Global Aluminum Gallium Arsenide Market -2024-2031

Global Aluminum Gallium Arsenide Market -2024-2031

Global Aluminum Gallium Arsenide Market reached US$ 1.9 billion in 2023 and is expected to reach US$ 4.2 billion by 2031, growing with a CAGR of 10.2% during the forecast period 2024-2031.

The expanding need for energy-efficient lighting solutions, the growing use of AlGaAs-based products in the telecommunications sector for high-speed data transmission and the rising investment in renewable energy sources like solar power. The development of novel applications for AlGaAs and improvements in production methods are also driving market expansion.

For instance, in October 2023, Changxin Xinqiao has received a 14.56 billion yuan (US$ 1.99 billion) investment from China's state-backed semiconductor investment fund. According to the National Enterprise Credit Information Publicity System, the deal witnessed the China Integrated Circuit Industry Investment Fund contributes to 33.15% of the total registered capital of Changxin Xinqiao. Hence, the growing investment in the IC industry drives the growth of the ALGaAs market in China, which accounts for majority of the Asia-Pacific market share.

Dynamics

Expanding Gallium Production Capacities

Due to its high cost and limited availability, gallium may influence the final cost of producing AlGaAs devices. Increasing gallium production capabilities can result in economies of scale and cheaper gallium production, which will ultimately cut the price of producing AlGaAs products. AlGaAs devices may become more competitive in the market as a result of this cost reduction, increasing demand and market expansion.

In January 2024, Gallium is becoming more and more available on the Chinese market as a result of domestic producers in China growing or extending their capacity. However, the market may experience a more significant overstock in 2024 as a result of ambiguities around the new year's export control laws and a lack of downstream demand.

The additional production capacity for 2024 is estimated by Chinese traders and varies depending on the market participants. A 200–300 Ton’s rise is anticipated by several manufacturers. Particularly compared to alternative processes, the extraction of gallium during the manufacturing of aluminum has a financial benefit and a large amount of the world's high-grade bauxite that contains gallium is concentrated in China. It may be more convenient for aluminum companies to begin or increase gallium production considering China's significant role in the industry.

Consumer Electronics Adopting AlGaAs-Based Devices

The need for small or low power semiconductor materials and components is increasing due to the growing number of consumer devices, such as smartphones and laptops. AlGaAs-based devices have excellent efficiency, are highly reliable and can operate at high frequencies, therefore being suitable for incorporation into a variety of consumer electronics products.

For instance, in September 2023, a completely indigenous gallium nitride power switch has been created by researchers at the Indian Institute of Science (IISc). The switch may find use in wireless communications and power converters for laptops and electric cars, among other systems. At the IISc Centre for Nano Science and Engineering, the whole switch-building process from material growth to device fabrication to packaging was developed independently.

Limited Availability of Gallium and Arsenic

Market price volatility may also result from the restricted supply of gallium and arsenic. The production costs of AlGaAs semiconductors can be directly impacted by fluctuations in the prices of these raw materials, increasing their cost to manufacturers. Then, higher production costs can be passed on to customers, raising the cost of products potentially decreasing demand for devices based on AlGaAs.

The scarcity of gallium and arsenic may serve as a barrier to entry for new companies entering the AlGaAs industry. It costs a lot to set up a dependable supply chain for these raw resources in terms of infrastructure, logistical prowess and sourcing agreements. It could be difficult for small businesses or recent new arrivals to compete with leading corporations that have already established their supply chains.

Fluctuating Prices

Price fluctuations for raw materials, particularly for gallium and arsenic, have a direct impact on the cost of producing AlGaAs semiconductors. Manufacturers must pay more for production when prices increase, which could decrease their profit margins or escalates up the cost of AlGaAs-based products. It may reduce AlGaAs's competitiveness in comparison to other materials and restrict its use in a range of applications.

In July 2023, the price of gallium surged 27% globally as purchasers responded to China's decision to restrict shipments of this rare metal, which is utilized in a variety of technological companies. Therefore, the global market for aluminum gallium arsenide has significant barriers to its growth and sustainability because of volatile raw material prices.

Segment Analysis

The global aluminum gallium arsenide market is segmented based on purity, application, end-user and region.

Expansion of Laser Technologies Driven by Electrically Driven Organic Semiconductor Lasers

The introduction of electrically driven organic semiconductor lasers expands the range of lasers accessible in the market. The diversification may pique the interest of companies and applications that have particular requirements that organic semiconductor lasers can meet better than standard AlGaAs-based lasers.

