In my last blog, I talked about how the end of summer coincided, at least philosophically, with the end of my vacation. I may have to rethink that stance just a bit, since Boston just reached record high temperatures two days in a row earlier in the month. I also said that it’s time to move on last month, so that’s what I’ll do. In this case, I’m moving on to take in some of the dazzling beauty of fall foliage in the Adirondack Mountains. I’m going to visit my cousin April and you may recognize the name, because I find myself talking about her so much that she may request a byline in all upcoming blogs!
In the context of the always on, anytime, anywhere connectivity that drives so many of the wireless trends, I find her life fascinating. She lives on a lake deep in the Adirondack Mountains, in a red house that her grandfather built. Growing up, our families were close, so we spent a lot of time together and April ultimately moved into the house. This was always the destination to “get away from the rat race”, because you could get maybe three over-the-air TV stations (if you were lucky!), a radio station every so often and for the longest time, the phone was a party line. This was all we needed at the time; there was no Xbox, Facebook or Google.
Now, I don’t want you to think that April is a survivalist, living off the land, because technology has found this little corner of the world. When I go visit, my cell phone will not work because there is only spotty coverage and it’s from a different carrier, but she has Wi-Fi! In an interesting turn of events, she just upgraded to VDSL service and her speeds are now on par with my DOCSIS 3.0 cable service. That means that I can drive to Boston quicker than she can get to a town with intersections, but we get the same internet speed! Oh, and she now has satellite TV, so no more adjusting the antenna to just the right spot to get fuzzy reception of an analog station!
Other giving me a chance to reminisce about my childhood and my favorite relative, all of these changes are the result of the development of GaAs technology! I had the privilege of writing an article for Compound Semiconductor magazine to help them celebrate their 20th anniversary. The GaAs Revolution looks at the humble beginnings of the GaAs device market, when the best application of the technology seemed to be for high-speed digital transistors and works its way through life-saving funding from DARPA to develop and refine MMIC technology. There is a great chart that Gregg Wallace of Ferrotec/Temescal let me use that shows the consolidation in the GaAs industry from the early days and it gives a sense that all the mergers and acquisitions that we have seen in the GaAs industry the past few years are the rule, rather than the exception. I found it very interesting to see the GaAs revenue profile (shown below) since 1990 and to understand how wireless technology drove revenue to nearly $7 billion in 2014.
In addition to a retrospective look at how we got here, I also recently published my latest GaAs Device Forecast and Outlook: 2014 - 2019 that forecasts what the next five years will hold for the GaAs device market. The headline is that it was another great year for GaAs devices. Cellular terminals and smartphones, in particular, continue to account for more than half of the GaAs device revenue. Smartphone penetration rates are slowing, but the complexity of the transceivers is increasing as operators look to stay ahead of the constant increase in wireless data traffic. New wireless bands, carrier aggregation and MIMO antenna techniques seem poised to increase the GaAs content in cellular terminals. The forecast goes to 2019 and by then, we should have a better understanding of the 5G technology that could be a very powerful growth engine for the future of GaAs. I remain very optimistic about the future of GaAs and despite the attention that industry observers (including me) give to competitive technologies like GaN, InP, SiGe and RF CMOS, we have to remember that in RF applications, GaAs revenue dwarfs the other technologies!
Of course, nothing is perfect. I won’t be able to spend as much time with relatives as I would like on the personal side and on the professional side, there are a few storm clouds on the GaAs horizon. Despite RF revenue from the competitive technologies being small, it is growing. We are forecasting that RF CMOS PAs will account for nearly 25% of the cellular PA revenue in 2019. There is also the matter of what is going on with China’s economy and the impact those fluctuations will have on the global economy. Economic issues are way outside of my area of expertise, so I will leave those alone, but I’m optimistic that the GaAs industry will flourish, despite the challenges, as it has for the last 20 years!
As we head through October, I’ll be attending SCTE CableTec Expo '15 in New Orleans. CSICS (Compound Semiconductor IC Symposium) is also in New Orleans that week, so I’ll be trying to catch presentations at both conferences. If you would like to chat, or to get more information about how Strategy Analytics can work more closely with your company, please feel free to drop me a line or introduce yourself at the show(s).
- Eric