Compound Semiconductor Foundries: 2025 Disruption & Billion-Dollar Growth Secrets Revealed

Table of Contents

• Executive Summary: 2025 at the Crossroads of Innovation
• Market Size, Forecasts & Revenue Outlook Through 2030
• Key Players & Competitive Landscape (2025 Spotlight)
• Emerging Technologies: GaN, SiC, and Beyond
• Major End-Use Applications: 5G, EVs, Aerospace, and More
• Supply Chain Dynamics & Foundry Capacity Expansion
• Regional Hotspots: Asia, North America, Europe Trends
• Strategic Partnerships, M&A, and Investment Activity
• Challenges: IP, Talent Shortages, and Geopolitical Risks
• Future Outlook: Next-Gen Materials and Market Trajectories
• Sources & References

Executive Summary: 2025 at the Crossroads of Innovation

In 2025, compound semiconductor foundries stand at a pivotal juncture, underpinning the rapid evolution of next-generation technologies spanning 5G/6G communications, electric vehicles (EVs), advanced sensing, and artificial intelligence. Distinct from traditional silicon, compound semiconductors such as gallium nitride (GaN), gallium arsenide (GaAs), and silicon carbide (SiC) offer superior properties—higher electron mobility, greater thermal conductivity, and efficiency at high voltages—making them indispensable for high-frequency, power, and optoelectronic applications.

Global foundry capacity for compound semiconductors is experiencing marked expansion. Leading foundries such as Wolfspeed and ON Semiconductor have announced significant investments in SiC and GaN wafer fabs in the US and Europe, aiming to meet surging demand from the automotive and renewable energy sectors. Wolfspeed’s Mohawk Valley Fab, inaugurated in 2023, is ramping up to full-scale 200mm SiC wafer production in 2025, targeting a multi-year supply agreement with major automotive manufacturers. Similarly, Infineon Technologies AG is expanding its Kulim, Malaysia SiC and GaN facility, aiming for sizable output increases by 2025 to support electrification trends.

Foundry services are rapidly evolving from pure-play manufacturing toward integrated design, prototyping, and packaging solutions. IQE plc is scaling its epitaxial wafer services for GaAs and GaN, leveraging partnerships with leading device makers to accelerate time-to-market for advanced RF and photonics applications. In Asia, WIN Semiconductors Corp. continues to expand GaAs and GaN foundry capacities, while Vanguard International Semiconductor Corporation is investing in power semiconductor foundry capability, reinforcing Taiwan’s leadership in the sector.

Looking ahead, industry forecasts anticipate continued double-digit annual growth in compound semiconductor foundry revenues through the end of the decade, driven by electrification, high-speed connectivity, and AI hardware. However, the sector faces challenges including wafer supply constraints, process complexity, and the need for skilled talent. Public and private investments—such as those enabled by the US CHIPS and Science Act and EU Chips Act—are expected to bolster capacity expansions and R&D. By 2025, compound semiconductor foundries will be critical enablers of global innovation, with their strategic importance only set to increase as the world transitions to more electrified and connected systems.

Market Size, Forecasts & Revenue Outlook Through 2030

The compound semiconductor foundry market continues its ascent in 2025, propelled by demand for advanced RF, power electronics, and optoelectronic devices. These foundries specialize in materials such as gallium arsenide (GaAs), gallium nitride (GaN), indium phosphide (InP), and silicon carbide (SiC), which offer performance advantages in high-frequency, high-power, and photonic applications over traditional silicon. As of 2025, leading foundries like WIN Semiconductors Corp., Global Communication Semiconductors, LLC, Sanan IC, and IQE plc are investing in capacity expansions and new process technologies to address surging demand from 5G infrastructure, EV power modules, and datacenter photonics.

