Wireless and Fiber Optic Networks to Boost Compound
Semiconductor Sales
To $10 Billion
Compound Semiconductor Magazine Predicts Communications Applications
Will Grow 33 - 40% Annually
BEVERLY, Mass., Dec. 7 /PRNewswire/ -- Sales of compound semiconductor
devices will reach the $10 billion mark in 2000, predicts an article in the
December issue of Compound Semiconductor Magazine. "Shipments of compound
semiconductor devices increased nearly 4x in this decade, and the outlook for
the years ahead is extremely good," says Managing Editor Marie Meyer. "If the
current growth rates can be sustained -- and there are no indications to the
contrary -- shipments of compound semiconductor devices should reach the
$20 billion level in less than 5 years."
Compound semiconductors are the second most common type of semiconductor,
after silicon. The most common example of a compound semiconductor device is
the light emitting diode (LED), which accounts for approximately 40% of all
sales. However, the highest growth rates are found in more sophisticated
devices that are used as components in communications systems. Examples
include GaAs power amplifiers for mobile phones, and semiconductor laser
diodes and high-speed ICs used in fiber optic networks.
In many cases, compound semiconductors serve as the key enabling
technology for communications systems, and demand for these devices is
soaring. The total market value for compound semiconductors used in
communications applications is estimated to be more than $3.5 billion, with
current annual growth rates in excess of 33%.
As a result, virtually all of the companies that are active in this field
have seen huge increases in their valuations. Since the first of the year,
shares in three manufacturers of telecom laser diodes -- JDS Uniphase, SDL
Inc., and Ortel -- have risen more than 600%. "We believe the growth rates in
laser diodes may be even higher with the aggressive deployment of wavelength
division multiplexing (WDM) networks and a robust SONET market," says
Jim Jungjohann, a telecom analyst at CIBC World Markets.
Share prices for several manufacturers of GaAs ICs have also increased
dramatically. RF Micro Devices is up more than 1800% over the past two years.
Shares in Vitesse, TriQuint, and Alpha Industries have risen more than 300% in
that same period. And Conexant shares have risen more than 500% since the
company's IPO in January. "With the strong growth in mobile telephony and
broadband wireless access opportunities, demand is accelerating for high-
speed, high bandwidth components. We expect that technology advances will
keep GaAs, SiC and other advanced materials in the forefront of the bandwidth
revolution," said Dale Pfau, Managing Director at CIBC World Markets. "We
could see growth over the next several years even stronger than we have over
the past two or three."
Compound Semiconductor Magazine, with sponsorship from CIBC World Markets,
is hosting a conference about the applications of compound semiconductors in
the communications industry. The Key Conference on Compound Semiconductors in
Communications will be held in Key West, Florida March 13-14, 2000 at the
Wyndham Casa Marina Hotel. Leading industry analysts and representatives of
many of the top compound semiconductor fabs will present their views on the
future of this industry. Speakers from Lucent, Nortel Networks, TRW, JDS
Uniphase, Anadigics, Gore Photonics, Cree Research, Rockwell Science Center,
Strategies Unlimited, OIDA, Strategies Analytics and many others are scheduled
to appear.
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