Compound Semiconductor Market Size, Share, Growth & Industry Analysis, By Product (Gallium Nitride, Gallium Arsenide, Silicon Carbide & Others), By End Use Industry (Consumer Electronics, Telecommunications, Automotive, Aerospace & Defense & Others), and Regional Analysis, 2024-2031

Compound Semiconductor Market Size

The global Compound Semiconductor Market size was valued at USD 45.70 billion in 2023 and is projected to grow from USD 49.08 billion in 2024 to USD 89.08 billion by 2031, exhibiting a CAGR of 8.89% during the forecast period.

The rising need for energy-efficient power management systems across various industries, including data centers, consumer electronics, and industrial automation, is boosting the expansion of the compound semiconductors market.

In the scope of work, the report includes products offered by companies such as Broadcom Inc., NXP Semiconductors N.V., Qorvo Inc., Skyworks Solutions Inc., Wolfspeed Inc., Coherent Corporation, ON Semiconductor Corporation, Infineon, Technologies AG, Texas Instruments Incorporated, Nichia Corporation, and others.

Moreover, the growth of the semiconductor industry is a significant global factor driving technological advancement and economic development. This growth is fueled by rising demand for advanced semiconductors in emerging technologies such as 5G, artificial intelligence, and the Internet of Things (IoT).

As semiconductor technologies advance, they foster innovations across various sectors, including telecommunications, consumer electronics, automotive, and industrial applications.

• In September 2023, the Semiconductor Industry Association (SIA) announced that global semiconductor industry sales totaled USD 51.3 billion in July 2024. This figure represents an 18.7% increase from USD 43.2 billion in July 2023 and a 2.7% rise from USD 50.0 billion in June 2024.

A compound semiconductor is a crystalline material composed of two or more elements, typically from different periodic table groups, exhibiting distinct electrical and optical properties. Unlike elemental semiconductors such as silicon, compound semiconductors are made from elements such as gallium (from group III) and arsenic (from group V), or silicon and carbon.

These materials exhibit unique characteristics such as high electron mobility, direct bandgaps, and wide bandgaps, making them suitable for specialized applications in high-speed electronics, optoelectronics, and power devices. They are essential for high-frequency communication, LED lighting, and advanced power management systems.

Analyst’s Review

Advancements in Gallium Nitride (GaN) technology are revolutionizing the power semiconductor market and significantly contributing to the growth of the compound semiconductor market growth. GaN semiconductors are rapidly replacing traditional silicon-based power devices due to their superior performance in high-voltage and high-frequency applications.

GaN's unique properties, such as higher electron mobility, breakdown strength, and thermal conductivity enable faster switching speeds, greater efficiency, and reduced energy losses, making it highly sought after in various industries.

Leading companies such as GaN Systems, Infineon, and Transphorm are at the forefront of GaN innovation, continuously enhancing device performance and scalability. Additionally, the global research and development ecosystem is evolving, with new materials and fabrication techniques reducing production costs and enhancing the accessibility of GaN technology.

• In September 2024, Infineon Technologies AG introduced the world’s first 300 mm power gallium nitride (GaN) wafer technology. This achievement establishes Infineon as the first company globally toimplement this advanced technology within a scalable, high-volume manufacturing setting.

This innovation is expected to increase the demand for GaN-based power semiconductor, offering new opportunities for improved efficiency and performance across various applications.

Compound Semiconductor Market Growth Factors

The rapid expansion of the optoelectronics sector, fueled by applications in LED lighting, displays, and laser technologies, is significantly boosting the expansion of the compound semiconductors market. Indium Gallium Nitride (InGaN) and GaN are essential materials in high-performance LEDs, increasingly utilized in automotive lighting, electric vehicles consumer electronics, and energy-efficient building systems.

• In August 2023, GaN Systems, a global leader in GaN power semiconductors, formed a strategic partnership with ACEpower, a prominent Chinese manufacturer of power supplies, EV charging modules, and onboard chargers (OBC). The collaboration aims to promote the adoption of GaN technology in electric vehicles foster the adoption of the GaN-based EV power in China.

Moreover, with LiDAR technologies becoming integral to autonomous vehicles and 3D sensing applications, the demand for compound semiconductors in laser diodes and photodetectors is expected to rise. The energy-efficient properties of these materials are essential for achieving high brightness and extended lifespans in optoelectronic devices, thereby bolstering the expansion of the compound semiconductors market .

However, the development of the compound semiconductor market is hindered by the limited availability of key raw materials, such as gallium, indium, and rare earth elements. This results in increased material costs and production delays, impeding market growth.

To mitigate these challenges, companies are diversifying their supply chains by establishing multiple supplier agreements and exploring alternative sources of raw materials.

Additionally, investment in recycling technologies enables the recovery of valuable materials from electronic waste, reducing reliance on newly mined resources. Companies are further conducting research and development on substitute materials to reduce dependence on scarce resources and sustain growth in the market.

Compound Semiconductor Industry Trends

The global expansion of internet networks, particularly 5G, has significantly contributed to the growth of the compound semiconductors market. Compound semiconductors, especially materials such as Gallium Nitride (GaN) and Gallium Arsenide (GaAs), are critical for high-frequency, high-speed communication.

• According to the International Telecommunication Union (ITU), approximately 67% of the global population, equating to 5.4 billion people, were internet users in 2023. This marks a growth of 4.7% from 2022, surpassing the 3.5% increase recorded between 2021 and 2022.

Moreover, the increasing demand for millimeter-wave technologies and satellite communications, fueled by trends such as smart cities and IoT, compound semiconductors, is leading to the integration of compound semiconductors into advanced communication infrastructure. Their efficiency at higher frequencies is essential for advancing wireless communications and 6G development, ensuring sustained growth in this sector.

Furthermore, the rising integration of LiDAR technologies in autonomous vehicles and 3D sensing applications is expected to boost the demand for compound semiconductors in laser diodes and photodetectors. The energy-efficient properties of these materials make them indispensable for enhancing brightness and prolonging the lifespan of optoelectronic devices, thereby augmenting the growth of the compound semiconductor market.

Segmentation Analysis

The global market has been segmented based on product, end use industry, and geography.

By Product

Based on product, the market has been segmented into gallium nitride, gallium arsenide, silicon carbide, indium phosphide, and others. The gallium nitride segment led the compound semiconductor market in 2023, reaching a valuation of USD 15.82 billion. This expansion is largely attributed to its exceptional electrical properties, including higher energy efficiency, faster switching speeds, and superior thermal performance compared to traditional silicon semiconductors.

These advantages make GaN ideal for high-demand applications in 5G networks, electric vehicles (EVs), and consumer electronics, where performance and energy savings are critical. GaN’s ability to operate at higher frequencies and voltages has led to its widespread use in power converters, inverters, and fast-charging systems, particularly in the growing EV and telecommunications sectors.

By End Use Industry

Based on end use industry, the market has been classified into consumer electronics, telecommunications, automotive, aerospace & defense, healthcare, and others. The telecommunications segment secured the largest revenue share of 36.88% in 2023. Compound semiconductors such as Gallium Nitride (GaN) and Gallium Arsenide (GaAs) are essential for 5G infrastructure due to their higher frequencies, faster data transmission, and enhanced power efficiency.

As the demand for 5G, IoT, and high-bandwidth applications grows, telecom providers increasingly rely on these semiconductors to optimize network performance. Additionally, their use in satellites, radar systems, and microwave communications highlights their importance in telecommunications, thereby propelling the growth of the segment.

Compound Semiconductor Market Regional Analysis

Based on region, the global market has been classified into North America, Europe, Asia-Pacific, MEA, and Latin America.

Asia Pacific compound semiconductor market accounted for a substantial share of around 46.14% in 2023, with a valuation of USD 21.08 million. The rising production and sales of electric vehicles (EVs) in the Asia-Pacific region are fueling this growth. The Asia-Pacific region is emerging as a pivotal hub for the electric vehicle (EV) industry, leading to increased demand for advanced power electronics critical to EV systems.

• According to the International Energy Agency's 2024 report, China registered 8.1 million new electric cars in 2023, a 35% increase from 2022. Additionally, China exported over 4 million cars in 2023, becoming the world's largest auto exporter. Of these, 1.2 million were electric vehicles (EVs),refecting a significant rise from the previous year. Overall car exports grewnearly 65% compared to 2022, while electric vehicle exports increased by 80%.

North America is poised to witness significant growth at a robust CAGR of 9.58% over the forecast period. The increasing consumer demand for high-performance electronics, such as smartphones, wearables, and smart home devices, is fostering the adoption of compound semiconductors.

Optoelectronic components, including LEDs, laser diodes, and photodetectors, are integral to these devices and are commonly made from materials such as Indium Gallium Nitride (InGaN).

• According to a 2023 report by the U.S. Department of Energy, the widespread adoption of LED lighting is expected to significantly impact energy savings across the United States. By 2035, LED technology is projected to dominate lighting installations, with potential energy savings reaching over 569 TWh annually. This amount is equivalent to the annual energy output of more than 92 power plants, each with a capacity of 1,000 MW.

North America leadership in technological innovation and development fuels demand for advanced materials, propelling the expansion of the North America market.

Competitive Landscape

The global compound semiconductor market report will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions.

Strategic initiatives, including investments in R&D activities, the establishment of new manufacturing facilities, and supply chain optimization, could create new opportunities for market growth.

List of Key Companies in Compound Semiconductor Market

• Broadcom Inc.
• NXP Semiconductors N.V.
• Qorvo Inc.
• Skyworks Solutions Inc.
• Wolfspeed Inc.
• Coherent Corporation
• ON Semiconductor Corporation
• Infineon Technologies AG
• Texas Instruments Incorporated
• Nichia Corporation

Key Industry Developments

• June 2024 (Product Launch): Qorvo launched three new RF multi-chip modules (MCMs)for advanced radar applications, reinforcing its leadership in the sector. These modules utilize advanced packaging and process technology, offering compact size, superior performance, lower noise, and reduced power consumption, making them ideal for modern multifunction radar systems.
• January 2024 (Market Expansion): Nichia announced the commercialization of itschip-scale LED, the NFSWL11A-D6, which features a horizontal light distribution. This innovation addresses common issues associated with conventional LEDs, such as uneven lighting patterns and the need for thicker fixtures to mitigate glare.

The global compound semiconductor market has been segmented as below:

By Product

• Gallium Nitride
• Gallium Arsenide
• Silicon Carbide
• Indium Phosphide
• Others

By End Use Industry

• Consumer Electronics
• Telecommunications
• Automotive
• Aerospace & Defense
• Healthcare
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • U.K.
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia-Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America