The compound semiconductor foundry segment is expected to achieve a robust compound annual growth rate (CAGR) of approximately 8-12% through 2030, with total revenues forecast to surpass $10 billion by the decade’s close, up from an estimated $6-7 billion in 2025. This trajectory is underpinned by several key trends: the rapid deployment of 5G and 6G wireless networks (driving RF front-end module demand), accelerated electrification in automotive (increasing use of SiC and GaN for efficient inverters and chargers), and the proliferation of optical transceivers in cloud and AI datacenters (relying on InP and GaAs photonics).

• WIN Semiconductors Corp. reported record revenue in 2024 and has announced ongoing investments in their capacity for 6-inch and 8-inch GaAs wafer lines to meet growing customer requirements for RF applications.
• Global Communication Semiconductors, LLC is expanding its portfolio of GaAs and GaN foundry services, citing increased design wins in 5G, Wi-Fi 7, and defense sectors as demand drivers.
• Sanan IC is scaling up production capabilities in both GaN for RF and power electronics, and InP for photonics, with new fab investments aimed at high-volume applications in automotive and datacenter markets.
• IQE plc is ramping up epiwafer supply for compound semiconductors, supporting global foundry customers addressing connectivity, sensing, and power management.

Looking ahead, the outlook for compound semiconductor foundries remains strong. Growth will be reinforced by government initiatives to localize supply chains for strategic materials, continuous advances in wide bandgap device technologies, and the expanding adoption of compound semiconductors across new verticals. Strategic partnerships between foundries and integrated device manufacturers are also expected to deepen, further accelerating innovation and market penetration through 2030.

Key Players & Competitive Landscape (2025 Spotlight)

The global landscape for compound semiconductor foundries in 2025 is marked by both consolidation and strategic expansion as demand for high-performance electronics, particularly in power electronics, automotive, 5G/6G infrastructure, and optoelectronics, accelerates. Compound semiconductors, such as gallium nitride (GaN), silicon carbide (SiC), and gallium arsenide (GaAs), have become increasingly vital due to their superior electron mobility, high-temperature tolerance, and efficiency over silicon.

Key players in this sector are making significant investments to scale up capacity and secure technology leadership. Wolfspeed, Inc. (formerly Cree) continues to lead in SiC wafer production and device fabrication, having ramped up its Mohawk Valley Fab in New York—the world’s largest 200mm SiC fabrication facility. In 2024, Wolfspeed announced plans to expand capacity further to meet the surging demand from electric vehicle (EV) and renewable energy markets, with full ramp-up expected through 2025 and beyond.

ROHM Co., Ltd. and Infineon Technologies AG have also committed to significant SiC investments. Infineon began volume production at its Kulim (Malaysia) fab, aiming to triple SiC revenue by 2027, while ROHM has expanded its Chikugo and Apollo plants, focusing on vertical integration to secure wafer-to-device control.

In GaN foundry services, Taiwan Semiconductor Manufacturing Company (TSMC) and Vanguard International Semiconductor Corporation have both accelerated their efforts. TSMC’s GaN-on-Si manufacturing platform is now available for mass production, targeting applications in power conversion and RF for 5G and automotive, with continued R&D into higher voltage and breakdown performance.

Specialist pure-play foundries like WIN Semiconductors Corp. remain leaders in GaAs and InP process technologies for wireless, photonics, and high-frequency applications, regularly introducing new process nodes and expanding wafer capacity at their Taiwan sites to serve global RF device makers.

Looking ahead, the competitive landscape is expected to intensify. Major players are forging strategic partnerships with automotive OEMs and telecom equipment manufacturers to secure long-term supply agreements. Meanwhile, advanced process development—such as 8” (200mm) SiC and GaN-on-Si integration—will be key differentiators. The industry is also seeing increased vertical integration and efforts to localize supply chains in response to geopolitical tensions and critical material constraints, indicating that the next few years will be pivotal for market share realignment and technological breakthroughs.

Emerging Technologies: GaN, SiC, and Beyond

The compound semiconductor foundry landscape is undergoing rapid transformation in 2025, driven by the escalating demand for materials such as gallium nitride (GaN) and silicon carbide (SiC). These materials are key enablers for applications in electric vehicles (EVs), advanced power electronics, and next-generation wireless infrastructure, including 5G and emerging 6G systems.

