16 August 2022
Navitas acquires GeneSiC, accelerating entry into EV, solar and energy storage markets by 2-3 years
For second-quarter 2022, gallium nitride (GaN) power IC firm Navitas Semiconductor of El Segundo, CA, USA and Dublin, Ireland has reported net revenue of $8.6m, up on $6.74m last quarter and 58% on $5.45m a year ago.
However, gross margin (on a non-GAAP basis) has fallen further, from 46% a year ago and 44% last quarter to 41.6%. Operating expenses were $12.5m, level with last quarter but up from $8.3m a year ago. Net loss was $9.1m ($0.07 per share), up from $5.8m ($0.28 per share) a year ago but nevertheless cut from $9.6m ($0.08 per share) last quarter.
“While we see significant softness in the China smartphone market, our leadership in the GaN mobile charger market has never been stronger,” says CEO & co-founder Gene Sheridan.
“In the second quarter, we added over 20 new customer launches, set new industry benchmarks in ultra-fast charging, and achieved significant progress in our expansion markets of data center, solar and EV,” he adds.
New GaN smartphone chargers include Motorola edge+ (in-box 68W), vivo X-Fold (in-box 80W), OnePlus Ace/10R and 10T 5G (in-box 150W), plus the vivo iQOO 10 and 10 Pro smartphones with 120W and record-setting 200W in-box chargers (achieving what is claimed to be a new industry-benchmark, with 0-100% charging in less than 10 minutes). Aftermarket GaN chargers include Anker’s GaNPrime series (120-150W), and Belkin’s 108W 4-port GaN charger (now available in the Apple Store). New laptop GaN chargers include Xiaomi Redmi (in-box 100W), Lenovo Legion (135W) and Dell XPS 13 Pro (in-box 60W).
Key platform and customer developments in the firm’s expansion into higher-power markets include:
- four new Titanium Plus efficiency-grade data-center platforms in development supporting eight major customer projects;
- two industry-leading residential solar customers in development that are committed to a broad transitions from silicon to GaN;
- three new electric vehicle OBC/DC-DC platforms in development supporting five major customer programs.
Also, Navitas has acquired silicon carbide (SiC) power semiconductor device designer and manufacturer GeneSiC Semiconductor Inc of Dulles, VA, USA for about $100m in cash, 24.9 million shares of Navitas stock and possible earn-out payments of up to $25m (conditional on the achievement of substantial revenue targets for the GeneSiC business over the four fiscal quarters to end-September 2023). The acquisition is expected to be immediately accretive to Navitas’ earnings per share.
GeneSiC is highly profitable, with EBITDA margins of more than 25%, expected full-year 2022 revenue of about $25m, and demonstrated annual growth rates of over 60%.
Founded in 2014, Navitas introduced what it claimed to be the first commercial GaN power integrated circuits. Its proprietary GaNFast power ICs integrate GaN power and drive with sensing, control and protection circuits to enable faster charging, higher power density and greater energy savings for mobile, consumer, enterprise, eMobility and new energy markets. Complementary GeneSiC power devices are optimized high-power, high-voltage and high-reliability silicon carbide solutions. Targeted markets include mobile, consumer, data center, EV, solar, wind, smart grid, and industrial.
The combined company creates what is said to be a comprehensive technology portfolio in ‘next-generation’ power semiconductors – both GaN and SiC – with an aggregate market opportunity forecasted to exceed$20bn per year by 2026.
“With the acquisition of GeneSiC, Navitas has become the industry’s only pure-play, next-generation power semiconductor company,” reckons Sheridan. “GeneSiC is an ideal SiC partner for Navitas with its industry-leading performance, world-class robustness, and the broadest product portfolio in SiC, from 650V to 6500V,” he comments. “They have focused on core SiC technology, while Navitas has invested significantly in global sales, operations and technical support teams, along with system design centers in EV and data centers – all of which can be immediately leveraged to accelerate GeneSiC’s already fast-growing business. With GeneSiC’s 500 diverse and synergistic customers, we now have immediate revenue in solar, EV, energy storage and many other diversified industrial markets.”
Navitas’ recent acquisition of VDD Tech of Mont-Saint-Guibert, Belgium and its digital-isolator technology is reckoned to be a great combination for both GaN and SiC higher-power applications, adding up to $4 of system content and opening up an additional $1bn annual market opportunity for Navitas.
Navitas expects that the GeneSiC acquisition will accelerate its expansion into higher-power markets by 2-3 years, with immediate Q3 revenue in synergistic solar, energy storage and EV markets, among other industrial markets.
Including a partial quarter of GeneSiC revenue, net revenues for third-quarter 2022 are expected to be $9-11m, reflecting short-term softness in the China smartphone market. Gross margin should be 40% (plus or minus 2%). Operating expenses (including a partial quarter of expenses for GeneSiC) are expected to be about $14m (plus or minus 3%).