Disclosed is a method for processing GaN based substrate material for manufacturing light-emitting diodes, lasers, and other types of devices. In various embodiments, a GaN substrate is exposed to nitrogen and hydrogen at a high temperature. This process causes the surface of the GaN substrate to anneal and become smooth. Then other processes, such as growing epitaxial layers over the surface of GaN substrate, can be performed over the smooth surface of the GaN substrate.