The 2004 GaAs device market grew by 12 percent over 2003, boosted by the cellular handset market, which saw record shipments, with year-on-year growth of 25 percent. With the "upgrade cycle" in this strategic market coming to an end, overall handset volume growth is forecast to be only 8-10 percent in 2005. Growth in other markets will not be enough to offset the subsequent slowdown, and GaAs device and materials suppliers should be prepared for lower demand across the board. Multiple capabilities that can address several end-markets will be key to future success and companies with a singular focus on the cellular market will be exposed to future market share erosion.
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