Leading pure-play foundries and integrated device manufacturers (IDMs) are ramping up investment and capacity for compound semiconductors. Wolfspeed continues to expand its SiC wafer and device manufacturing footprint, with its new materials facility in North Carolina targeting a 10-fold increase in SiC production by the end of the decade. Similarly, onsemi has completed the acquisition and ramp-up of its SiC boule growth and wafer fabrication facilities, focusing on vertical integration and supply chain control for automotive and industrial markets.

In the GaN sector, foundries such as Mitsubishi Electric are pushing the boundaries of GaN-on-Si and GaN-on-SiC technologies for high-frequency RF and power applications. MACOM Technology Solutions has also reported volume shipments of GaN-on-SiC devices for telecom and aerospace markets. Further, imec, a renowned R&D hub, has partnered with industrial stakeholders to accelerate 200mm GaN-on-Si pilot lines, aiming to facilitate the transition from niche to mainstream manufacturing.

Taiwanese foundries are also entering the sector. Taiwan Semiconductor Manufacturing Company (TSMC) has publicly confirmed the introduction of GaN process technologies for power ICs, targeting automotive and consumer segments. Vanguard International Semiconductor Corporation (VIS) has announced plans to develop 8-inch GaN and SiC foundry services, leveraging Taiwan’s advanced semiconductor ecosystem.

Outlook for the next several years points to significant capacity expansions, process node improvements (for example, 650V and 1200V classes for SiC), and the emergence of new entrants, including foundry services from traditional silicon players. Industry bodies like Semiconductor Industry Association highlight the strategic importance of domestic compound semiconductor supply chains, with public and private investments accelerating in the US, Europe, and Asia. As EV adoption and renewable energy deployments grow, demand for GaN and SiC foundry capacity is expected to outpace silicon, driving innovation and collaboration across the value chain.

Major End-Use Applications: 5G, EVs, Aerospace, and More

Compound semiconductor foundries are experiencing robust demand growth in 2025, propelled by their critical role in advanced applications such as 5G wireless infrastructure, electric vehicles (EVs), aerospace systems, and high-performance computing. These foundries specialize in materials like gallium nitride (GaN), silicon carbide (SiC), and gallium arsenide (GaAs), which offer superior efficiency and performance compared to traditional silicon-based semiconductors.

In the 5G sector, compound semiconductors are foundational for radio frequency (RF) components that require high-speed operation and low power loss. Leading foundries, such as WIN Semiconductors and Sumitomo Electric Industries, are actively expanding their GaAs and GaN process lines to meet surging demand for 5G base stations and mobile devices. For instance, WIN Semiconductors has ramped up its GaAs wafer capacity to address the needs of global telecom infrastructure suppliers.

The electric vehicle market is another significant growth engine. SiC and GaN devices enable higher voltage operation, faster charging, and improved power conversion efficiency in EV drivetrains and charging stations. Wolfspeed (formerly Cree) operates one of the largest SiC foundries globally and has announced capacity expansion plans through 2026 to supply leading automotive OEMs and tier-1 suppliers. Similarly, ROHM Semiconductor has invested in additional SiC production lines, targeting both EVs and renewable energy sectors.

Aerospace and defense applications leverage the radiation hardness and high-frequency performance of compound semiconductors for satellite communications, radar, and avionics. Northrop Grumman continues to develop GaN and GaAs solutions for government and commercial aerospace systems, while Qorvo supplies foundry services for high-reliability RF components used in both space and defense markets.

Looking ahead to the next few years, the outlook for compound semiconductor foundries remains exceptionally strong. The transition to 6G networks, wider EV adoption, increased satellite launches, and emerging markets in high-performance computing and AI are expected to further drive demand. Industry leaders are investing heavily in new fabs, advanced process nodes, and vertical integration to secure supply chains and meet customer requirements. As of 2025, compound semiconductor foundries are positioned at the core of innovation across multiple high-growth sectors, underpinning next-generation technologies worldwide.

