A Kanata firm whose high-speed semiconductors help electric cars and consumer electronics run more efficiently is gearing up to expand into new markets after raising $US150 million in fresh capital.
GaN Systems announced the new round led by Fidelity Investments last week. Other contributors include Vitesco Technologies, a European manufacturer of power-train equipment, and existing investor BMW i Ventures, which led GaN Systems’ previous round valued at more than $40 million in 2018.
The local company says it plans to use the funding to accelerate the development and marketing of its high-speed semiconductors, which are made of gallium nitride rather than traditional silicon.
GaN Systems CEO Jim Witham called the deal a “game-changer” that will help the firm satisfy soaring demand for its products among automakers and electronics manufacturers seeking smaller and more energy-efficient power sources.
“Gallium nitride takes the baton from legacy silicon to enable smaller platforms to run cooler and use fewer materials,” he said in a statement.
Gallium nitride – or GaN, as it’s commonly known – is a byproduct of aluminum and zinc production known for its high heat capacity and conductivity. Not only are GaN transistors faster than their silicon-based cousins, they are also lighter and shed less energy in the form of heat during the power conversion process.
That’s a winning combination for auto manufacturers like BMW as they shift more production to electric vehicles and develop self-driving cars with sensors that constantly transmit and receive data from the cloud – a process that requires a great deal of energy.
Growing customer base
In addition to anteing up more cash in the latest funding round, the German car manufacturer recently signed a new agreement that will see GaN Systems provide more transistors for BMW’s electric vehicles.
The Kanata company has also captured the attention of customers that cater to the automotive industry such as Vitesco, which said last week it’s partnering with GaN Systems to develop new applications that will make electric cars more efficient.
In an interview with Fierce Electronics earlier this year, Witham said the global GaN market is expected to grow from its current $8 billion in annual revenues to $18 billion in 2025, with most of that increase being driven by EV manufacturers.
At the same time, GaN Systems' growing customer base, which includes Dell, Samsung and Siemens, extends well beyond the automotive sector.
Its technology allows electronics manufacturers to produce everything from lighter, thinner flat-screen TVs and tablets to more environmentally friendly air conditioners, while its transistors make it more efficient for data centre providers to store and transmit massive amounts of information in the cloud. The company contracts out production to a Taiwanese manufacturer and says it makes more GaN chips than any other firm.
GaN Systems enjoys the added benefit of being a market leader in a field with few competitors.
It's one of just a handful of companies in the world that manufacture gallium nitride semiconductors, largely because GaN can only be produced in a specially equipped foundry. As it happens, one of those facilities is located right here in Ottawa at the National Research Council.
“In some respects, when we go out to big customers around the world, they’re surprised that the best power transistors in the world come from a company headquartered in Ottawa,” Witham told Techopia in 2018.
“But the combination of the entrepreneurship in Ottawa, the engineering talent in Ottawa and, for us specifically, having a GaN reactor at the NRC in the early days where we could prove out our technology and show that it was superior to the other ways of doing it, those three pillars allowed us to become the company that’s the leader in GaN.”