The acquisition of GaN Systems by Infineon Technologies carries significant implications for the power electronics industry. This is currently the largest deal in the GaN power industry, with a purchase price of $830 million – roughly 18% of Infineon Technologies’ power electronics product revenue – exceeding the entire value of the power GaN market in 2022 by four times.
For a leading company in the power electronics industry to make such a significant investment in a relatively young company with a relatively small annual revenue (estimated at around $20 million in 2022 according to Yole Intelligence), it signifies Infineon Technologies’ desire to capitalize on the growth potential of GaN and solidify their position as a leader in the power electronics field.
According to Yole’s estimation, by 2028, revenue from GaN in power applications will grow by over 10 times, with a compound annual growth rate of 53%. At that time, the entire GaN market is expected to expand to $2 billion.
In this article, Yole discusses the reasons behind this unique acquisition and its significance for Infineon Technologies’ future GaN roadmap.
Penetrating the high-power market by GaN Systems
In recent years, Infineon Technologies has taken strategic initiatives to maintain its leading position in the power semiconductor field.
For example, they acquired International Rectifier in 2015, which included Power GaN business, and Siltectra in 2018 for SiC wafer technology. They also acquired Cypress Semiconductor to enhance their portfolio of advanced technology solutions.
In 2021, Infineon completed the construction of its Villach 12-inch manufacturing facility and is preparing for production. Since 2022, the company has also been transforming its Villach plant to produce 8-inch SiC and GaN chips and investing over $2 billion to expand its SiC and GaN material factory in Malaysia. Additionally, they announced investments in a new module manufacturing and packaging plant in Cegléd, as well as expanding their backend facility in Malacca.
Through these investments, Infineon Technologies has accumulated a wealth of expertise in GaN and SiC materials and is expanding its manufacturing facilities to match. Some may question why such expensive acquisitions are necessary when Infineon Technologies has already made progress in this field.
Although GaN is one of the technologies Infineon Technologies bids on, GaN Systems has spent 15 years focusing on this technology. The company’s expertise in high-power applications and packaging is particularly helpful in accelerating Infineon Technologies’ GaN strategy.
GaN Systems is one of only two companies currently selling products for high-power applications (the other being Transphorm), while most other GaN manufacturers focus on the low-power consumer market. In the automotive market, GaN Systems has partnered with Toyota, BMW, and Vitesco to develop on-board chargers, traction inverters, and DC/DC converters. It has also partnered with ams Osram to develop automotive LiDAR applications. In 2021, they collaborated with Hangzhou Hongshi Electronic Co. to jointly develop GaN power modules.
Obtaining automotive-grade components is a significant advantage for Infineon Technologies that they have not yet achieved, saving them a lengthy and expensive process.
Infineon Technologies may increase its activities in the high-power data center application field, and this acquisition could bring strategic advantages. GaN Systems’ transistors have been used to increase the performance of server and rack power products from 800 watts to 6 kilowatts. One of GaN Systems’ clients in this field is SoluM, Intel’s major supplier. Their 2700W power products meet the 80 plus titanium efficiency standard under 240Vac and 12V output, and their size is smaller than non-GaN-based products.
GaN Systems’ position in high-power applications largely depends on their expertise in advanced packaging with their proprietary GaNpx product. This technology stands out because GaN Systems is the only company to offer embedded chip packaging for power applications. Without wire bonding, embedded chip packaging has extremely low inductance, which benefits the fast switching speed of GaN switches. Additionally, embedded die packaging allows for larger die sizes, which increases current, an important feature for accessing high-power applications. Finally, this type of packaging achieves excellent thermal management by using copper plating that is both diffusive and dissipative, enabling top and bottom cooling (or both).
But Infineon Technologies gains more than just technology. Since its establishment in 2008, GaN Systems has trained about 200 employees in design, process, and R&D skills through device production in partnership with TSMC. As GaN is still an emerging technology, these skills are undoubtedly critical to improving its performance and efficiency. In a skills shortage, it is increasingly difficult to find talent, which provides significant additional value.
