Top 10 Trends in Compound Semiconductors You Need to Know

In today’s rapidly evolving tech landscape, compound semiconductors are more than just a niche topic—they're pivotal to innovation across industries. For instance, take the 5G infrastructure boom in South Korea, where high-performance compound semiconductors are powering faster, more reliable connectivity. Similarly, India has seen an uptick in the import of these materials, reflecting their growing importance in sectors like automotive, aerospace, and renewable energy.

From 2012 to 2022, global sales of semiconductor chips doubled to $602 billion, driven by the rapid pace of digitization and connectivity across industries. With 2,600 import shipments recorded last year alone, the strategic significance of these semiconductors is undeniable. So, what are the emerging trends shaping this dynamic market? Let’s explore the top 10.

What is a Compound Semiconductor?

Compound semiconductors comprise two or more elements from the periodic table's groups. This semiconductor, as opposed to the widely recognized silicon found in most computer chips, is composed of atoms from two or more different elements arranged in a crystal lattice structure.

These are made by mixing elements from Groups II and VI (cadmium telluride, CdTe) or Groups III and V (gallium arsenide, GaAs) of the periodic table. The procedure produces more diverse materials with distinct qualities than by using individual components alone.

Top 10 Emerging Trends in the Compound Semiconductor Market

The compound semiconductor market is undergoing a rapid transformation driven by advancements in technology, increased demand across sectors, and the need for more efficient and sustainable solutions. These semiconductors—such as gallium nitride (GaN) and silicon carbide (SiC)—are becoming essential in a wide array of applications, from 5G communications to electric vehicles.

According to Kings Research, the global compound semiconductor market is expected to generate a revenue of USD 89.08 billion by 2031. As industries shift toward more advanced technologies, it's important to stay updated on the emerging trends that are shaping the future of this market.

Here are the top 10 emerging trends in the market:

1. Rise of 5G and Compound Semiconductors

With the global rollout of 5G networks, there is a growing need for semiconductors that can handle high-frequency signals, faster speeds, and improved data transmission. Compound semiconductors like GaN and indium phosphide (InP) are essential in powering 5G infrastructure due to their ability to perform better than traditional silicon-based semiconductors in high-frequency environments.

These materials are crucial in the development of RF (radio frequency) devices, antennas, and base stations, making them a key component of the 5G revolution. These semiconductors are primarily used in the smartphone industry. Global 5G subscriptions are expected to reach approximately 5 billion by the end of 2028, according to the November 2022 Ericsson Mobility Report. The need for improved semiconductor materials that can handle higher frequencies and enhance mobile device performance is rising dramatically due to the boom in 5G technology.

2. Growth in Electric Vehicles (EVs) and Power Electronics

The electric vehicle (EV) market is growing exponentially, and with it comes the need for more efficient power electronics. Compound semiconductors like SiC are ideal for EV applications due to their ability to withstand high voltages and temperatures, making them perfect for power converters, inverters, and charging stations.

China recorded 8.1 million new electric cars in 2023, up 35% from 2022, according to the International Energy Agency's 2024 study. In addition, China became the greatest vehicle exporter in the world in 2023 after exporting more than 4 million cars. Of them, 1.2 million were electric cars, or EVs, which is a substantial increase over the prior year. Overall auto exports rose by around 65% from 2022 to 2023, while exports of electric vehicles rose by 80%.

Moreover, compound semiconductors account for 15% of Taiwan's GDP and are the chips that power everything from electric cars to cell phones.  More than 60% of all semiconductors produced worldwide, including the most sophisticated ones, are made in Taiwan. The majority are produced by Taiwan Semiconductor Manufacturing Corporation (TSMC), a single business.                            

As governments and automakers push for a shift toward electric mobility, SiC-based components are playing a vital role in increasing vehicle range and improving overall energy efficiency.

3. Expansion of IoT Devices and Sensors

The Internet of Things (IoT) continues to expand, with more connected devices being integrated into homes, factories, and cities. Compound semiconductors are critical for the high-performance sensors and RF components that enable these IoT systems to function seamlessly. From smart home devices to industrial automation, these materials provide the reliability and speed required for efficient data transmission and communication.