Supply Chain Dynamics & Foundry Capacity Expansion

The compound semiconductor foundry sector is experiencing significant transformation as global demand for high-frequency, high-efficiency devices accelerates. In 2025, the supply chain is under pressure from key markets such as 5G, electric vehicles (EVs), and renewable energy, which increasingly rely on materials like gallium arsenide (GaAs), gallium nitride (GaN), and silicon carbide (SiC). This demand surge has prompted major capacity expansion initiatives among leading foundries, as well as heightened investment in localized supply chain strategies.

Prominent foundries are actively ramping up their production capabilities. For instance, Wolfspeed inaugurated the world’s largest silicon carbide materials facility in North Carolina in 2023, with plans to continue expanding through 2025 and beyond. This site is expected to triple Wolfspeed’s SiC materials output, targeting the automotive and power sectors. Similarly, onsemi has expanded its SiC manufacturing footprint with a new facility in the Czech Republic, scaling up capacity to meet automotive and industrial power device demand.

Asian foundries remain pivotal in compound semiconductor production. Wafer Works Corporation and Global Communication Semiconductors, LLC (GCS) have both announced new wafer production lines and strategic investments in 2024, aimed at bolstering supply chain resilience and reducing lead times for global clients. These efforts are complemented by Coherent Corp. (formerly II-VI Incorporated), which launched a new compound semiconductor foundry in China to scale up epitaxial wafer supply for photonic and RF applications.

The sector faces ongoing challenges, including supply chain bottlenecks for specialty substrates and precursor chemicals, as well as geopolitical uncertainties that impact global logistics. In response, foundries are increasingly pursuing vertical integration and sourcing diversification. For example, ROHM Semiconductor is investing in in-house SiC substrate production, while Infineon Technologies AG is expanding its European manufacturing footprint to mitigate risk and support local supply chains.

Looking ahead to the next few years, industry analysts predict that compound semiconductor foundry capacity will continue to grow at a double-digit rate, especially in SiC and GaN segments. This is driven by increasing electrification, digitalization, and the global push for energy efficiency. The foundry sector is expected to see further consolidation, strategic alliances, and government-backed investments, all aimed at ensuring long-term supply stability and technological leadership.

Regional Hotspots: Asia, North America, Europe Trends

The global landscape for compound semiconductor foundries is experiencing significant regional dynamism, with Asia, North America, and Europe each leveraging their unique strengths to advance technology and market share. As of 2025, Asia, particularly Taiwan, South Korea, and China, retains a dominant position in terms of production capacity and technological leadership. Taiwan Semiconductor Manufacturing Company (TSMC) continues to expand its compound semiconductor capabilities, investing in gallium nitride (GaN) and silicon carbide (SiC) technologies to meet rising demand in power electronics and RF applications. Wafer Works and WIN Semiconductors have also scaled their GaAs and GaN foundry services, supporting sectors from 5G infrastructure to automotive electronics.

China is aggressively investing in domestic compound semiconductor capabilities to reduce reliance on foreign suppliers, with major players like Sanan IC and GlobalWafers expanding fab capacity and R&D into SiC and GaN devices. The Chinese government’s policy support and funding initiatives are expected to accelerate advancements and close the technology gap with established international competitors over the next few years.

In North America, the focus is on high-value, defense, and electric vehicle applications. Wolfspeed (formerly Cree) is ramping up production at its Mohawk Valley Fab, the world’s largest 200mm SiC facility, targeting automotive and industrial power markets. Skyworks Solutions and Qorvo continue to drive innovation in GaN and GaAs for RF and 5G applications, with significant investments in US-based foundry capacity. The US government’s CHIPS and Science Act is expected to further bolster domestic compound semiconductor manufacturing through grants and incentives, shaping a more resilient supply chain.

