Boston, MA - April 4, 2005 -The annual Strategy Analytics five year outlook for the Gallium Arsenide microelectronics industry, "GaAs Industry Forecast: 2004-2009," concludes that riding the crest of a cellular handset upgrade wave, the industry cycle peaked in 2004. However, this very dependency on the cellular handset market will act as a double-edged sword in 2005 reducing industry growth to a crawl.

While other application areas, including WLAN and auto RADAR applications, will provide new opportunities for the GaAs industry, volumes in these markets will not grow to levels that free the market from cellular handset market dependency through 2009.

"We see market growth slowing to a crawl in 2005. This will be true for the whole vertical chain from substrates through to GaAs devices (MMICs, discretes and digital ICs)," predicts Asif Anwar, Director of Strategy Analytics GaAs and Compound Semiconductor Technologies service. "Growth will start to accelerate again over 2006 and 2007, but the overall cycle is now spread over four years and the market will slow down again by 2009."

"The GaAs industry will grow out of the cellular handset "habit," but timing will depend on the speed at which other end applications develop," observes Stephen Entwistle, Vice President of the Strategic Technologies Practice at Strategy Analytics. "In the meantime, although the revenue generated specifically from cellular handset GaAs Power Amplifiers and switches will start to decline from 2007, GaAs technology will continue to be the key to unlocking additional growth streams for companies focused on supplying cellular handset RF front ends and complete radio solutions."