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Do you see what I see? Closing out 2019 and looking forward to 2020

by Eric Higham | Dec 19, 2019

In the holiday spirit, I couldn't resist borrowing a line from "Do you hear what I hear". After a long absence created more by a lack of time than a lack of interest, I'd like to close out 2019 with some thoughts about what we'll be talking about in 2020 and beyond. It's been nearly two years, I'm ashamed to say, since my last blog and it has been a very dynamic, volatile time in the world, in the electronics industry, in the semiconductor industry, in the compound semiconductor industry, in most everything. During this time, we've seen trade tensions between the US and China shake up the established electronics supply chain as sales to Chinese companies, especially China come under close scrutiny. We've seen the slowing of smartphone sales flatten the GaAs market. We've also seen GaAs foundries look to VCSELs to offset decreased handset PA volume. We have happily seen continuing rapid growth in GaN revenue and very importantly, we've seen 5G networks actually deploying.
In a shameless plug (some things 
don't change!), I've just published Some Thoughts on the Compound Semiconductor Industry for 2020 (and Beyond) that contains some “thoughts” (I hate to call them “predictions”, because that word seems so digital…it either happens or it doesn’t…and I think most of these thoughts will take some time to clarify) on what’s going on as we exit 2019 and get ready for 2020 and beyond. The Insight contains much more depth than I can go into here, so let’s just throw out the thoughts and let me know what you think:

  • Trade relations will remain unsettled between the US and China at least through 2020.
  • Base station demand will not be impacted by the US/Huawei situation.
  • Suppliers counting Huawei among their largest customers will face a volatile future and this will present challenges.
  • The trade tensions with the US will force China to speed up their plans of becoming a self-contained semiconductor ecosystem.
  • 2020 will see early deployments of standalone (SA) 5G networks.
  • The millimeter wave portion of 5G will continue to ramp up, but it will still be some time before we reach a coverage footprint that allows mobility.
  • However, increasing deployments of millimeter-capable handsets and new frequency bands in the <6 GHz frequency range will get the GaAs market growing again…but slowly.
  • The “sweet spot” for the number of massive MIMO antenna radiators will increase in the short term, but it will then decline from this peak number to a smaller number…and this will benefit GaN.
  • Related to the statement above, power consumption in a base station will become a very important topic as 5G networks begin to deploy at scale.
  • Because of the many dimensions of the “right technology choice” for base stations, defense applications for GaN may be a safer bet in the foreseeable future.
  • Speaking of defense, I expect to see much more collaboration and cooperation between the defense and commercial industries.
  • Expect to hear the term “Mosaic Warfare” more frequently and expect that the principles behind that philosophy will increasingly drive device and process requirements for commercial and defense developments.
  • Fiber will increase its share of “xHaul” (front/mid/backhaul) for 5G networks.
  • Data center traffic will move quickly to higher data rate optical transport solutions.
  • Large semiconductor-savvy companies will begin to speed up the evolution of the InP supply chain.
  • The photonic integrated circuit (PIC)/silicon photonics (SiPh) evolution will be tied closely to the maturation of the InP supply chain.

It seems that if I’d been clever, I could’ve added a few more thoughts and called this something like “20 for 20”…but I’m not that clever! Also, if some of the “thoughts” seem a bit disconnected, there are slightly more than four pages of analysis that go along with the thoughts…so grab a copy of the insight for the holiday season, or get in touch with me and we can chat.

I hope everyone has a productive, safe and happy holiday season! Season’s greetings to all!


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