At a dinner held throughout CES 2023 in January, I had the chance to speak to a senior Infineon govt sitting subsequent to me concerning the firm’s extensively talked about acquisition ambitions for this 12 months expressed in an announcement. The rationale was that whereas the semiconductor trade goes by way of a downward cycle, it’s window of alternative to accumulate strategic belongings at value.
A couple of days later, once I sat with GAN Techniques CEO Jim Witham to get a way of what’s new and newest in gallium nitride (GaN) semiconductor expertise, what I discovered most hanging was his comment about how shortly this market has emerged over the previous decade or so. “When you return 5 years, individuals had been asking when GaN will occur, and now whereas GaN units has established themselves available in the market, it’s a bit of late to affix the GaN social gathering,” Witham stated. Now it’s actually about market penetration, he added.
At that second, I immediately started serious 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) belongings. Superb timing, certainly.
One other provider of broad bandgap (WBG) semiconductors, UnitedSiC, was acquired by Qorvo in 2021. However what about different massive analog and energy semiconductor suppliers? What additionally got here to thoughts was Infineon’s failed try to accumulate 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 greater energy density, greater vitality effectivity, and smaller gadget kind issue. Supply: Infineon Technologies
Nicely, Infineon Applied sciences has answered the decision by snapping GAN Techniques for $830 million. Business watchers imagine this might set off a consolidation wave across the rising WBG semiconductor trade. Apart from Ottawa, Canada-based GAN Techniques, different GaN semiconductor specialists embody Cambridge GaN Gadgets, Environment friendly Energy Conversion (EPC), Navitas Semiconductor, Transphorm, and Vanguard Worldwide Semiconductor.
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 when it comes to market share, it’s additionally essential 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 expertise belongings 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 effectively for Infineon. So, given Infineon’s observe file and prevailing market situations, the GAN Techniques buy appears to be like like a well timed name.
Determine 2 GaN semiconductors have been included into Canoo’s on-board charger (OBC) to transform AC energy from the wall receptacle into the DC energy that fees the EV battery. Supply: GAN Systems
Apart from strengthening Infineon’s GaN expertise roadmap, it offers the German chipmaker well timed entry to purposes reminiscent of cellular charging, information heart energy provides, residential photo voltaic inverters, and on-board chargers (OBCs) for electrical autos (EVs). As GAN Techniques chief Witham factors out, the deal will even mix Infineon’s in-house manufacturing with GaN Techniques’ foundry corridors. TSMC is GAN Techniques’ manufacturing accomplice.
Right here, it’s necessary 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 present 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 Techniques after seeing GaN as a possibility and development venue within the energy trade, particularly in information 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 accumulate quick studying cycles. “That’s why we might develop working GaN transistors quick sufficient,” Witham advised EDN at CES 2023.
Determine 3 GaN Techniques, primarily based in Ottawa, has greater than 200 workers.
GaN Techniques has been a hit story within the quickly rising WBG semiconductors area. GaN semiconductors are actually being focused at a variety of energy purposes as a result of their smaller kind issue and energy-saving credentials enabled by greater energy density and vitality effectivity. In response to market analysis agency Yole, the GaN income for energy purposes is anticipated to develop by 56% CAGR to roughly $2 billion by 2027.
GaN Techniques 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 units in EVs is at a tipping level, as Infineon CEO Jochen Hanebeck acknowledged within the press launch asserting this acquisition.
All this makes GaN Techniques purchase an fascinating acquisition deal.
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