AES Semigas


30 June 2023

Transphorm’s full-year product revenue grows 21%

For its fiscal fourth-quarter 2023 (to end-March), Transphorm Inc of Goleta, near Santa Barbara, CA, USA — which designs and manufactures JEDEC- and AEC-Q101-qualified gallium nitride (GaN) field-effect transistors (FETs) for high-voltage power conversion — has reported revenue of $3.192m, down on $4.493m last quarter and $4.927m a year ago. However, this was impacted primarily by a government contract delay (the revenue from which will be recognized starting in fiscal first-quarter 2024). Product revenue was at the targeted $3.2m.

Full-year revenue has fallen from $24.05m in fiscal 2022 to $16.511m for fiscal 2023. However, this was due primarily to an $8m decrease in licensing revenue. Product revenue rose by 21% to $14.7m.

On a non-GAAP basis, operating expenses have risen further, from $4.71m a year ago and $6.02m last quarter to $7.55m. Full-year operating expenses rose from $18.3m in fiscal 2022 to $24.2m for fiscal 2023.

Net loss was $7.2m ($0.13 per share), up from $3.5m ($0.07 per share) a year ago but cut from $8.5m ($0.15 per share) last quarter. Nevertheless, full-year net loss has risen from $6.4m ($0.14 per share) in fiscal 2022 to $24.6m ($0.44 per share) for fiscal 2023.

Driven by the lower revenue due to the delay in securing the new government contract with National Security Technology Accelerator (NSTXL) plus increased days sales outstanding (DSO), quarterly cash burn has increased. Cash, cash equivalents and restricted cash have hence more than halved during the quarter, from $34m to $16m.

After the end of the quarter, in early April, Transphorm raised $9.3m through the exercise of existing warrants and a private placement of common stock. Also, in mid-June, it announced a rights offering for up to $15m of common stock, in which certain key stockholders have indicated their interest in participating.

Also in April, Transphorm fully repaid its $12m loan from Nexperia, and ended its exclusivity for Nexperia in the four-wheeler electric vehicle segment.

Business highlights during the quarter are listed as:

  • The strong five-year pipeline opportunity now stands at over $440m, up 7% from the previous update in February.
  • Increased design-ins and opportunities nearing or in production are currently expected to result in sequential product revenue growth resuming in fiscal second-quarter 2024.
  • A contract worth up to $15m was secured from NSTXL to manufacture GaN epiwafers under the ECLIPSE project.

High-power segment update

  • Total design-ins for higher power (300W–4kW) grew by 25% from the previous update (in February) to over 60 (with 30 in production).
  • Transphorm is the only GaN company with a proven ramp in the micro-inverter segment, with several hundred thousand devices in the field (800W, 1500W inverters) and a targeted ramp to over $1m annual revenue over the next 12 months with the largest customer. Other key design-ins are ongoing.
  • A low-cost driver solution for SuperGaN FETs was launched, strengthening Transphorm’s value proposition in segments such as LED lighting, charging, micro-inverters, uninterruptible power supplies (UPS) and gaming computers.
  • Transphorm launched the first 1200V FET simulation model and preliminary datasheet, a 1200V GaN-on-sapphire power semiconductor backing the firm’s ability to support future automotive power systems and compete with 1200V SiC devices.
  • The firm launched its third high-power GaN design tool using a digital signal controller from Microchip Technology, featuring a 3.0kW DC-to-AC non-isolated full-bridge inverter evaluation board.

Low-power segment update

  • Transphorm increased its total design-ins for power adapters and fast chargers (<300W) to over 90 (with over 25 in production), an increase of 10% from the previous update in February.
  • Fabless firm Weltrend Semiconductor Inc of Hsinchu Science Park, Taiwan — which specializes in the design, testing, application development and distribution of mixed-signal/digital ICs in power supplies, motor controls and image processing — released an integrated GaN system-in-package (SiP) for 65W fast-charging applications, in collaboration with Transphorm.
  • In a recent tear-down study of the 280W Razer gaming power supply, Transphorm’s drop-in SuperGaN out-performed different e-mode devices (including leading foundry-made GaN) with a device temperature reduction of 20–50%, higher efficiency, and expected reliability.
  • Six surface-mount devices were launched, available in industry-standard PQFN 5x6 and 8x8 packages (for both low- and high-power segments).

“We continue to see strong fundamental growth trends driven primarily by increased design wins for both the high-power and low-power market segments,” says president, CEO & co-founder Primit Parikh. “These trends point to the company resuming sequential product revenue growth beginning in the second quarter of fiscal 2024,” he adds.

“Our differentiated GaN semiconductors lead the industry in performance and reliability, carrying the only reported broad power spectrum reliability ratings for GaN power and over 175 billion hours in the field,” he claims. “Our increased design-ins, the end-customer momentum in ramping GaN, and the recent broad market excitement in GaN power is driving our desire to commence a strategic review of various opportunities to enhance shareholder value.”

“The past quarter and fiscal year have been extremely important toward positioning us strategically for future growth,” Parikh believes. “We expect our recently announced rights offering and the asset-based debt financing initiatives we are pursuing will significantly improve our cash position and put us in a strong position to pursue the increased opportunity funnel and allow us to focus on product innovation, operational capabilities and collaborative opportunities,” says chief financial officer Cameron McAulay.

During fiscal first-quarter 2024 (to end-June 2023), Transphorm was awarded the NSTXL contract, resulting in revenue being recognized commencing that quarter, and DSOs improved to historical levels. Consequently, for fiscal Q1/2024 Transphorm expects revenue of $5.8–6.2m, GAAP gross margin of 30–34%, and GAAP net loss per share of $0.10–0.13.

Transphorm forecasts it will have cash runway into the second half of September 2023, not including the rights offering, asset-based debt or any other financings. If the rights offering is fully subscribed and the firm completes the asset-based debt financing that it is pursuing, it would have cash runway well into fiscal 2025.

See related items:

Transphorm announces rights offering to raise $15m

Transphorm wins $15m contract from US National Security Technology Accelerator

Transphorm appoints co-founders Primit Parikh and Umesh Mishra as president & CEO and chair

Transphorm releases simulation model of first 1200V GaN-on-sapphire device

Transphorm releases 3kW inverter board with Microchip’s digital signal controller

Transphorm and Weltrend partner to release integrated GaN system-in-package

Transphorm’s product revenue grows 25% in December quarter

Transphorm’s quarterly growth dips, but product revenue still up 38% year-on-year

Transphorm’s quarterly revenue doubles year-on-year to record $4.93m

Tags: Transphorm GaN-on-Si GaN HEMT


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