Europe, while smaller in scale, is positioning itself as a key innovation hub, particularly for automotive and industrial power electronics. Infineon Technologies and STMicroelectronics are expanding their SiC and GaN wafer production in Germany and Italy, respectively, with new fabs coming online and capacity expansions planned through 2027. The European Union’s Chips Act is channeling funding into research, pilot lines, and eco-system development for compound semiconductors, aiming to double the region’s global market share by the end of the decade.

Looking ahead, the next few years will see intensified regional competition, strategic alliances, and government-backed initiatives driving capacity and innovation. Each region’s foundries are expected to focus on scaling advanced technologies—such as 200mm GaN and SiC wafers—while securing supply chains for critical industries, ensuring robust growth for compound semiconductors worldwide.

Strategic Partnerships, M&A, and Investment Activity

The compound semiconductor foundry sector is undergoing significant transformation in 2025, marked by heightened strategic partnerships, mergers and acquisitions (M&A), and substantial investment activity. This dynamic environment is being driven by surging demand for advanced semiconductors in applications such as electric vehicles, 5G infrastructure, and power electronics, where materials like gallium nitride (GaN), silicon carbide (SiC), and indium phosphide (InP) offer critical performance advantages.

One of the most prominent trends is the proliferation of joint ventures and technology alliances aimed at expanding manufacturing capacity and accelerating process innovation. For example, in early 2025, Wolfspeed, Inc. announced the expansion of its partnership with Infineon Technologies AG to co-develop next-generation SiC wafer technology and boost production for automotive and industrial power systems. This follows Wolfspeed’s ongoing investments in its Mohawk Valley Fab, which it touts as the world’s largest SiC device manufacturing facility.

M&A activity has also intensified as established players seek to secure critical technology and scale their foundry operations. In late 2024, onsemi completed its acquisition of a majority stake in a major SiC substrate producer, strengthening its vertically integrated supply chain and reinforcing its position as a global supplier of SiC power devices. Such moves are echoed by Coherent Corp. (formerly II-VI Incorporated), which continues to pursue acquisitions and partnerships to consolidate its leadership in compound semiconductor materials and device manufacturing.

Strategic investments are not limited to Western markets. In Asia, Sanan IC and MACMIC Science & Technology have significantly expanded their GaN and SiC foundry capacities through multibillion-yuan funding rounds and government-backed initiatives, aiming to meet exploding demand from both local and international customers. These investments are intended to bolster Asia’s position in the global compound semiconductor supply chain and reduce reliance on imported technologies.

Looking ahead, the period through 2027 is expected to see continued cross-border alliances, with foundries forging deeper collaborations with automotive OEMs, telecom equipment makers, and renewable energy firms to co-design and co-invest in tailored semiconductor solutions. The compound semiconductor foundry landscape will likely remain highly dynamic, with partnership-driven innovation and strategic capital deployment as key factors shaping industry leadership.

Challenges: IP, Talent Shortages, and Geopolitical Risks

Compound semiconductor foundries are facing a complex set of challenges as they scale up production to meet surging global demand for advanced technologies in communications, automotive, and power electronics. Three persistent and interrelated hurdles—intellectual property (IP) protection, talent shortages, and geopolitical risks—are shaping the outlook for 2025 and the coming years.

