Density gradient quantum model has been used to analyse the breakdown characteristic of InP-based composite channel HEMT(high electron mobility transistor). The collision ionization in composite channel and quantum effect has been taken into consideration. We payed great attention to the relationship of on-state breakdown voltage with respect to the thickness of In0.7Ga0.3As channel, and promoted a method to enhance the on-state breakdown voltage. A commercial 2D-device simulation program. Sentaurus has been used to simulate the on-state breakdown voltage of the device. A comparison has been made between the result of simulated and measured data. The result shows that with the reduction of the thickness of In0.7Ga0.3As channel, on-state breakdown voltage of the device will be enhanced greatly without reducing saturation current, which has a significant meaning for promoting the power performance of InP-based HEMT.