Gallium Nitride Rises Again, Opportunities and Challenges Coexist

Encouraged by the news that the entire industry is about to enter the national strategic plan, the third-generation semiconductor technology has once again become an Internet celebrity. Gallium nitride has received attention again because of its performance in the 5G and power markets.

Gallium nitride is a semiconductor material composed of nitrogen and gallium. Because its bandgap is greater than 2.2 eV, it is also called a wide bandgap semiconductor material. Gallium nitride is 3 times larger than silicon forbidden bandwidth, and the breakdown field strength is 10 times higher, saturated electron migration speed is 3 times higher, thermal conductivity is 2 times higher, gallium nitride is more suitable for high-power and high-frequency power devices than silicon. It is a breakthrough material for power semiconductors in the future.

China Is the World's Largest Gallium Metal Market

In the field of semiconductor materials, metallic gallium is one of the important raw materials for gallium arsenide and gallium nitride. At present, my country is the world's largest producer, consumer, and exporter of gallium metal. In 2019, my country's primary gallium production was 356.6 tons, a year-on-year decrease of 11.7%; consumption was 262 tons, basically the same as in 2018. At the same time, my country's primary gallium production and consumption accounted for 95.2% and 48.9% of the world's total.

The Application Scale of Downstream RF Devices Accounted for 91%

In terms of applications, gallium nitride is currently mainly used in the manufacture of radio frequency devices and power electronic devices. LED lighting, lasers, and detectors are currently the largest application market for gallium nitride, reaching a revenue scale of US$40 billion in 2019. In 2019, the market scale of radio-frequency gallium nitride accounted for 91% of the overall scale of gallium nitride.

However, the industry hopes that gallium nitride will achieve breakthroughs in both 5G radio frequency and power devices because there is a larger market space there.

The current 5G Sub-6 standard frequency does not exceed 6GHz, so gallium arsenide and LDMOS can meet the application, but to the 5G millimeter wave standard, LDMOS cannot be used, and the 28GHz band gallium arsenide can still fight, and the 40GHz band standard arsenic Gallium is very difficult, and gallium nitride is needed. The 67GHz standard frequency band is completely the world of gallium nitride, so we can say that 5G and gallium nitride are a perfect match in the future. 5G is a huge system, and its strength is supported by many forces. In this system, our China is slightly weaker in terms of chips, and the rest are ranked in the forefront of the world.

Gallium nitride power devices have high switching frequency, small on-resistance, and small capacitance, which can maintain a high level of efficiency under high-frequency conditions. In addition, due to the planar architecture, gallium nitride power devices can integrate peripheral driving and control circuits, making the IC smaller and significantly reducing costs. From optoelectronics to radiofrequency devices to power devices, gallium nitride has undergone a process of continuous expansion and breakthroughs in applications.

Gallium Nitride Is Expensive and It Will Take Time for A Full-Scale Outbreak

Gallium nitride is a substance that does not exist in nature, and it is completely artificially synthesized. Gallium nitride has no liquid state, so the method of the monocrystalline silicon production process cannot be used to pull out the single crystal. Gallium nitride single crystal materials are extremely rare, because of the long reaction time, many reaction by-products, demanding equipment, and extremely low productivity, so the price of 2 inches is as high as more than 20,000. Under the high cost, compared with silicon materials for cost and performance, the development of the gallium nitride industry is not mature enough, which has become an important reason why the gallium nitride market has not fully exploded.

Competing on the Same Stage, Opportunities and Challenges Coexist

From the perspective of gallium nitride industry chain companies, foreign companies maintain a relatively large lead in terms of technical strength and production capacity. In general, this material has experienced more than 30 years of development in Europe, America, and Japan forming a relatively mature industrial system.

The large-scale formal research on gallium nitride was carried out in China after 2008, led by government departments, and carried out in the form of special projects. After more than ten years of development, it has now begun to take shape. Especially in recent years, the industry has developed rapidly due to the enthusiasm for industrial investment. Compared with foreign companies, it is impossible to say that Chinese local companies have a large gap in technology accumulation.

However, both sides are now on the same starting line. The entire market has just started. For markets like fast charging of mobile phones, local manufacturers have more opportunities to enter, so that they can get many opportunities for verification and iteration. Local manufacturers are closer to the terminal market, and there are many opportunities to get in the distance. If local companies can coordinate their strategies with terminal manufacturers, they have the opportunity to become a world-class gallium nitride device company.

On the gallium nitride RF side, the supplier is mainly IDM enterprise. The advantage of the IDM model is that the entire production chain is self-controlled, which can reduce risks. Especially for the base station and automobile industry markets, the products tend to be customized, the replacement cycle is long, the reliability and stability of the product performance are more demanding, and the technical difficulty is great. In addition, the market space is small and it is difficult to have enough profit margins for design companies and manufacturing companies to share. The IDM model can better ensure product performance and profits. The IDM mode is that the growth of epitaxial materials, device design, and process manufacturing are basically completed independently by a single factory. However, under such a background, the supply chain operation is the biggest problem for the mass shipment of radiofrequency devices. However, with the increase in product integration, the foundry model has naturally emerged in the gallium nitride industry. Especially in the field of power devices, gallium nitride is more cost-sensitive and requires larger wafers to reduce costs, which only foundries can do. The choice between IDM and the foundry model is inconclusive and ultimately depends on the company's positioning in the market and its own level.

In short, the explosion of gallium nitride in the future has become a deterministic trend in the industry, and 5G and power semiconductors are the two main sectors. The objective differences between domestic and international companies cannot be caught up in the short term. Based on the innate advantages of the just-starting market and closer to the terminal, domestic companies are expected to shorten the distance from foreign companies and establish advanced companies with international influence.