In the Current Climate, Access to Cutting-Edge Technologies is Sure to Become More Difficult

Rising geopolitical tensions and defense demand are intensifying pressure on compound semiconductor supply chains powering next-generation RF systems.

The stock market’s volatility index, or VIX, has had an eventful 2026 so far, beginning with uncertainty over trade tariffs and most recently due to the conflict in the Middle East. Also known as Wall Street’s fear gauge, the VIX has been spiking around 30, which is a significant psychological threshold for investors. There have been sharper increases in the past, during the notorious financial crash of 2008 and, of course, in the pandemic. While those historical events sent investors dashing for traditional areas of cover, normally to buy bonds and sell stocks, the current situation is more complex, combining the threat of inflation and supply disruptions.

I have commented many times about high-tech manufacturing supply chains, particularly those for chip and board makers, including the supply of specialist materials like advanced resins and bondplys. In the semiconductor industry, there are strong arguments for performing wafer fabrication and back-end packaging close to where the materials and expertise are based, even though these are often in different locations. When building for consumer markets, where cost is as important as quality and performance, it has become the only way for manufacturers to remain competitive.

It’s also clear that consumer enthusiasm for the latest technologies, like smartphones, electric vehicles and AI-enabled services, is a main driver of progress across many areas of high-tech electronics. I have commented on this recently, too. With the huge demand for wireless products to support our mobile, adaptable lifestyles, we can consider the development of compound semiconductors to be another part of this trend.

Among these technologies, gallium arsenide (GaAs) and gallium nitride (GaN) are successfully commercialized in discrete RF transistors and monolithic microwave ICs (MMICs). Their high electron mobility lets these devices operate at higher frequencies and with greater efficiency than silicon alternatives. GaAs properties ensure extremely low noise, low power and high linearity, making devices ideal for front-end circuitry in mobile devices and satellite receivers. GaN, on the other hand, with its high breakdown-voltage capability, power density and thermal conductivity, has become a staple in high‑power RF amplifiers, radar, 5G base stations and satellite uplink equipment.

Driven by volume demand and ever-increasing user expectations, these formerly niche technologies have become mainstream and are powering global markets that ship multiple billions of units annually. As 5G services continue evolving, especially at frequencies above 6GHz, demand from the New Space sector, including communication satellites, markets for GaAs and GaN RF and microwave components are growing strongly year on year.

As we have seen before, commercial imperatives have driven producers to make necessary improvements in materials and processes, delivering components that are better performing, more cost-effective and more reliable. As recent events have put a spotlight on the needs of defense technologies, the contribution from the commercial world means equipment contractors can get access to RF and microwave components that are robust and reliable for use in portable communication sets carried by soldiers, as well as larger equipment like field base stations and airborne or naval radio and radar. Volume demand for these components is sure to rise as increased deployment in live battlefield scenarios leads to increased attrition, however. This will come partly from greater wear and damage that becomes inevitable as the systems are used more intensively, as well as from equipment losses due to combat. Overall, increased military demand for advanced RF and microwave technology will add extra pressure on supply chains. 

If the conflict were to broaden or escalate, manufacturers of commercial products will likely find that access to the components they need becomes more difficult, and this could damage the global economy.

While national security will command a higher priority than commercial interests, geopolitics could still intervene. Overall, in compound semiconductors, including GaN, GaAs, and silicon carbide (SiC), Japan is the global leader. Indeed, Japan is home to the largest number of semiconductor foundries of any type worldwide and is also the largest producer of GaAs substrates. While Taiwan has a relatively low presence in compound semiconductors, compared to its hugely successful silicon foundries, its importance is growing, and some influential suppliers are based there. Right now, the US is strongly positioned in GaN RF chips, especially for defense applications. Meanwhile, China is investing heavily in compound semiconductor technologies, particularly for power and photonics applications. Its high-end RF sector is currently weaker, partly due to export controls that limit access to the most advanced production technologies.

While the US may be able to satisfy defense-sector demand for high-performance RF semiconductor needs, as the Chips Act has driven recent inward investment, it is not yet fully self-reliant. Back-end packaging remains largely dependent on companies based in Asia.

As ongoing global tensions raise the prospect of prolonged military action in various locations worldwide, the armed forces’ demands for advanced technology must contend with the inherent lack of national control over today’s globalized supply chains. In the past, governments have been able to assert significant control over the ecosystems surrounding sensitive military technologies. This has eroded, however, as consumer-oriented technologies have come to dominate the pace of technological progress.

Over the past few decades, it has become increasingly untenable for individual nations to maintain both scientific and manufacturing preeminence in cutting-edge technologies. It may seem obvious that global commercial cooperation can contribute toward creating a more unified world, and in many ways it has. For now, we hope that the appetite for international accord will return soon.End of article content 

Alun Morgan is technology ambassador at Ventec International Group (venteclaminates.com); alun.morgan@ventec-europe.com. His column runs monthly.