Renesas Acquires Transphorm for $339 Million to Accelerate Gallium Nitride Market Expansion

Japanese semiconductor major Renesas Electronics has announced that it has reached an agreement with gallium nitride power semiconductor supplier Transphorm to make an acquisition in a deal that values Transphorm at approximately $339 million and is expected to close in the second half of 2024.

According to the disclosure, Transphorm's board of directors has unanimously approved the definitive agreement and recommended that Transphorm's shareholders approve the definitive transaction and ratify the merger. In conjunction with the signing of the definitive agreement, KKR Phorm Investors L.P., which owns approximately 38.6 per cent of Transphorm's outstanding common stock, has entered into a customary voting agreement with Renesas in support of the transaction.

The transaction is expected to close in the second half of 2024, subject to Transphorm shareholder approval, regulatory clearance and the satisfaction of other customary closing conditions.

The demand for efficient power systems, the cornerstone of carbon neutrality, is increasing. In response to this trend, industries are transitioning to wide-bandwidth-gain (WBG) materials represented by silicon carbide (SiC) and GaN. These advanced materials offer a wider range of voltages and switching frequencies than conventional silicon-based devices. Building on this momentum, Renesas has announced the establishment of an in-house SiC production line and signed a 10-year SiC wafer supply agreement.

Renesas now aims to further expand its WBG product portfolio by leveraging Transphorm's expertise in GaN, an emerging material that enables higher switching frequencies, lower power losses and smaller form factors. These benefits enable customers to have systems with higher efficiency, smaller and lighter structures, and lower overall costs. As a result, too, demand for GaN is expected to grow by more than 50 per cent annually, according to industry research. Renesas will use Transphorm's automotive-grade GaN technology to develop new and enhanced power solutions, such as X-in-1 powertrain solutions for electric vehicles, as well as solutions for computing, energy, industrial and consumer applications.

The addition of Transphorm GaN technology enhances our momentum in the IGBT and SiC space," said Eri Shibata, CEO of Renesas, "Transphorm is a company led by a highly experienced team from the University of California, Santa Barbara, with roots in GaN power. It will drive and expand our power product line-up, one of our key growth pillars, enabling our customers to choose the best power solutions."

Dr Primit Parikh, co-founder, president and CEO of Transphorm, and Dr Umesh Mishra, co-founder and CTO of Transphorm, said, "Combined with Renesas' global footprint, broad range of solutions, and customer relationships, we are excited to pave the way for industry wide WBG material adoption, paving the way for its significant growth. This transaction will also enable us to further expand our service offerings to customers and deliver significant immediate cash value to our shareholders. In addition, it will provide a strong platform for our outstanding team to further develop Transphorm's superior GaN technology and products."

Renesas Electronics is said to be using Transphorm's automotive-grade GaN technology to develop new and enhanced power solutions, such as X-in-1 powertrain solutions for electric vehicles, as well as solutions for computing, energy, industrial and consumer applications.