At a dinner held throughout CES 2023 in January, I had the chance to speak to a senior Infineon govt sitting subsequent to me in regards to the firm’s broadly talked about acquisition ambitions for this 12 months expressed in a press release. The rationale was that whereas the semiconductor business goes by way of a downward cycle, it’s window of alternative to amass strategic property at worth.
A couple of days later, once I sat with GAN Programs CEO Jim Witham to get a way of what’s new and newest in gallium nitride (GaN) semiconductor know-how, what I discovered most placing was his comment about how shortly this market has emerged over the previous decade or so. “If you happen to return 5 years, individuals have been asking when GaN will occur, and now whereas GaN gadgets has established themselves available in the market, it’s slightly late to affix the GaN get together,” Witham mentioned. Now it’s actually about market penetration, he added.
At that second, I immediately started excited about giant energy semiconductor gamers and what they’ll do to handle this market actuality. One firm that got here to thoughts was Microchip, which acquired Microsemi in 2018 to pay money for silicon carbide (SiC) property. Excellent timing, certainly.
One other provider of extensive bandgap (WBG) semiconductors, UnitedSiC, was acquired by Qorvo in 2021. However what about different huge analog and energy semiconductor suppliers? What additionally got here to thoughts was Infineon’s failed try to amass Cree’s SiC enterprise, Wolfspeed, again in 2017. Cree later named itself on its most profitable model, Wolfspeed, and its SiC enterprise has quickly grown since then.
Determine 1 GaN semiconductors facilitate larger energy density, larger vitality effectivity, and smaller gadget kind issue. Supply: Infineon Technologies
Properly, Infineon Applied sciences has answered the decision by snapping GAN Programs for $830 million. Trade watchers imagine this might set off a consolidation wave across the rising WBG semiconductor business. In addition to Ottawa, Canada-based GAN Programs, different GaN semiconductor specialists embrace Cambridge GaN Units, Environment friendly Energy Conversion (EPC), Navitas Semiconductor, Transphorm, and Vanguard Worldwide Semiconductor.
Acquisition deserves
Whereas we’ve seen a number of SiC-centric acquisitions in recent times, Infineon’s deal marks the primary main GaN asset buy. And, given GaN’s essential significance in energy electronics, it’s very possible that it received’t be the final.
For Infineon, the primary energy semiconductors enterprise by way of market share, it’s additionally important that it fills the GaN lacking hyperlink in its energy semiconductors portfolio. Although not a prolific acquisition participant, Infineon has made two extremely profitable offers in recent times. First, in 2014, it purchased energy semiconductor pioneer Worldwide Rectifier to bolster its automotive choices. The acquisition additionally introduced Infineon some GaN know-how property as an add-on to this deal.
Subsequent, in 2019, Infineon acquired Cypress Semiconductor to additional increase its portfolio for the automotive markets. Each offers—Worldwide Rectifier and Cypress—have gone nicely for Infineon. So, given Infineon’s observe document and prevailing market situations, the GAN Programs buy appears to be like like a well timed name.
Determine 2 GaN semiconductors have been integrated into Canoo’s on-board charger (OBC) to transform AC energy from the wall receptacle into the DC energy that prices the EV battery. Supply: GAN Systems
In addition to strengthening Infineon’s GaN know-how roadmap, it offers the German chipmaker well timed entry to purposes equivalent to cellular charging, knowledge heart energy provides, residential photo voltaic inverters, and on-board chargers (OBCs) for electrical autos (EVs). As GAN Programs chief Witham factors out, the deal will even mix Infineon’s in-house manufacturing with GaN Programs’ foundry corridors. TSMC is GAN Programs’ manufacturing associate.
Right here, it’s essential to notice that in February 2022, Infineon introduced to double down on WBG manufacturing by investing greater than €2 billion in a brand new front-end fab in Kulim, Malaysia. The primary wafers will depart the fab within the second half of 2024, complementing Infineon’s current WBG manufacturing capacities in its fab at Villach, Austria.
Finish of one other chip startup story
It’s the top of the highway for the Canadian startup based in Ottawa in 2006. Girvan Patterson and John Roberts co-founded GaN Programs after seeing GaN as a possibility and progress venue within the energy business, particularly in knowledge facilities, industrial motors, and cellular chargers. Ottawa, the Canadian capital, had a analysis facility, Nationwide Analysis Council (NRC), which gave the upstart a small GaN fab to amass quick studying cycles. “That’s why we might develop working GaN transistors quick sufficient,” Witham advised EDN at CES 2023.
Determine 3 GaN Programs, based mostly in Ottawa, has greater than 200 staff.
GaN Programs has been successful story within the quickly rising WBG semiconductors enviornment. GaN semiconductors at the moment are being focused at a variety of energy purposes as a result of their smaller kind issue and energy-saving credentials enabled by larger energy density and vitality effectivity. In accordance with market analysis agency Yole, the GaN income for energy purposes is anticipated to develop by 56% CAGR to roughly $2 billion by 2027.
GaN Programs claims it’s the one GaN semiconductors firm with a manufacturing program for automotive. At CES 2023, it displayed an OBC from Canoo and a DC-DC converter from Vitesco for EVs. The adoption of GaN gadgets in EVs is at a tipping level, as Infineon CEO Jochen Hanebeck acknowledged within the press launch asserting this acquisition.
All this makes GaN Programs purchase an attention-grabbing acquisition deal.
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