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Commentary & Perspective...
Strategy Analytics' Asif Anwar Predicts GaN LD Market TrendsJuly 17, 2007...At our recent Compound Semi Vision executive business forum in Austin, Texas, market analyst extraordinare, Asif Anwar of Strategy Analytics, presented a keynote address that provided enough solid and clearly bankable numbers to excite even the most jaded compound semi industry follower. While he covered the gambit of materials and applications sectors at Vision, he provides our readers here with an update on one of the hottest topics, the gallium nitride (GaN) based laser diode (LD) market. What people always want the most are the numbers. Well, here they are: According to Strategy Analytics, the market for GaN-based laser diodes will grow at a CAAGR of 103% through to 2011 with the consumer based optical data storage market dominating all other applications. Principal optical data storage applications will be in games consoles, PCs and home theater; the latter finally becoming the dominant market as the two competing formats, Blu-Ray and HD-DVD, gain mass market acceptance. That, reassuringly, reaffirms their previous predictions, which is that the optical data storage market will account for >99% of the total available market for GaN-based laser diodes from 2006 through to 2011. Furthermore, the average selling price of all GaN based laser diodes is expected to rise with a CAAGR of ~4%, reflecting the move from just playback devices to the higher performance recordable devices. SA believes that the GaN-based laser diode market will increase at a CAAGR of 103% from $33.9 million in 2006 to over $1.2 billion in 2011 and that the supply of GaN-based laser diodes will be dominated by Japan with that country supplying almost 100% of the total demand for at least the next three years. And the part that might surprise some... Strategy Analytics says that GaN laser diode production will move away from sapphire substrate usage over the next five years. Asif notes that, while this migration will not affect companies like Rubicon and Kyocera materially in a significant way, a similar development in LED production would have serious ramifications for sapphire substrate suppliers. For those outside the compound semi industry and new to blue spectrum laser diodes, it's important to note that the markets addressed above all use the same basic GaN-based laser diodes, whether they're Blu-Ray or HD-DVD. Nichia pioneered the blue spectrum LDs and the formula for growing these key devices remains primarily the same. To function at their optimum, they all rely on the best possible GaN compound semi material. The better GaN starting substrates become, the better the LDs. And if the improvements work for LDs, and the prices of GaN substrates become more attractive, you can bet that LED manufacturers will look to GaN as their starting substrates of choice as well. That's long been the understanding within CS industry circles. And GaN substrate quality, and quantity, is indeed improving. Asif points out that, up until 2006, GaN-based laser diodes had been deployed in a range of markets which included printing, spectroscopy, biological agent detection as well as optical data storage. Strategy Analytics' original 2004 report "Gallium Nitride Laser Diodes: Markets and Applications" predicted that the consumer optical data storage market would be the largest, dominant market for GaN-based laser diodes but development had been hindered by the high cost of the laser diodes attributable to two main factors: Low manufacturing yield and a lack of competition. "2006 finally saw the launch of the Playstation 3 games console and whilst the initial launch was hindered by the unavailability of GaN-based laser diodes in sufficient quantities, it looks like improvements in manufacturing yield and consumer demand will mean that the market for consumer optical storage devices, especially games consoles using GaN-based laser diodes, will finally "take-off" in 2007 as a precursor to a wider consumer electronics market. By 2011, Strategy Analytics is predicting a significant shift in the market with the demand from gaming consoles, using low cost, low power GaN laser diodes, being supplanted by a significant rise in the recordable versions of Blu-ray and HD-DVD players, using higher cost, higher power laser diodes as these systems become an essential part of the consumer's home theater system," reports Asif. He goes on to report... "Nichia continues to dominate the commercial supply of InGaN blue violet
laser diodes and is reported to have > 80% of the market share. Its dominance
in the market was based around a strong materials and devices patent portfolio.
This has meant that as long as devices were fabricated on foreign substrates
Nichia was in a strong position to ask for royalties and ensure that other companies
never represented a significant commercial threat. "In the first half of 2006, there were a limited number of commercial
suppliers of GaN-based laser diodes; Nichia Chemical Corporation, Sony, Sanyo
and TopGaN. This situation changed in the autumn of 2006 with Sharp Corporation
announcing it was to begin mass production of both low power R/O (read only)
and high power R/W (rewritable) laser diodes for the consumer market. This element
of competition has been further enhanced by the announcement in early 2007 by
Sony Corporation that they were to boost the output at their Shiroishi plant
to a point where they could not only meet all internal demand for GaN-based
laser diodes but also be in a position to supply third parties. "The track record of Sharp and Sony in making a significant fraction of
the DVD laser market their own, suggests that they will take a large slice of
the InGaN LD market too and we expect additional entrants such as Rohm to this
market over the next two years. Rohm, a Japanese manufacturer that has been
dominant in the supply of both IR CD-laser diodes and red-DVD laser diodes,
has recently made strides in the development of laser diodes using non-polar
GaN substrates, resulting in greater efficiencies and possibly a quicker route
to a green InGaN laser diode. Rohm's developments, whilst impressive, will need
to be transferred to a volume manufacturing environment and it is likely that
this will take at least two years to realize. "The activities of Sharp and Sony as well as other laser diode manufacturers
point to GaN laser diode manufacturing moving away from sapphire substrates
to nitride substrates over the next five years to both enhance the performance
and yield of GaN laser diodes as well as avoid the potential IP pitfalls associated
with device production on foreign substrates. Sapphire substrate suppliers such
as Rubicon and Kyocera will see demand from the GaN laser diode market drop
as the manufacture of GaN laser diodes will move away from sapphire substrates
to nitride substrates over the next five years. While the move will not affect
these companies materially in a significant way, these companies should follow
the migration closely bearing in mind potential trends in future LED production."
If you'd like to contact Asif Anwar directly for more information, you can email him at: aanwar@strategyanalytics.com, or you can contact Chris Taylor at: ctaylor@strategyanalytics.com If you have news or
views to share about the compound semiconductor, LED or solid
state lighting industries |
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