As we gear up to slide into another round of conferences, the possibilities for learning and growing seem almost endless. We know what we see and experience will both surprise and delight us, so it seems like a good time to take stock of what has happened in the GaAs device market and the trends for the future. I just published our annual GaAs 5-Year outlook, with the report found at:  GaAs Industry Forecast: 2012-2017 and the data model at: GaAs Industry Forecast: 2012-2017 (Data Tables).

The synopsis of the 2012 GaAs device market is slow overall growth with a strong last quarter indicating brighter short-term prospects, but some challenges ahead. The good news is the GaAs device market did close 2012 up slightly less than 2%. A small gain, but a gain, nonetheless! This extends the GaAs device market expansion to seven years and I estimate the 2012 revenue came in at slightly more than $5.3 billion.  The cellular segment still dominates revenue in the entire GaAs device market, accounting for nearly 60% of total revenue in 2012. I used to refer to this as the “handset segment” and will undoubtedly slip and call it that in the future, but we are seeing a big increase in the adoption of wireless radio technology in non-handset, cellular applications like tablets, E-readers, machine-to-machine and PCs. It is now more appropriate to refer to this segment as the “cellular segment”.

The strong last quarter of 2012 seems to have continued seamlessly into 2013, as GaAs device market revenue is up approximately 10% for the first half of this year. I believe that continuing strength from the cellular segment will drive the market to above average growth for the next two years. Along with growth in this segment, I am seeing the resumption of good growth in the fiber optic transport market and the long-awaited small cell market starting to show signs of deployment.

I think, however the bump to growth will be short-lived. Developments like the expected production ramp of Qualcomm’s suite of RF360 CMOS products, adoption of envelop tracking techniques that can improve the performance of all technologies, but are intimately entwined in CMOS PA developments and even the development of GaAs multi-band PAs will all act to slow the growth of the GaAs device market. Growth in other markets will offset some of this decline, but with 60% or more of the market revenue dependent on cellular growth, the entire GaAs device market will continue to follow the trend of the cellular segment.

This is not meant to be a harbinger of bad times, because the crystal ball image gets fuzzier the farther you look into the future and GaAs devices have always done well as performance requirements get tougher. It is meant to point out that competition for GaAs technology is never very far away and those of us in the GaAs device industry must remain vigilant to these threats.

Much more analysis to follow in the coming months!

Eric