Lux: Epi-Wafer Market to Hit $4B in 2020, Sapphire Still Dominates Silicon

As LED lighting becomes an $80 billion industry, the market for the epitaxial wafers (epi-wafers) the diodes are made from will grow to $4 billion in 2020, according to a new report from Lux Research.

The vast majority of epi-wafers are made from gallium nitride (GaN)-on-sapphire, but GaN-on-silicon is the leading emerging technology because silicon is just one-eighth the cost of a sapphire substrate. However, technical challenges will continue to limit silicon’s market share, which will be only 10 percent in 2020, while the GaN-on-silicon carbide (SiC) technology championed by Cree will grow to an 18 percent market share, Lux said.

“Silicon is already widely used for electronics, and some LED die manufacturers are hoping to take advantage of silicon substrates,” said Pallavi Madakasira, Lux research analyst and lead author of the report, “Dimming the Hype: GaN-on-Si Fails to Outshine Sapphire by 2020.” “But GaN-on-Si is more prone to cracking than GaN-on-sapphire, and mitigating this mismatch is expensive,” she added.

Lux analysts also determined that:

Choice and cost of LEDs will determine adoption. Where GaN-on-sapphire is suited to all applications, GaN-on-bulk GaN will be relegated to niche commercial lighting and GaN-on-Si, with unproven performance, will be better suited to cost-sensitive residential applications.
4-in. wafers will rule, though 6-in. wafers start to rise in popularity. Four-in. wafers will peak at 62 percent market share with $2.1 billion in 2017 sales. The industry will move toward 6-in wafers, and by 2020 its 35 percent market share will be equivalent to $1.4 billion.
Technology will advance sapphire substrates, and new methods like hydride vapor phase epitaxy (HVPE) will further improve throughput and cut costs, keeping sapphire highly competitive for the rest of the decade.

More information about the report, part of the Lux Research Energy Electronics Intelligence service, is available at: www.luxresearchinc.com