Metal organic chemical vapor deposition (MOCVD) equipment is used by semiconductor manufacturers for depositing very thin layers of compound material onto a semiconductor wafer. These multilayer semiconductor structures are then used in electronic and optoelectronic components like LEDs, lasers, power transistors, and photovoltaic cells.
Although the MOCVD market is projecting decent growth, with a CAGR of 14.13 percent from 2013-2018, for every factor driving growth in the market, there is an equally strong challenge mitigating that growth.
TechNavio analysts have taken a look at the ups and downs of the MOCVD market, and compiled a list of what’s helping and what’s hindering market growth.
Driver: Increasing Demand for LEDs
Driver: Increasing Demand for LEDs LEDs are being used for everything from traditional lighting and backlighting to consumer electronics like phones, computers and televisions. MOCVD equipment is a major part of LED production, and therefore increased use of LEDs is contributing to demand for MOCVD equipment.
Challenge: LED Oversupply
Challenge: LED OversupplyIn fact, the demand for LEDs has actually led to oversupply issues, which could be detrimental to the market. High inventory of LED chips, packaged LEDs, and LED lamps in the supply chain is affecting vendors’ profitability. This could result in lower capital expenditure by vendors, including less installation of MOCVD equipment.
Driver: Increased Demand for Renewable Energy Sources
Consumers are shifting towards renewable energy sources such as solar power to save on electricity costs, which has increased the installation of photovoltaic cells. These cells are highly efficient and inexpensive, which has encouraged semiconductor manufacturers to enter the industry. Semiconductor manufacturers are using MOCVD equipment to manufacture high-efficiency triple junction photovoltaic cells, which offer maximum efficiency in converting sunlight to electricity.
Challenge: Cyclical Nature of the Semiconductor Industry
The demand in the Global MOCVD Equipment market is highly dependent on the global semiconductor market, which in turn depends on sales of semiconductor-based electronic devices. Any demand fluctuation can cause fluctuations in the supply chain. Irregularity in demand for electronic devices will pose a major challenge to the growth of the Global MOCVD Equipment market.
Driver: Increasing Adoption of Mobile Devices
High adoption of mobile devices such as laptops, mobile phones, smartphones, tablets, notebook PCs, and PDAs has increased the demand for semiconductors. The growth in the Global Mobile Computing Devices Market is expected to trigger the demand for semiconductors which will increase the production of semiconductors and semiconductor production equipment during the forecast period and will therefore influence the growth of the Global MOCVD Equipment market.
Challenge: High Complexity in MOCVD Process
MOCVD technology involves complex chemical processes and reactions, and MOCVD precursors used in the deposition process are highly toxic, explosive, and corrosive. To top it off, the whole process is usually carried out at a very high temperatures, and the films deposited on materials with different thermal expansion coefficients can stress, which causes mechanical instabilities in the deposited films. As a result, there are growing concerns associated with personnel safety, and environmental impact in device fabrication operations, which could adversely affect the Global MOCVD Equipment market.
For more insights into what’s causing ups and downs in this market, view our Global Metal Organic Chemical Vapor Deposition Market 2014-2018 report.
