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Roskill: Gallium Market to Benefit as GaN-based LED Lighting Comes of Age

May 12, 2014

LONDON, May 12, 2014 /PRNewswire/ –

Demand for gallium is forecast to rise rapidly between 2014 and 2020 as general
lighting moves away from incandescent and fluorescent lamps to light-emitting diodes
(LEDs). This strong growth is not, however, likely to result in any tightness in supply as
the market is oversupplied and likely to remain so.

Production is dominated by China

Chinese capacity for primary gallium production (as a by-product of alumina) is
estimated to have risen from a third to 80% of the global total between 2009 and 2013.
Despite the increase in capacity, world production of primary gallium is estimated by the
USGS to have fallen by about 100t in 2013 to 280t. Some 220t of this was produced in
China, where stocks are accumulating. Recycling, particularly in Japan, is an important
element of supply.

Consumption is mainly in Japan but China is catching up

By far the largest market is in Japan, but its share of the global market is estimated
to have fallen from as high as 80% in the mid-2000s to about 50% in 2013. While Japan is
likely to remain the world’s dominant gallium market for some years, the growth of the
optoelectronics and electronics industries in China, together with the abundant domestic
supply of gallium, indicates that the Chinese market will eventually become the largest.
The global market for gallium is forecast to increase by 40% to about 422tpy by 2020 with
use in general lighting rising from 18% to 33% of total demand. Gallium’s use for
electronic power management will remain the largest market but will decline from 50% to
43% of the total.

The use of gallium nitride (GaN) semiconductors is expanding rapidly

The use of GaN-based integrated circuits and light-emitting diodes (LEDs) is widening
and increasing with a number of companies researching and developing its potential. The
use of gallium compound LEDs, particularly GaN-based, in all types of solid state lighting
(SSL) applications has become a major use for gallium. The SSL market comprises
architectural, commercial, consumer portable (for example, torches), industrial, outdoor
and residential, signals (for example, traffic lights) and motor vehicles. Architectural
lighting has been the largest market, but may be overtaken by outdoor and residential
lighting.

GaN power semiconductors can operate at higher temperatures, power levels, voltages
and frequencies than gallium arsenide and silicon. There are power applications for GaN in
power distribution, industrial and heavy electrical systems, and turbines, heavy
machinery, advanced industrial control systems and electro-mechanical computing systems.
It is also capable of working across a very broad range of other high-frequency,
high-power and microwave electronic devices used in cable TV, aerospace applications,
utility grids, electric vehicles and wireless applications such as base stations. GaN
semiconductors are also used in LEDs for backlighting of LCD flat panel displays in
computers, TVs and mobile telephones, and in signage.

Gallium arsenide (GaAs) semiconductors and semi-insulators remain an important market

GaAs has historically been the most widely used gallium compound semiconductor, the
main modern uses of which are in power amplifiers principally for cell (or mobile) phone
integrated circuits (IC) and in LEDs for backlighting of televisions, computers and
phones.

Speed is the main advantage of gallium arsenide (GaAs). It is a faster, more efficient
substrate material than silicon for integrated circuit chips because its electrons travel
approximately five times faster than they do in silicon. In addition to its speed
advantage, GaAs is able to operate over a wider range of temperatures than silicon, and
has much higher radiation hardness. It is, therefore, particularly useful for space
applications, and military hardware.

Thin film photovoltaic cells are potentially a growing market for gallium

A small amount of gallium is used in thin film copper indium gallium (di)selenide
(CIGS) photovoltaic (PV) cells. Thin film technology is being intensively researched,
because it is much lighter and more flexible than silicon crystal, and its use is growing.
The semiconducting materials used to absorb the sun’s rays are deployed as thin films only
a few microns deep. Amorphous silicon, cadmium telluride (CdTe) and copper indium
(di)selenide (CIS) compete with CIGS in the thin film market.

What impact will changes in the gallium market have on prices?

Despite growing demand for use in LED lighting, and a wide held expectation that
GaN-based LED lighting will become the norm in the next ten years, gallium prices in 2013
and the early part of 2014 fell to their lowest ever levels in real terms. This is because
gallium supplies from a combination of both primary and secondary sources are deemed more
than sufficient to meet any likely demand. With only eleven producers of primary gallium
in the world, seven of which are in China, it is possible that a producer price, based on
costs and a profit margin, could come into force. This may lead to a gradual increase in
prices from the very low levels seen in the first half of 2014.

For a more in-depth analysis of the gallium market, its sources of supply, its end use
sectors, and Roskill’s outlook to 2018, see the latest edition of Roskill’s Gallium:
Global Industry Markets & Outlook.

Roskill’s new Gallium: Global Industry Markets & Outlook contains full estimates for
2013, profiles on major producers and projects, an assessment of key market and
technological trends and an outlook for supply, demand and prices to 2018. This latest
edition from Roskill Information Services Ltd, 54 Russell Road, London SW19 1QL ENGLAND
can be ordered by Tel: +44-20-8417-0087, Fax +44-20-8417-1308,
Email:info@roskill.co.uk or Roskill’s Website: http://www.roskill.com/gallium

Note to editors

Roskill Information Services Ltd. of London, UK is a leading provider of multi-client
and bespoke market research services to the minerals and metals industry.

The new gallium report contains 121 pages, 45 tables and 17 figures plus an appendix
of international trade statistics. It provides a detailed review of the industry, with
subsections on the activities of the leading producing companies. It also analyses
consumption, trade and prices.

For further information on this report, please contact Robert Baylis,
rbaylis@roskill.co.uk or +44-20-8417-0087.

SOURCE Roskill Information Services


Source: PR Newswire



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