Market Overview

Strategy Analytics: Defense and 5G to Propel RF GaN Market Past $1 Billion Milestone


Increasing GaN adoption driving CAAGR of over 16% through 2022

RF Gallium Nitride (GaN) market growth continued to accelerate in
2017, with revenues growing at over 38 percent year-on-year. GaN is
seeing adoption across a range of RF applications. The rollout of
commercial wireless infrastructure coupled with demand from military
radar, electronic warfare and communications applications will provide
the primary drivers for growth. The Strategy Analytics Strategic
Component Applications (SCA) group report, "
GaN Market Update: 2017 - 2022
," forecasts that RF GaN
revenues will push past the $1 billion milestone by the end of the
forecast timeframe.

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RF GaN Market Historical Segmentation (Graphic: Business Wire)

RF GaN Market Historical Segmentation (Graphic: Business Wire)

RF GaN demand from the military sector grew by 72 percent year-on-year
in 2017, and this will grow at a CAAGR (compound annual average growth
rate) of 22 percent through 2022. The military radar segment will remain
the largest user of GaN devices for the defense sector. Substantial
production activity in AESA radars for land-based and naval systems in
particular is driving increasing demand for RF GaN, as many systems
previously in development move to production.

"As well as demand from military radar, operational requirements to
operate in contested and congested environments, as well as being able
to counter modern agile radar and communications, will drive
opportunities for RF GaN for the Electronic Warfare (EW) market," noted Asif
Anwar, Director of the Advanced Defense Systems (ADS)
"Communicating voice, data and video simultaneously and securely over
wider and higher bandwidths in an increasingly complex spectrum
environment will underpin trends for military communications system
design. We expect the associated component demand will also be
increasingly underpinned with RF GaN."

Wireless base stations continue to be the single largest revenue segment
for RF GaN, with increasing penetration translating to year-on-year
growth of more than 20%. While the big lift from Chinese LTE deployments
is over, the wireless industry has done a very good job of maintaining
and in some cases, compressing the 5G deployment schedule. The resulting
5G base station deployment will become a primary commercial growth
driver for RF GaN.

"GaN improves high frequency, instantaneous bandwidth, linearity and
environmental performance capabilities and this allows equipment
manufacturers to develop higher capacity, higher power and higher
performance radios," observed Eric Higham, Service Director, Advanced
Semiconductor Applications (ASA)
service. "5G deployment will drive
opportunities for GaN on multiple fronts, with demand coming from both
fixed and mobile applications, operating below 6 GHz, as well as in
Ka-band and higher millimeter wave frequency bands. Opportunities are
also growing for RF GaN devices in wireless backhaul and VSAT, and we
are seeing traction in the adjacent RF Energy market also."

Qorvo saw good growth in their defense-related GaN revenue to maintain
the market leader spot, widening the gap over rivals competing in the
defense sector including captive suppliers such as Raytheon and Northrop
Grumman. Sumitomo Electric Device Innovations (SEDI) continued to be the
leading supplier of the overall RF GaN market in 2017, based largely on
its dominant position in the base station market, with Wolfspeed, A Cree
Company, maintaining second place.

The future continues to look promising for RF GaN adoption, even as
growth drivers remain in flux. Strategy Analytics forecasts RF GaN
revenue will cross the $1 billion barrier by 2022, with defense sector
demand slightly greater than commercial revenue.

About Strategy Analytics

Strategy Analytics, Inc. provides the competitive edge with advisory
services, consulting and actionable market intelligence for emerging
technology, mobile and wireless, digital consumer and automotive
electronics companies. With offices in North America, Europe and Asia,
Strategy Analytics delivers insights for enterprise success.

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