Strategy Analytics Confirms IQE as Number One GaAs Epitaxial Substrate Supplier in 2007

Business Wire, August 5, 2008

Organic Growth and Acquisitions Secure 36% of the Market

BOSTON -- The report, "Markets for SI GaAs Epitaxial Substrates: 2007-2012," confirms earlier Strategy Analytics predictions that IQE would secure the top spot as a merchant supplier of both MOCVD and MBE material. IQE's acquisitions of Emcore and MBE Technology propelled the company to the number one position both in terms of material output and revenue. Strategy Analytics estimates that IQE commanded 36% of the merchant market in 2007.

It was also a milestone year for Taiwanese manufacturer, VPEC, as it edged ahead of Hitachi Cable, in terms of total material output to the merchant market in 2007. However, Kopin remained the world's number one supplier of SI (semi-insulating) GaAs MOCVD (metal organic chemical vapor deposition) epitaxial substrates. In the merchant SI GaAs MBE (molecular beam epitaxy) epitaxial substrate market, North American supplier IntelliEPI pushed ahead of French Soitec subsidiary, Picogiga, by 3 percentage points in 2007.

"With strong strategic relationships in place, market leaders like IQE and Kopin will benefit from continued demand SI GaAs epitaxial substrates, despite the macroeconomic concerns surrounding end markets for GaAs," predicts Asif Anwar, Director of the GaAs service at Strategy Analytics. "Demand for SI GaAs epitaxial substrates will grow by 7 percent year-on-year in 2008 and then 10% year-on-year in 2009."

Mr. Anwar concluded, "Captive production of epitaxial substrates at GaAs device manufacturers remains significant, accounting for 30 percent of total material output in 2007. Despite strong growth for the merchant vendors, we believe that overall RFMD will continue to be the world's largest producer of SI GaAs epitaxial substrates."

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