Boston, MA - March 20, 2007 - The Strategy Analytics GaAs and Compound Semiconductor Technologies (GaAs) service, releasing its regular analysis of compound semiconductor industry news, covering microelectronics, optoelectronics and materials/equipment markets, shows an industry moving into profitability.

A snapshot of the companies covered still shows mixed fortunes for individual companies and manufacturers, but generally speaking, the compound semiconductor industry demonstrated positive results. Profit margins approached 35 percent for GaAs device manufacturers active in the microelectronics sector. Profit margins for some substrate manufacturers and equipment manufacturers also exceeded 25 percent for the last quarter of 2006.

"With the exception of JDSU, companies involved in the telecoms sector, were still struggling with profitability, but the market is picking up, so performances should improve in 2007," noted Asif Anwar, GaAs Service Director. "Equipment manufacturers continue to find strong demand from the LED sector, which in its own right was still showing positive margins despite lower revenues."

Stephen Entwistle, Vice President of the Strategic Technologies Practice, added, "2006 was a good year for the industry with strong demand helping to drive revenues. At the same time, companies adopted focused strategies that included divesting operations that did not tie in with their core business helping them to move towards profitability."

The Compound Semiconductor Industry Review Q4 2006 report, Compound Semiconductor Industry January-February 2007 Review: Optoelectronics and Materials, covering optoelectronics and materials/equipment markets, as well as Compound Semiconductor Industry January-February 2007 Review: Microelectronics are available now at www.strategyanalytics.com.