[Special Stock] RF Muteo, Next-Generation GaN Technology Eyeing Samsung... National Project on GaN Application Technology

[Asia Economy Reporter Hyungsoo Park] RF Materials' stock price is on the rise. The next-generation power semiconductor, Gallium Nitride (GaN) power semiconductors, is expected to record an average annual growth rate of around 70%, driven by smartphone fast chargers, 5G mobile communications (5th generation), and the automotive sector, which appears to be influencing the stock price. GaN power semiconductors are gaining attention for their advantage of having higher power efficiency compared to conventional Silicon (Si) semiconductors.

As of 10:54 AM on the 12th, RF Materials is trading at 32,150 KRW, up 11.25% from the previous day.

The Ministry of Trade, Industry and Energy has selected RF Materials for the project “Localization of Manufacturing Technology for Industrial High-Power Laser Diode Chips and Modules,” which supports the development of materials, parts, and equipment (SoBuJang) companies.

This project, receiving a total government subsidy of 17 billion KRW, is led by RF Materials as the general project manager. Optowell, Electronics and Telecommunications Research Institute (ETRI), and Korea Photonics Technology Institute (KOPTI) are participating in the development of GaN and Gallium Arsenide (GaAs) epi-materials and laser diode chips using these materials.

Laser diodes are core components used in various fields such as optical communications, LiDAR for autonomous driving, industrial high-power laser processing equipment, and medical and healthcare devices. High-power laser diodes have been entirely dependent on imports. The project aims to develop high-power laser diodes and multi-kilowatt high-power laser diode modules using them, localizing what was previously fully imported, and is expected to be applied to defense, industrial products, and medical devices.

The parent company RFHIC’s recently promoted GaN epi wafer business for electronic devices and this project’s GaN-based optoelectronic device field are expected to create significant synergy when linked in the future.

According to market research firm IDTechEx, laser diode technology is widely used in material processing, medical, display, optical communication and data storage, defense, and sensor fields, showing a high annual growth rate of over 10%. The total market size is expected to grow more than threefold from 4.6 billion USD in 2018 to 14 billion USD by 2029.

An RF Materials official stated, “We will closely cooperate with domestic SMEs, research institutes, and universities to ensure the success of the core original technology project, and we will do our best to secure localization and export competitiveness in the high-power laser diode field.”

According to market research firm Yole D?veloppement, the GaN power semiconductor market is expected to grow from 46 million USD (approximately 51.5 billion KRW) last year at an annual rate of 70%, reaching 1.1 billion USD (approximately 1.2315 trillion KRW) by 2026. Swiss STMicroelectronics, which supplies SiC semiconductors for Tesla’s Model 3 electric car, is actively investing in GaN. Samsung Electronics is also reportedly considering acquiring STMicroelectronics.

Compound semiconductors such as GaN have a wide bandgap (the energy gap between energy levels) and high-temperature stability. Compared to single-element semiconductors like Si, GaN consumes 75% less power. Moreover, GaN is known to have higher performance than SiC semiconductors, which evolved from silicon semiconductors. Recently, GaN semiconductors have been mainly used in wireless communication (RF) equipment, home appliances, and power conversion devices.

Since the COVID-19 pandemic, power efficiency in mobile devices has become even more important. Because external power supply is unavailable, maximizing operation time with high power efficiency is a key product competitiveness factor. This is the background for the expected significant increase in GaN semiconductor demand and adoption rates. Our government is also focusing on GaN power semiconductors. It has set plans to develop more than five commercialized products by 2025 and to establish 6-8 inch foundry infrastructure domestically. Former Minister of Trade, Industry and Energy Sung Yun-mo said, “Next-generation power semiconductors are core components in AI, 5G, autonomous vehicles, and renewable energy fields. The government plans to actively support research and development (R&D) and infrastructure to preoccupy the still early next-generation power semiconductor market and secure future competitiveness.”