Boston, MA - December 18, 2006 - The newly released Strategy Analytics GaAs and Compound Semiconductor Technologies (GaAs) service report, "Defense Spending Increases Provide Robust Market for Compound Semiconductors," projects that the market for GaAs devices will see continued growth at a CAAGR of 8% through to 2010.

GaAs remains a staple ingredient in military and defense systems covering RADAR, communications, electronic warfare and smart munitions. The value of defense contracts awarded in 2006 for these applications will exceed $16 billion, with projects extending through 2015. Emerging compound semiconductor technologies, such as GaN, will also start to influence the design of future defense systems, providing wider bandwidth, higher power and higher frequency capabilities.

"We believe GaAs device demand from the defense sector will increase year-on-year by 9% in 2006 and continue to grow through to 2010," observes Asif Anwar, GaAs service Director. "However, we believe that the growing power and frequency requirements of defense systems will favor GaN over GaAs as the optimum technology, and therefore predict that GaN will begin to be the underlying technology for military defense systems from 2010 onwards."

"The upside for GaAs device manufacturers also working on GaN is that the high power, high frequency capabilities of GaN should allow them to compete in areas that have traditionally been dominated by vacuum tube technology," notes Stephen Entwistle, VP of the Strategy Analytics Strategic Technologies Practice. "GaN will therefore provide an additional revenue stream, rather than simply offering a means for replacing lost revenues due to GaAs displacement."