application.
Based on diameter, the global indium phosphide wafer market is bifurcated into 50.8 mm or 2", 76.2 mm or 3", and 100 mm or 4" and above.
The 100 mm or 4" and above segment owns the highest market share and is estimated to exhibit a CAGR of 14.23% over the forecast period. Recent progress in high-speed optical communication systems has increased the fabrication scale of devices, such as HBTs (Heterojunction Bipolar Transistors) and OEIC (Optoelectronic Integrated Circuits). These devices require semi-insulating Fe-doped InP substrates that are larger in diameter (4") and higher in quality to enhance device performance and reduce costs. Currently, 4-inch InP single crystal substrate and processing technology have started to realize industrialization. In the coming years, a 4" single crystal InP substrate is expected to replace the 2" substrate and become the main product in the market.
Furthermore, Semiconductor Wafer Inc. is one of the major players in the market that provides MBE (Molecular-beam Epitaxy)/ MOCVD (Metal Organic Chemical Vapor Deposition) epitaxial growth of custom structure on InP substrate for microelectronics, optoelectronics, and RF Microwave applications, in diameters ranging up to 4".
The 2"- or 50.8-mm diameter Indium phosphide (InP) wafers are widely used for applications in optoelectronics, laser devices, diodes, photodetectors, and microelectronics chips. The primary drivers for adopting these small-diameter InP wafers include their comparatively lower fabrication prices and less stringent specifications. A surge in optical communication has caused an increase in the production quantity of photodiodes, in which a 2" InP wafer can play an important role. For instance, an Indium-phosphorus photodiode (pin-PD) is prepared by growing an epitaxial layer on an indium-phosphorus (InP) substrate by chloride vapor-phase epitaxy.
In order to prepare a pin-PD, an InP substrate is formed by cutting an InP ingot A pin-PD is made by cutting an InP ingot into slices, chamfering, grinding, and polishing each slice to create an InP substrate. After that, an InP wafer is prepared by epitaxially growing a group III-V compound layer on this substrate. Subsequently, this InP wafer forms a Zn diffusion layer, a protective film, etc. The InP wafer grown into a diameter of 2" is generally cut into a rectangular form and then subjected to a device process of forming the Zn diffusion layer and the like.
Based on end-user industry applications, the global indium phosphide wafer market is segmented into consumer electronics, telecommunications, medical, and other end-user industry applications.
The telecommunications segment dominates the global market and is estimated to exhibit a CAGR of 12.71% during the forecast period. InP is commonly employed for telecommunications applications. An InP can produce highly efficient lasers, sensitive photodetectors, and modulators. InP is also used for generating laser signals, converting, and identifying those signals back to their electronic form. Some of the applications of InP for telecom or datacom included long-haul optical fiber connections over far distances, company networks, data centers, wireless connections for 3G, 5G, and LTE base stations, and satellite communication.
InP-based telecommunication and data-communication systems offer higher energy efficiencies and lower environmental impact than incumbent systems, such as copper. The ability to support the continued explosion of storage requirements and growth of data transmission is becoming paramount. Communication networks worldwide operate through InP lasers connecting switches and routers within and between data centers and the Internet.
Indium phosphide (InP) wafers are used for various applications in the medical industry, including controlling equipment in surgery, monitoring important signs, and applications in optoelectronic equipment. Companies and various organizations focus on developing new and innovative products and services for their consumers. For instance, in June 2021, a European collaboration between silicon photonics researchers from the Belgian electronics institute IMEC and a semiconductor equipment firm, Sivers Photonics (formerly CST Global), and equipment firm ASM AMICRA Microtechnologies successfully integrated indium phosphide (InP) lasers with silicon photonics on an industrial-scale wafer platform.