Infineon buys GaN Systems: How will this bold acquisition pay off?

Infineon Technologies’ acquisition of GaN Systems is highly significant for the power electronics industry: it is by far the largest sale to date within the power GaN sector, and the $830 million purchase price – around 18% of Infineon Technologies’ power electronics’ revenue – comes 4 times higher than the value of the entire power GaN market as of 2022.

The leading company in power electronics investing so heavily in a relatively young company with relatively small annual revenues (around $20 million in 2022, according to Yole Intelligence’s estimation) is a momentous move, signifying Infineon Technologies’ desire to capitalize on GaN’s growth potential and cement its leadership in power electronics.

By 2028, technology & market analysts, Taha Ayari,Ezgi Dogmus and Ana Villamor, Analysts at Yole Intelligence, part of Yole Group expect the GaN revenue for power applications to more than multiplied by 10, growing to $2 billion at a 53% CAGR22-28 (Source: Power SiC/GaN Compound Semiconductor Market Monitor – Q1, 2023 edition).

In this article, Taha, Ezgi and Ana discuss the reasons behind this unique acquisition, and what it means for Infineon Technologies’ GaN roadmap going forwards.

This analysis is part of the quarterly Power SiC/GaN Compound Semiconductor Market Monitor (Q1, 2023 edition). The Yole Group’s Power SiC/GaN Compound Semiconductor Market Monitor is a continuous pulse of the compound semiconductor industry & power electronics applications with its competitive landscape, key players’ strategic decisions, and resulting trends. More details will be also available in the report, Status of the Power Electronics Industry, 2023 edition (See HERE the 2022 edition).

For the last few years, Infineon Technologies has been making strategic moves to remain the leader in power semiconductors (read about its recent acquisitions and capacity expansions here). It has gained much expertise in both GaN and SiC materials and is expanding its manufacturing facilities to match. So, some may question why Infineon Technologies would need to make such an expensive acquisition when it is already making gains in this area.

While GaN is one of several technologies Infineon Technologies is bidding on, GaN Systems has spent 15 years solely focused on the technology. The company’s expertise in high-power applications and packaging in particular will help Infineon Technologies accelerate its GaN strategy.

GaN Systems is one of only two companies (the other being Transphorm) currently selling into high-power applications, with most other GaN players focused on the low-power consumer markets. In the automotive market, GaN Systems has relationships with Toyota, BMW and Vitesco for developing onboard chargers, traction inverters and DC/DC converters. It also partners with ams Osram for automotive Lidar applications. In 2021 it partnered with Chinese USI to co-develop a GaN power module. Gaining automotive-qualified components is a big advantage for Infineon Technologies, which has not yet achieved this, saving them a long and costly process.

Infineon Technologies is likely to increase its activity in high power data center applications, and the acquisition could provide a strategic advantage. GaN Systems’ transistors have been used to increase performance in power supply products for servers and racks from 800 Watts to 6kW. One of GaN Systems’ customers in this space is SoluM, a major supplier to Intel. Their 2700W power supply product at 240Vac with 12V output meets 80 plus titanium efficiency standards in a smaller form factor than non-GaN based products.

GaN Systems’ position in high-power applications relies largely on their expertise in advanced packaging through its proprietary GaNpx products. This technology stands out because GaN Systems is the only company pushing embedded die packages for power applications. Thanks to the absence of wire bonds, embedded die has extremely low inductance, which is beneficial for the fast-switching speeds of GaN switches. In addition, embedded die packages allow for larger die sizes, which increases current, an important feature for accessing high-power applications. Lastly, this type of packaging enables superior heat management through the use of copper plating that spreads and dissipates heat, which allows for top- and bottom-side cooling (or both).

But Infineon Technologies is gaining more than just technology. Since its founding in 2008, GaN Systems has developed a workforce of around 200 employees with essential skills in design, process and R&D by partnering with TMSC for device production. With GaN still an emerging technology, these skills will no doubt be crucial in advancing its performance and efficiency. Amid the skills shortage where it is becoming harder and harder to find talent, this provides considerable added value.

