The staying power of gallium arsenide is paying off for Win Semiconductors, one of the largest contract manufacturers for the chips, which are used widely in smartphones and wireless infrastructure.
That came through clearly in the foundry's quarterly earnings. The results announced Monday reflected the fact that suppliers had been slow to replace gallium arsenide – more commonly known as GaAs – with silicon and other compound semiconductors like gallium nitride.
Though expensive, power amplifiers based on GaAs still pump out more powerful signals at higher frequencies than silicon. Though the chips are less efficient than gallium nitride in high power applications like radar, GaAs excel in small-signal devices, especially where low noise is required.
Win has also reaped returns from companies packing more wireless chips into smartphone front-ends to communicate over a wider range of frequency bands. The company's net income in this year's second quarter rose to around $24.05 million, up 47% from the previous quarter and 3% from the same quarter last year.
Win's results come after the company updated its newest factory in May to increase GaAs output by around 5,500 wafers per month. The foundry has installed equipment for growing other compound semiconductor wafers, etching massive microwave integrated circuits, and fabricating optical devices.
Kyle Chen, Win’s chief operating officer, said that Fab C would more than double the company's wafer capacity when it is finished. Located in Guishan, Taiwan, the factory started filling orders last year for smartphone and wireless infrastructure products, spitting out wafers that measure 150 millimeters in diameter.
Eric Higham, an industry analyst for Strategy Analytics, wrote in a February report that around 70% of the wireless chip industry's revenues would be from gallium arsenide in 2021, down from 80% of the industry’s business in 2016. Other compound semiconductors like GaN and indium gallium phosphide would grow the fastest, he said.
Win's revenue for the quarter increased to $126.4 million, up 16% from last quarter, and up 7% over last year's second quarter results. The company predicted that its revenue in the third quarter of the year would be between 10 and 15% higher than this quarter's.
