In view of the specific properties of InP-based composite channel High Electron Mobility Transistor(HEMT),we made a correction to the traditional single channel HEMT and promote a new small signal physical model which can be applied to composite channel HEMT.The commercial device simulation program-ISE(Integrated Systems Engineering) has been used to simulate and verify this new model. We have compared the measured and simulated Hemt's I-V and transference characteristics, The change of electric field and electric current density in InGaAs/InP composite channel when quantum effect is taken into consideration are studied, The results show that due to quantum effect in InGaAs channel,in the area under the gate and near the source where electric field is low, current flow is distributed mostly in the InGaAs channel,while in the area under the gate and near the drain where electric field is high ,current flow is distributed mostly in the InP channel.Under different gate voltages ,the current flow shows different proportions in both InGaAs and InP channel. The new model is proved to be valid.