Despite all of GaN Systems’ strengths, Infineon Technologies investing so heavily in a young company is a bold move that signifies the potential it sees in the GaN industry. Infineon currently holds around 20-25% of the power electronics market, and if it could gain a similar share of the $2 billion the power GaN sector could be worth by 2028 the company could see huge impacts on revenues. 

Tesla and STMicroelectronics’ early partnership in SiC resulted in them taking the lion’s share of the market, with many SiC companies feeling like they ‘missed the boat’ in the automotive sector. Could this acquisition point to Infineon Technologies wanting to take an early lead with GaN in industrial markets?

The merger will no doubt put pressure on other GaN players, who are now not just competing with GaN Systems, but the leading power electronics company in the market.

Transphorm, for example, is another young company competing in this space. It is currently concentrating on expanding production capacity in Japan and the US. EPC, a major provider of low voltage GaN devices, is keep expanding its products portfolio and increasing its production capacity by setting new agreements with foundries like VIS.  Not forgetting China’s Innoscience who invested more thanUS$1 billion to strengthen its position as a worldwide GaN IDM (Integrated Device Manufacturer).

Other players, such as STMicroelectronics and power GaN’s 1^st unicorn company Navitas  are continuing to develop their GaN portfolios alongside SiC, with mergers and acquisitions and expansions helping them grow their capacity and expertise. Both players currently rely on TSMC’s GaN manufacturing. onsemi has, however, put the brakes on its GaN roadmap: last year it completed the sale of its 6-inch fab in Belgium including a team of GaN experts (now BelGaN).

Infineon Technologies’ costly acquisition is set to accelerate its GaN roadmap, and it will be interesting to see the company’s next moves. The company has been switching its existing Si lines to 6 and 8” SiC and GaN. What will be the strategy of Infineon in different markets when it comes to internal production or working together with GaN systems fab partner TSMC? What will be the synergy between company’s low voltage GaN product portfolio for both power and RF industries? Follow for more analysis on the most important developments in the GaN industry, which will likely be plentiful!

Taha Ayari, Ph.D., is a Technology & Market Analyst, Compound Semiconductor and Emerging Substrates, at Yole Intelligence, part of Yole Group. As a member of the Power Electronics & Wireless division at Yole, Taha’s expertise is mainly dedicated to power, RF, and optoelectronics. He is fully engaged in the development of technology and market reports as well as custom projects.

Taha has 2 years’ experience as a Technology & Cost Analyst at Yole System Plus , part of Yole Group, where he focuses on the development of compound semiconductor reverse engineering & costing analyses.

Prior to Yole, Taha was a research engineer at Georgia Tech Lorraine (Metz, France). He published numerous papers with a particular focus on III-N materials.

Taha holds an M.Sc. and a Ph.D. in Electrical and Computer Engineering from the Georgia Institute of Technology (Atlanta, USA).

Ezgi Dogmus, PhD. is Team Lead Analyst in Compound Semiconductor & Emerging Substrates activity within the Power & Wireless Division at Yole Intelligence, part of Yole Group. With an international team of technology & market analysts, she is managing the expansion of the technical expertise and the market know-how of the company. In addition, Ezgi actively assists and supports the development of dedicated collection of market & technology reports, monitor as well as custom consulting projects.

Prior to Yole, Ezgi worked as a process development engineer for GaN-based RF and power solutions at IEMN (Lille, France).

After graduating from University of Augsburg (Germany) and Grenoble Institute of Technology (France), Ezgi received her PhD. in Microelectronics at IEMN (France).

Ana Villamor, Ph.D., is a Team Lead Analyst for power electronics activities within the Power and Wireless division at Yole Intelligence, part of Yole Group.

Ana manages an international team and develops the technical expertise and market know-how of the team.

In addition, she actively supports and assists in developing a dedicated collection of market & technology reports and custom consulting projects.

Prior to Yole, Ana was involved in a high added-value collaboration within the CNM research center and onsemi, a leading power electronics company. During that partnership and two years as a Silicon Development Engineer, Dr. Villamor has acquired extensive technical expertise and in-depth knowledge of the power electronics industry.

Ana has authored and co-authored several papers, as well as a patent.

Ana holds a Ph.D. in electronics and an Electronics Engineering degree and a master’s degree in Micro and Nano Electronics from the Universitat Autonoma de Barcelona (Spain).


Source: www.yolegroup.com