In September 2023, to develop small laser technology, St Andrews scientists are developing an electrically driven organic semiconductor laser over several decades. It is used to transfer information over the internet, for medical treatments and even as face scanner on smartphones. Most of these lasers are composed of hard, brittle semiconductor crystals like gallium arsenide. Therefore, semiconductor lasers application segment captures the majority of the total global segmental shares.

Geographical Penetration

China's Export Controls on Gallium and Germanium Drive Regional Market

In the most recent development in the global struggle for dominance over chipmaking technology, China is placing limitations on the export of gallium and germanium, which are needed to produce semiconductors and gadgets. The limitations will cover gallium and germanium metals as well as a number of their compounds as of August 1, 2023.

China dominates the production of high-tech metals such as gallium germanium and other materials. Chipmaking, telecommunication, electric vehicles and other industries rely heavily on these two metals. The metals also have military applications, including radars, high-power lasers and spy satellites. Therefore, China holds for the majority of the regional market shares.

COVID-19 Impact Analysis

The demand for numerous electronic products changed during the pandemic. While remote work and learning trends led to increasing demand for certain gadgets such as laptops, tablets and other household electronics, demand in other sectors such as automotive and aerospace fell. The shifts in demand patterns affected the demand for AlGaAs-based components.

Many semiconductor manufacturing facilities throughout the world had to temporarily close or curtail operations to comply with government limitations and guarantee the safety of their employees. The disruptions impacted manufacturing schedules and output levels. The above-mentioned developments hinder the growth of the global aluminum gallium arsenide market.

Russia-Ukraine War Impact Analysis

Larger trade interruptions or economic penalties caused by geopolitical tensions can have an impact on global trade dynamics and economic activity. It can have implications across industries, potentially altering demand for aluminum gallium arsenide based on changes in production, consumption or investment trends.

Russian military activities in Ukraine had a substantial influence on a variety of industries, particularly aluminum. Global aluminum prices had already soared at the start of the year, but the war undoubtedly aggravated the situation in February.

The war drove the price of aluminum to new proportions. For example, the aluminum price on the LME (London Metals Exchange) with the three-month contract peaked at a record US$4,000 per Tons in early March 2022, up from US$ 3,224 monthly average in February of the same year. Market prices have recently fallen as price increases discourage demand, yet even in May 2022, aluminum trades for US$ 3,300, 40% higher than the prior year.

By Purity
● 99.0%
● 99.9%
● 99.99%

By Application
● Semiconductor Lasers
● Integrated Circuits (ICs)
● Photovoltaics
● Lighting and Displays
● Optical Sensing and Imaging
● Spectroscopy
● Others

By End-User
● Electronics
● Telecommunications
● Photonics
● Aerospace and Defense
● Research Institutions and Laboratories
● Medical and Healthcare
● Others

By Region
● North America
U.S.
Canada
Mexico
● Europe
Germany
UK
France
Italy
Russia
Rest of Europe
● South America
Brazil
Argentina
Rest of South America
● Asia-Pacific
China
India
Japan
Australia
Rest of Asia-Pacific
● Middle East and Africa

Key Developments
● In February 2024, WashU is developing portable OCTs based on photonic integrated circuits. A project at Washington University in St. Louis (WashU) is working on a portable OCT system based on photonic integrated circuits.
● In February 2021, Aluminum Oxid Stade GmbH, a 99%min producer in Germany, intends to resume gallium metal 99. Asian Metal 99%min in early Q3 2021 and intends to manufacture approximately 5t per month.
● In September 2023, Gallium Semiconductor has announced the release of the GTH2e-2425300P ISM CW amplifier, a 2.4-2.5 GHz, 300W pre-matched discrete GaN-on-SiC High Electron Mobility Transistor.

Competitive Landscape

The major global players in the market include Sumitomo Electric Industries, Ltd., ALB Materials, Inc., Umicore, Ganwafer, AXT Inc., EMCORE Corporation, IQE plc, XI'AN FUNCTION MATERIAL GROUP CO.,LTD., Furukawa Electric Co., Ltd. and Wafer Technology Ltd.

Why Purchase the Report?
● To visualize the global aluminum gallium arsenide market segmentation based on purity, application, end-user and region, as well as understands key commercial assets and players.
● Identify commercial opportunities by analyzing trends and co-development.
● Excel data sheet with numerous data points of aluminum gallium arsenide market-level with all segments.
● PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
● Product mapping available as excel consisting of key products of all the major players.

The global aluminum gallium arsenide market report would provide approximately 61 tables, 60 figures and 188 Pages.

Target Audience 2024
• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies