Friday, January 2, 2009

Economic Ups and Downs

As we kick off the new year, we will be posting our thoughts and related news items that discuss economic trends we see in the hope of gaining some insight into the markets that will grow this year as we try to pull out of this recession. This is certainly a time where market focus is more important than ever and targeting growth markets and any other market opportunities that arise will be a key to success. In this type of economic market, we believe that new product development and targeted marketing are two key areas to concentrate on.

Strategy Analytics (SA) recently posted two new market reports about three-five devices. One focuses on the GaN market in which they state that the majority of demand will come from the defense market (55%) with a compound annual average growth rate (CAAGR) of 98 percent through to 2012 for the market as a whole. There are still many opportunities in the commercial infrastructure market also but these are challenged more by improving GaAs and Si technologies. I have seen a strong new set of high voltage Si technologies targeting this market along with some of the lower frequency defense markets and would agree with this assessment.

This is certainly a good opportunity for those companies involved in GaN technology compared to some other markets. SA also believes that SiC will remain as the dominant substrate material. You can review the entire release here.

In a second report about the GaAs market, SA still expects a 9% growth in the GaAs market for 2008 but has revised their estimate for 2009 to be a 5% contraction year on year due to the current economic conditions. SA does expect the market to return to growth in 2010 which is a good sign.

Most of the market contraction is due to the cellular handset market which constitutes 70% of the GaAs market but they expect the defense market to be unaffected by the decline through 2012. SA expects the WiFi will grow to the second largest market by 2012 with a 20% CAAGR. The full release can be found here.

What do you think? We would like to hear which markets you think will offer significant growth this year.