EpiGaN acquisition: the expansion of Soitec into compound semiconductor market – YOLE’S INSIGHTS

An article written by Hong Lin, PhD. Senior Technology & Market Analyst at Yole Développement (Yole) – Soitec announced on 13th May that the company will acquire EpiGaN for €30M, plus an additional payment based on attainment of certain milestones.

We would like to share some of Yole’s insights into this acquisition.

Soitec is worldwide leader of SOI. The company has experienced difficult times in 2013-2016, but has succeeded in turning around the situation since 2017 and the company’s net income and gross margin have continued to grow since then thanks to its RF SOI. As a semiconductor material supplier, the company is trying to diversify its business with new SOI-related products such as Imager SOI and FD SOI.

Continuous improvement in gross margin (Source: Soitec)

The company is also developing new engineered substrates such as POI for filter applications, which seems promising, in Yole’s understanding (Source: Emerging Semiconductor Substrates: Technology & Market Trends report, Yole Développement, 2019).

With a healthy financial status, the company is looking to extend its business further in the compound semiconductor field, where it has developed different compound semiconductor engineered substrates in the past years.

The acquisition of EpiGaN will accelerate the company’s expansion in the compound semiconductor field.

Let us now look at EpiGaN. EpiGaN is a spin-off of IMEC, with long experience both in GaN on Si and GaN on SiC technology. The company has some key patents for GaN RF and power applications. The company recently announced an expansion of its production with new epi reactors.

As highlighted in the announcement, this acquisition will allow Soitec get access to two fast growing markets: GaN RF and GaN power.

GaN RF technology has already penetrated the fourth generation (4G) Long-Term Evolution (LTE) Wireless infrastructure market and is expected to grow in the upcoming 5G infrastructure market, as well as in military and numerous other markets (Source: RF GaN Market: Applications, Players, Technology and Substrates report, Yole Développement, 2019). While GaN on SiC is a well-established technology, GaN on Si technology could potentially open up a new market in the long term.  With this acquisition of EpiGaN, Soitec has got access to both technologies.

With regard to the GaN power market, the market remains small, in Yole’s understanding, but the potential is there (Source: Power GaN 2018: Epitaxy, Devices, Applications and Technology Trends report, Yole Développement, 2018).

GaN monolithic integration is a technology trend that Yole has observed in the past 3 years. Imec has recently demonstrated that GaN on SOI technology could allow better isolation for GaN monolithic integration. From feedback received, GaN on SOI technology seems to be of interest to some industrial players.

Let’s see how the joint forces of Soitec and EpiGaN will play in the GaN power market.

Hong Lin, PhD., Senior Technology & Market Analyst, Yole Développement

About the author:
Hong Lin, PhD works at Yole Développement (Yole), as a Senior Technology and Market Analyst, Compound Semiconductors within the Power & Wireless division since 2013. She is specialized in compound semiconductors and provides technical and economic analysis.