Cell phones step on GaAs, but watch out for silicon

Dr. Robert N. Castellano, The Information Network

NEW TRIPOLI, USA: Every cell phone contains Power Amplifiers (PA), which enables the handset to transmit voice and data back to the base station tower to route a call to another phone number or Internet address. PAs, the most critical RF component in the phone are currently dominated by circuits made with Gallium Arsenide (GaAs). I say currently because the dynamics in the cell phone and chip industries is trying to usurp GaAs’s last arena.

I’ve been analyzing the GaAs industry since before starting The Information Network when I was working with a company in Palo Alto called Strategic Inc. in 1983. At that time, there was a joke in the industry that more money was spent on market reports on GaAs than on GaAs chips themselves. While GaAs has a lot of advantages over chips made of silicon, GaAs kept shooting at a moving target because, as we are all aware, Moore’s Law for silicon chips means they keep getting smaller and more powerful all the time.

3G handsets often contain up to five PAs, and GaAs makes up 100 percent of the market, which is close to $5 billion. In addition, the number of PAs per handset is growing because of: complex 3G systems, global roaming support, and data roaming support. Pricing for PA’s has increased from $0.80 per handset to $2.90 currently and is projected to increase to greater than $3.50 once Long Term Evolution (LTE) and Advanced Wireless Services (AWS) spectrum emerge in advanced handsets in the marketplace.

While industrialized countries are using 3G networks (aren’t we all getting tired of those AT&T versus Verizon ads), today’s world is a mixture of 2/2.5G and 3G networks, the heavy majority of subscribers are actually on 2G-based networks — and predicted to remain so for a number of years as shown in the chart below: In 2007, total global cell phone subscribers numbered 2.3 billion, with 351 million of those subscribers on 3G3 — approximately 15 percent. Of new handsets sold in 2010, about 50 percent will still be 2G. Between 70 to 80% of Skywork’s and RF Micro Device’s GaAs business is in PAs.

2G handsets contain two PAs, so it represents a sizable market. Because they aren’t as technologically advanced as 3G cell phones, particularly smartphones, silicon is making inroads in the GaAs domain. For 2009, only 90 percent of PAs were made in GaAs, 5 percent in silicon CMOS, and 5 percent in silicon LDMOS.Source: The Information Network, USA

Besides the technical dynamics, Skyworks has positioned in the market by the mid-2009 acquisition of CMOS PA supplier Axiom Micro Devices. Also, in September 2009, privately held Black Sand announced the world’s first 3G CMOS RF PA. Black Sand’s proprietary CMOS PA architecture offers a breakthrough in combined performance, cost, battery life, and reliability for mobile devices.

Replacing GaAs with CMOS can improve manufacturing yield, performance, cost, battery life, and call quality. GaAs cost is ~$0.10/mm2. CMOS cost depends of course on process node, but mature CMOS technology pricing is often $0.05/mm2 or lower, even as low as $0.02/mm2.

Black Sand’s RF PA products are targeted at mobile phones and other 3G wireless devices, such as datacards and netbooks. These represent another potentially lucrative market for PAs. I estimate the PA market share for WiFi by technology for 2009 is estimated at 70 percent GaAs, 20 percent silicon CMOS (integrated onto the WiFi chip), 10 percent bipolar SiGe (silicon germanium).