• Intellectual Property (IP) Protection: As compound semiconductors (notably GaN and SiC) become more central to high-frequency and power devices, safeguarding proprietary process technologies, device designs, and materials recipes has become increasingly critical. Foundries are investing heavily in internal security measures and partnerships to ensure IP is not compromised, particularly as they expand cross-border collaborations. For example, Wolfspeed and Cree (now part of Wolfspeed) have emphasized the importance of innovation protection in their public statements, with Wolfspeed outlining robust IP strategies in relation to their new US-based Mohawk Valley Fab.
• Talent Shortages: The industry faces acute shortages of engineers and specialists skilled in compound semiconductor materials and device fabrication. This shortage is particularly pronounced in regions scaling up new capacity. Companies such as IWATSU Electric and ams OSRAM have highlighted recruitment and training as critical bottlenecks in ramping up production. Addressing this, foundries are partnering with universities and technical institutes, launching training programs and seeking international talent to bridge gaps. The challenge is likely to intensify as new fabs come online in the US, Europe, and Asia.
• Geopolitical Risks: The compound semiconductor supply chain is highly globalized, making it vulnerable to trade tensions and export controls. The US, China, and EU are all investing heavily in domestic compound semiconductor capacity to secure supply and technological leadership. For instance, Coherent Corp. (formerly II-VI Incorporated) has expanded its US manufacturing footprint, citing resilience and supply chain security as key drivers. Meanwhile, companies are closely monitoring evolving export regulations, such as those imposed by the US Bureau of Industry and Security on certain compound semiconductor technologies.

Looking ahead, these challenges are expected to persist and even intensify through 2025 and beyond. Strategic investments in IP protection, workforce development, and supply chain localization will be essential for foundries to navigate this rapidly evolving landscape and capitalize on the growing demand for compound semiconductors.

Future Outlook: Next-Gen Materials and Market Trajectories

The compound semiconductor foundry sector is poised for significant transformation through 2025 and beyond, driven by surging demand for next-generation materials and expanding applications across automotive, telecommunications, and power electronics. Unlike traditional silicon, compound semiconductors—such as gallium nitride (GaN), silicon carbide (SiC), and indium phosphide (InP)—offer superior properties for high-frequency, high-power, and optoelectronic devices. Foundries specializing in these materials are rapidly scaling up capacity and leveraging new process technologies to meet the needs of emerging markets.

One of the most prominent developments is the widescale commercial deployment of GaN and SiC devices for electric vehicles (EVs), renewable energy infrastructure, and 5G wireless communications. Leading foundries such as Wolfspeed have announced aggressive capacity expansions, including the opening of the world’s largest SiC materials facility in New York, scheduled to ramp production through 2025. Similarly, OSRAM Opto Semiconductors continues to invest in InP and GaN technologies for both photonics and power applications, with a focus on automotive LiDAR and high-efficiency LEDs.

Asia-Pacific foundries, notably WIN Semiconductors Corp. and Sanan IC, are ramping up GaN-on-Si and GaAs process nodes to serve the rapidly growing demand for RF front-end modules in smartphones and 5G infrastructure. WIN Semiconductors, for example, is expanding its 6-inch GaAs and GaN lines, aiming to lower costs and improve device performance for mass-market applications. In China, Sanan IC is constructing additional 8-inch GaN-on-Si fabs to support domestic and international clients in power electronics and optoelectronics.

In Europe, X-FAB Silicon Foundries is targeting automotive, industrial, and medical markets with its SiC and GaN manufacturing platforms, forecasting strong growth as electrification trends accelerate. X-FAB has recently expanded its production capacity for SiC wafers, positioning itself to serve the anticipated surge in demand from EV and industrial power modules.

Looking ahead to the next few years, the compound semiconductor foundry market is expected to benefit from ongoing investment in wafer scaling, vertical integration, and new epitaxial processes. Strategic collaborations between foundries and end-device manufacturers are likely to intensify, facilitating faster commercialization of advanced materials. As the industry shifts towards larger wafer diameters (e.g., 8-inch for SiC and GaN), further cost reductions and performance gains are anticipated, reinforcing the sector’s pivotal role in the future electronics ecosystem.

Sources & References

• Wolfspeed
• Infineon Technologies AG
• IQE plc
• WIN Semiconductors Corp.
• Global Communication Semiconductors, LLC
• Sanan IC
• Mitsubishi Electric
• imec
• Semiconductor Industry Association
• Wolfspeed
• ROHM Semiconductor
• Northrop Grumman
• Wafer Works Corporation
• WIN Semiconductors
• Skyworks Solutions
• STMicroelectronics
• MACMIC Science & Technology
• ams OSRAM
• OSRAM Opto Semiconductors