4. Advances in Optoelectronics and Photonics

Optoelectronics and photonics are two areas where compound semiconductors are making a significant impact. These materials are used in lasers, LEDs, and high-speed optical communication devices, which are critical for industries like telecommunications, healthcare, and defense.

Recent advances in optoelectronics using GaN, InP, and other semiconductors are enabling faster, more efficient communication technologies and innovations in medical imaging and diagnostics.

A 2023 report from the U.S. Department of Energy states that widespread LED lighting adoption is anticipated to have a major influence on energy savings nationwide. LED lighting installations are expected to take the lead in lighting installations by 2035, with potential yearly energy savings of around 569 TWh. This sum is the same as the yearly energy output of almost 92 power plants, each having a 1,000 MW capacity.

As demand for faster data speeds and high-resolution imaging grows, these semiconductors will continue to play a central role.

5. Quantum Computing and Compound Semiconductors

Quantum computing is one of the most promising technological frontiers, and compound semiconductors are helping to make it a reality. Materials like GaAs (gallium arsenide) are being used to create quantum bits (qubits), the fundamental units of quantum computing, due to their superior performance at subatomic levels.

As quantum computing evolves, these semiconductors will be essential in scaling up qubit performance, increasing computational power, and reducing energy consumption. This technology has the potential to revolutionize industries such as pharmaceuticals, cybersecurity, and artificial intelligence (AI).

6. Increased Adoption of GaN and SiC in Consumer Electronics

The compound semiconductor market is heavily influenced by the growth in wearables and smart home devices. The increasing consumer demand for high-performance electronics is fostering the adoption of these 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).

Solid-state lighting uses light-emitting diodes (LEDs), which are semiconductors that transform electricity into light. LEDs in white light and general illumination applications are currently the most energy-efficient and quickly evolving lighting technology, notwithstanding its initial widespread use in traffic and signal lights. Compared to traditional incandescent lights, LEDs can live up to 25 times longer and consume up to 90% less energy.

7. Sustainability and Energy Efficiency

With rising global concern about environmental sustainability, the semiconductor industry is under pressure to create eco-friendly technologies. Compound semiconductors are inherently more energy-efficient than traditional silicon semiconductors, enabling lower power consumption in electronic devices and industrial systems.

This trend is particularly significant in sectors such as renewable energy, where efficient power management is critical. Compound semiconductors will continue to contribute to the reduction of energy consumption and carbon emissions across multiple industries.

8. Integration in Renewable Energy Systems

Renewable energy technologies like solar power, wind energy, and energy storage systems are increasingly relying on these semiconductors. These materials are crucial for developing more efficient solar cells, wind turbine systems, and power management solutions, which are essential for the continued expansion of renewable energy.

SiC and GaN are particularly useful for improving the efficiency and durability of renewable energy systems, contributing to a more sustainable energy future.

9. Miniaturization of Semiconductor Devices

As technology becomes more compact, the need for smaller, more powerful semiconductor devices is growing. Compound semiconductors, with their superior performance in high-frequency and high-power applications, are enabling the miniaturization of key components in medical devices, aerospace systems, and wearable technology.

This trend towards miniaturization is driving innovation in industries like healthcare and defense, where compact, high-performance devices are critical for advanced applications like remote monitoring and precision navigation.

10. Investment and Mergers

The industry is seeing an influx of investment, with major players making strategic acquisitions and partnerships to capitalize on the growing demand for these materials. This consolidation is driving innovation, improving manufacturing capabilities, and fostering competition in the market.

Recent mergers and acquisitions are a testament to the industry's potential for growth, as companies aim to strengthen their foothold in this burgeoning market.

Concluding Thoughts

The compound semiconductor market is poised for remarkable growth, with emerging trends driving innovation across industries. From powering 5G networks and electric vehicles to enabling advances in quantum computing and optoelectronics, These semiconductors are at the forefront of technological progress.

As these trends continue to evolve, the market will play a pivotal role in shaping the future of electronics, energy, and communication, offering endless possibilities for innovation and growth.