The government has made the decision to concentrate on “niche” opportunities in the semiconductor industry, such as silicon carbide or gallium nitride chips (also known as compound semiconductors), where it believes it can soon become a “global leader”.
Global demand for chips powered by these technologies is increasing because of their use in various industries, including power electronics, communications equipment, LED applications, automobiles, trains, and aeroplanes.
Since silicon is now being replaced by compound semiconductors in many industries, demand for these materials has increased. Compound semiconductors have long been employed in radio frequency applications. The importance of focusing on specialized semiconductor opportunities may be shown in the fact that the global market for compound semiconductors is predicted to reach $119.13 billion by 2030 after crossing $43.23 billion in 2022 (the entire market value of semiconductors is approximately $570 billion).
When compared to a silicon-based fab plant, compound semiconductors can be produced more quickly (18 months as opposed to three to four years). Additionally, they are in demand throughout all markets in the world. Many businesses are eager to enter the market, and according to analysts, they often require far less capital than a silicon fab plant, which necessitates a minimum expenditure of $5–7 billion.