Gallium nitride (GaN) power pioneer Transphorm has raised $33m to ramp up production and secure its supply chain.
The company raised $23m through a private placement of 4.6m shares of common stock to KKR Phorm Investors and several U.S institutional investors, as well as granting the investors the right to purchase up to an additional 50 percent more shares of common stock with warrant coverage, on the same terms, within a certain time period.
This follows a $15m strategic deal with Sino-American Silicon Products (SAS) in Taiwan for the supply of wafers and the conversion of $15.6m of debt from strategic partner Yaskawa Electric from 2017 into shares to strengthen the balance sheet..
“The GaN power market is at a very exciting inflection point, and Transphorm is positioned to capitalize on the multi-billion-dollar market with its strong fundamentals, including its broad product portfolio with superior differentiated technology,” said Eiji Yatagawa, Partner at KKR’s overseas affiliate and a board member at Transphorm since 2015. “Transphorm today has one of the largest IP portfolios in GaN power and is one of the only GaN power manufacturers ramping up in both the lower power and higher power market segments. We believe the additional equity raise enhances Transphorm’s financial stability and positions the business for future growth.”
Competitor Navitas recently listed on the US stock market via a reverse takeover and GaN Systems and EPC are also ramping up production as the technology becomes mainstream in power supplies and chargers.
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Sino-America Silicon products is the parent company of GlobalWafers (GWC), one of the top three largest silicon wafer manufacturers. The strategic partnership will see GWC becoming Transphorm’s manufacturing partner and supplier, captive for Transphorm’s GaN epiwafers, a move that will augment Transphorm’s internal capacity. SAS will also become a distributor for select Transphorm epiwafer products as well as power products.
SAS also increased its investment in Transphorm from $5m in August to $15m at the same price as the KKR deal.
“We are excited to become shareholders of Transphorm as we begin our new GaN strategic partnership,” said Doris Hsu, Chairwoman and CEO, SAS/GWC. “Transphorm is a proven GaN power and epi products leader with vertically integrated manufacturing and one of the strongest GaN power IP portfolios in the world. Our strategic partnership will enable Transphorm to scale at a faster pace,” she said.
“The GaN power and RF markets represent a multi-billion-dollar opportunity with fast growing segments including fast chargers and adapters, server-storage-networking power, renewable energy and industrial power, electric vehicles as well as RF GaN electronic devices for 5G and variety of communication/infrastructure applications.”
“This partnership will allow for our rapid expansion in the GaN market, with a multi-year growth plan to scale GaN epi-wafer manufacturing for Transphorm, while protecting our intellectual property,” said Primit Parikh, Co-founder and President of Transphorm. “It will provide Transphorm’s customers, from compact high-speed fast charger to efficient higher power electric vehicles, the security of supply, multiple locations including our core US manufacturing, and rapid expansion capability.”
The company had revenue for the second quarter of 2022 of $11.3m up from $3.2 million in Q1 and with a profit of $6m for the first time.
“During the September quarter, we continued to ramp device shipments in support of expanded design-ins going into production, resulting in another consecutive quarter of growth and record product revenue,” said Parikh. “Product revenue in the first half of fiscal 2022 has exceeded the revenue contribution from products for the full fiscal year of 2021, driven by growing traction with our GaN devices in fast chargers and adaptors as well as high-power gaming, server and crypto-mining applications.
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