EVs are emerging as a critical application area in the compound semiconductor industry, as many EV makers are resorting to MOSFETs or SiC Schottky barrier diodes (SBD) in DC-DC converters. The compound semiconductor materials market is projected to grow from USD 30 billion in 2025 to USD 91 billion in 2035, with an impressive CAGR of 11.7% during the forecast period, driven by increasing adoption in telecommunication, automotive, aerospace and consumer electronics sectors, according to a report by research firm Future Market Insights.

These advanced materials, including gallium arsenide (GaAs), gallium nitride (GaN), and indium phosphide (InP), offer superior performance compared to traditional semiconductors, enabling high-speed data transmission, enhanced power efficiency, and improved thermal stability.

Asia-Pacific dominates the market, with significant contributions from China, Japan, and South Korea, due to their strong semiconductor manufacturing ecosystem. North America holds a significant share in the compound semiconductor materials market, driven by strong demand from the telecommunications, aerospace, and defense sectors. The United States leads in GaN-based RF military satellite system amplifiers and radar technologies.

Electric vehicles (EV) are emerging as a critical application area in the compound semiconductor industry, as myriads of EV manufacturers are resorting to MOSFETs or SiC Schottky barrier diodes (SBD) in DC-DC converters, Future Market Insights said in a media release.

Recent developments in compound semiconductor technologies have enabled more efficient and cost-effective production methods. Innovations in epitaxial growth techniques, such as Molecular Beam Epitaxy (MBE) and Metal-Organic Chemical Vapor Deposition (MOCVD), have enhanced material quality and production scalability. Additionally, improvements in wafer processing and fabrication have led to increased yield and reduced manufacturing costs.

"The compound semiconductor materials market is experiencing an unprecedented growth trajectory, fueled by the rapid adoption of next-gen communication technologies, electric vehicles, and high-frequency applications,” said Nikhil Kaitwade, Associate Vice President at Future Market Insights (FMI). “Continuous innovations in semiconductor manufacturing and government support will play a crucial role in shaping the industry’s future.”

Despite finding immense usage in various end-use applications, such as sensor systems, wind turbines, and military systems, the growth of the global compound semiconductor market is underpinned by the telecommunication industry. 5G connectivity is offering huge opportunities for compound semiconductor manufacturers for telecom applications. Growth of the telecommunication industry is primarily driven by rising demand for radio frequency (RF) semiconductor devices. 

The technological shift from 3G to 4G/LTE and now into 5G connectivity has escalated network traffic through smartphones and triggered increased network interferences across communication channels. Usage of compound semiconductor materials is scaling up in wireless communication, given their high efficiency and speed over silicon-based semiconductors. Key players in this market include Wolfspeed, IQE, Sumitomo Electric Industries, WIN Semiconductors, and Nichia Corporation.