April 20, 2012 -- Metal organic chemical vapor deposition (MOCVD) and molecular beam epitaxy (MBE) represent essentially 100% of the epitaxial tools used in the commercial production of compound or III-V semiconductor devices. “The corresponding combined revenue opportunity for MBE and MOCVD is estimated to be around US $6.1 billion for the 2012-2020 periods,” says Dr Philippe Roussel, business unit manager, Compound Semiconductors at Yole Développement.

Light-emitting diode (LED) manufacturing is by far the single largest application for MOCVD. In 2010 and 2011, the MOCVD market experienced the largest investment cycle in its history driven by a combination of demand for LED-backlit LCD TVs and subsidies by the Chinese central and local governments.

This has put the market into a significant overcapacity situation that could take 12-18 months to absorb. The next investment cycle driven by lighting applications and expected to start in 2013 will be more limited than the previous cycle due to improvements in equipment throughput and yields. Following this cycle, further cost of ownership (COO) improvements offered by the next generation of MOCVD reactors should justify the replacement of 2-generation-old reactors installed during the 2010-2011 boom and drive a last small equipment cycle in the second half of the decade. By then, power gallium nitride (GaN) devices will also represent a substantial upside for reactor makers.

Figure. 2010-2020 annual new epi-reactor sales in units (Including Power GaN - MOCVF, RF GaAs - MBE, RF GaAs - MOCVD, HCPV MBE, HCPV - MOCVD, LED GaAs - MOCVD, LED GaN - MOCVD). SOURCE: III-V Epitaxy Equipment & Applications Market report, April 2012, Yole Développement.

Overall MBE use is heavily driven by R&D systems (>50% of the total market) and laser applications (telecom, industrial, medical, research) that are not covered in this Yole Développement’s report. “For the applications covered in this report, the MBE market will be essentially driven by the continuous growth in the cell phone and wireless applications that are making heavy use of [gallium arsenide] GaAs-based RF components,” explains Dr Roussel. Emerging applications like smart grid and the trend toward increasing connectivity and “intelligence” incorporated in many consumer products will provide further opportunities. However, alternative technologies (Si CMOS, LDMOS, SoS, HR SOI etc.) represent a potential threat and could capture shares of the GaAs RF market and reduce the opportunity for MBE. In addition, MOCVD is making progress in HEMT manufacturing. Highly concentrated photovoltaics (HCPV) however could provide a small potential upside for MBE makers.

Aixtron and Veeco are leading in MOCVD, together representing 96% of the market in 2011. Production MOCVD tools are complex systems. Design and optimization require expertise in multiple fields including flow dynamics, thermodynamics, chemistry, mechanical and electrical engineering. Technological barriers to entry are fairly high. More than 15 emerging players have been identified but so far have been struggling to capture any sizeable share of the market. But the pressure is mounting and established MOCVD makers will need to maintain that technology gap to keep emerging competitors at bay. The main battlefield is that of total cost of ownership. Established MOCVD makers all have technology roadmaps to enable COO reduction of 3X - 4X within the next 5 years through a combination of improved yields, throughputs and precursor utilization efficiency.

For MBE, Riber and Veeco are the only 2 players offering large capacity / large throughput MBE production tools for volume manufacturing. Yole Développement’s analysts expect they will maintain this dominant position. However, there are about 10 other MBE manufacturers offering R&D , pilot or smaller scale production systems that also have a strong presence on the general MBE market (DCA, SVT, Eiko).

The metal organic precursor market will also be essentially driven by LED applications. But MOCVD reactor technology improvements (yield, consumption, wafer size) will lower the amount of TMGa and TMIn needed per cm² of epiwafer.

The 2010 metal organic shortage ended mid 2011 thanks to aggressive capacity expansion by leading suppliers. Further capacity expansion plans from established and emerging suppliers could come online within the next 3 years. “If executed as announced, we expect significant oversupply starting from 2012 that could continue through 2016 and beyond. This situation could put pressure on prices,” explains Eric Virey, senior analyst, LED, Yole Développement. Further MO synthesis technology improvements could provide opportunity for cost reductions. However, the usually volatile prices of raw Indium and Gallium also have a significant impact on cost.

Companies cited in the report:

Acco, Addon, Aixtron, Akzo Nobel, Albermarle, Altatech, Amalfi, AMEC, Anadigic, Applied Materials, Arima, ATMI, ATTO Wonik IPS , Avago, AW SC, AXT, Azur Space, Azzurro, BAE Systems, Bay Zu Precision (BZPC), Black Sand, Bluglass, BluSolar, Boyu, Cambridge Chemicals, CamGan, Century Epitech, CESI, Chemtura, Chi Mei Lighting, China Crystal Technology, Compsolar, Createc, Cree, CV Technology, CVD Equipment Corporation, Cyprium, Daystar Materials, DCA Instruments, Dow Chemical, Dowa Electronics Materials, Eiko, Elmos, Emcore, EMF Semiconductor systems, EpiBlu, EpiGaN, Epilight, Epistar, Epiworks First Nano, Formosa Epitaxy, Freiberger, Fujiepi, Furukawa, GCS, Genesis Photonics, Guangdon Real Faith Semiconductor Equipments, Hitachi Cable, Hittite, Huga, II-V Lab, Infineon, IntelliEPI, International Rectifier, IQE, Javelin, JDSU Quantasol, Jusung engineering, Kopin, Koyo Thermo systems, Lake LED, Laytech, Lextar, LG Electronic ARI, LG Innotek, LG Siltron, LIG-ADP, Luminus Device, M/A-Com, Mantis, MBE Components, Meaglow, Microlink Devices, Mimix Broadband, Mitsubishi chemical, Mitsubishi Electric, Nanomaster, Nata, Neosemitech, NGK Insulator, Nichia, Nitronex, NTT, Omicron, Ommic, Osaka University, Osram, Oxford Instrument, Panasonic, PB Technik AG, Philips Lumileds, Picogiga/Soitec, Plessey, Powdec, Power Integration, Qingdao Jason Electronic, Rfaxis, RFMD, RFMD, Ribber, Rubicon, SA FC, Samsung LED, Sanan, Sandia, Sanken, SEDI, SEMES, Semprius, Seoul Optodevice / Semiconductor, Sharp, Sheng Optical Equipment, Shinetsu, Skyworks, Solapoint, Solar Junction, SPECS, Spectrolab, Spire Semiconductor, Structured Materials Industries, Sumika, Sumitomo SEI, SVT Associate, Sylarus Technologies, Sysnex, Taiyo Nippon Senso, Tanlong Photoeelctric, Tectra, Tekcore, Top engineering, Toshiba, Tosoh FineChem, Toyoda Gosei, Toyota, Transphorm, Triquint, UBE, ULVAC, Umicore, UMS, UP Chemical, Valence Process Equipment, Veeco, VG Semicon, VPE C, Win Semi, Xiamen Powerway, Yangzhou Longvao, Yongsheng Semiconductor Equipment.

Authors: Philippe Roussel, Ph.D leads the Compound Semiconductors, LED,Power Electronics and Photovoltaic departments at Yole. Eric Virey, Ph.D is senior analyst, LEDs, at Yole.

Yole Développement’s report “III-V Epitaxy Equipment & Applications Market,” covers established and emerging epitaxy technology for III-V semiconductors used in several applications. It provides quantifications for tools and wafer starts per application, an in depth analysis of recent technology trends and their impact on cost of ownership and a comprehensive company profile of the main players in MOCVD and MBE business.

Yole Développement is a group of companies providing market research, technology analysis, strategy consulting, media in addition to finance services. Internet: www.yole.fr.

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