While supply-chain management software powerhouse Kinaxis was celebrating the grand opening of its fancy new Kanata South headquarters last Thursday night with a party for the ages, another growing tech firm was quietly settling into new digs of its own a few blocks away.
GaN Systems might not be in Kinaxis’s league just yet, but it’s getting there. GaN’s ultra-high-speed semiconductors made of a compound called gallium nitride rather than the traditional silicon are quickly becoming the go-to hardware to help power everything from electric cars to industrial motors.
So although GaN didn’t welcome employees to its new 33,000-square-foot head office on Palladium Drive last Thursday and Friday with a live performance from Blue Rodeo like its bigger and better-known neighbour just down the street, the Kanata firm is making plenty of noise where it counts – with customers.
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“I don’t think everybody knows that Ottawa has a company that’s so important in the power industry,” says chief executive Jim Witham, who lives in Silicon Valley but is currently in the National Capital Region to help his staffers get acquainted with their new office surroundings.
“For the new technology in power transistors, GaN Systems is the best company in the world, and we’re here in Ottawa.”
“For the new technology in power transistors, GaN Systems is the best company in the world, and we’re here in Ottawa.”
GaN now sells its semiconductors to more than 2,000 clients, and its products have caught the attention of household names in automaking and electronics manufacturing, including BMW – which has a sizable investment in the Kanata firm through its i Ventures arm – Siemens, Samsung and Dell. The firm has raised $230 million in venture capital over the past four years to fuel its expansion, with $190 million of that total coming courtesy of Boston-based financial services giant Fidelity Investments last November.
“They’re a great partner for us to grow the company with,” says Witham, adding a hefty chunk of the new funding will be poured into boosting the firm’s R&D and sales teams as GaN pushes into new markets and continues to refine its high-tech transistors.
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, Toyota and nascent Arkansas-based electric carmaker Canoo as they ramp up production of EVs 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.
Rapid revenue growth
“You don’t waste as much power,” sums up Witham when asked to compare GaN’s hardware with old-school semiconductors. “You save material, you save energy, you save money.”
It’s a recipe for success that’s been paying off since the company entered the market in 2015.
Now at more than 150 employees, GaN doubled its headcount last year and is on pace to duplicate that feat again in 2022. In Deloitte’s 2021 list of the 500 fastest-growing technology companies in North America, GaN led all semiconductor manufacturers with three-year revenue growth of 485 per cent.
Noting that power transistors are the “fundamental building block” of everything from smartphone chargers to automobile sound systems, Witham says the global transistor market is projected to be worth $17 billion by 2025. He sees no reason why GaN can’t take a significant chunk of that business.
“It cuts across all marketplaces,” Witham says of GaN’s sales potential. “Having the best transistor in a $17-billion market, there’s a lot of room for growth.”
Indeed, market tailwinds are propelling GaN into rarified air that now sees the company occupying the same office complex as Calian, which ranks just ahead of Kinaxis as Ottawa’s second-largest publicly traded company behind only Shopify.
Even so, Witham also sees some of GaN’s much larger rivals in the semiconductor space, including Intel and Qualcomm, quickly approaching in his rear-view mirror as they acquire competitors and rev up their own R&D efforts.
But if the veteran tech leader is worried, he’s not showing it.
“All the big semiconductor companies in the world are figuring out what their GaN strategy is and how they can compete in this marketplace,” he says. “So we have to roll up our sleeves and be able to fight above our weight with some of the biggest semiconductor companies around the world. We’ve done a pretty good job of it so far.”
