Some time ago, a British GaN wafer fab was acquired by a Chinese company. Yesterday, a Japanese companyGaN fabwas also acquired.

Acquisition of Fujitsu wafer fab

Equity dropped by half instead?

Transphorm is aGaNManufacturer, established in 2007. The AFSW wafer fab is a subsidiary jointly established by Transphorm and Fujitsu in 2013. It mainly producesHigh voltage GaNPower semiconductor wafers.

According to the announcement, the transaction was made throughGaNovationCompleted by the company, GaNovation was recently formed by Transphorm and JCP Capitaljoint venture。

After the transaction is completed,Fujitsu SemiconductorWithdrew from the AFSW wafer fab, after which it held a 51% stake in the AFSW wafer fab.

Interestingly, Transphorm’s shareholding in AFSW also changed from its previous49%, reduced to25%, and this part of the equity is still because Transphorm holds 25% ownership of GaNovation.

In other words, this transaction was funded by JCP Capital, and GaNovation acquired all the shares of the AFSW fab from Fujitsu and Transphorm.

Transphorm co-founder and president Primit Parikh said this would enable Transphorm to make direct capital expenditures on AFSWAbout 50% reduction, thereby improving P&L efficiency and "continuing our asset-light vertical integration model."

According to Transphorm’s June 2020 announcement, during the first six months of 2020 and 2019,AFSW’s revenuerespectively US$1.786 million (approximately RMB 11.54 million) andUS$6.281 million (approximately RMB 40.58 million), the net losses are respectivelyUS$6.684 million (approximately RMB 43.18 million)and US$4.545 million (approximately RMB 29.36 million).

To this end, Transphorm provided AFSW withUS$3.4 million (approximately RMB 21.97 million)andUS$2.7 million (approximately RMB 17.44 million), to fund AFSW’s factory operations. 

From January to March 2020, Transphorm’s revenue was onlyUS$1.1 million (approximately RMB 7.12 million), the revenue for the entire fiscal year last year was approximatelyMore than 82 million yuan。

With the introduction of JCP Capital, in addition to solving funding and equity issues, AFSW is also expected to expand production. According to reports, in the next few years, GaNovation will bring a large amount of capital to AFSW to expand GaN wafer manufacturing capabilities, and JCP Capital will also use their portfolio ecosystem to develop GaN product business with Transphorm, especially in the field of GaN fast chargers and adapters.

What does Fujitsu picture?

Fujitsu and Transphorm have a deep relationship. The establishment of Transphorm benefited from Fujitsu's funding, and it has raised approximately 100,000 yuan from Fujitsu and other investors.220 million US dollars (approximately 1.4 billion yuan)venture capital.

Transphorm developed on a pilot line600VAfter developing high-voltage gallium nitride on silicon, in order to mass-produce these technologies, Fujitsu and Transphorm jointly established AFSW in Japan in 2013 to buildSilicon CMOS compatible6-inch foundry with process. AFSW and TransphormSign an exclusive contract, responsible for handling wafer processing.

According to reports, Fujitsu will jointly design and develop assets and intellectual property rights of GaN power devicesTransfer to AFSW, make a physical investment in Transphorm to receive equivalentTransphorm shares。

At the same time, Fujitsu also assigned GaN power device employees to AFSW to work with Transphorm employees on development and production.

In January 2015, Transphorm and Fujitsu announced that AFSW's 6-inch wafer line began mass production of gallium nitride power devices for power supplies.

According to Transphorm, AFSW is the only GaN foundry to report defect densities for GaN-on-silicon high-voltage devices that are similar to in-house silicon CMOS/bipolar technologies - FIT rate < 1.0 and field failure rate < 3.3 dppm.

With this technology, Transphorm has established strategic alliances with automotive suppliers MARELLI, Yaskawa Electric and other companies to use gallium nitride in vehicle chargers, automotive inverters, motor inverters and fast charging.

However, on April 1, 2020, Fujitsu notified Transphorm that it intended to sell its 51% interest in AFSW to Transphorm and withdraw from the joint venture.

According to the announcement, this seems to be related to Fujitsu’s previous commitments, but it is not yet known what Fujitsu has gained from it.

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