The $830-million USD all-cash transaction, which was first announced in March, has now closed after the two firms received all required regulatory clearances. The acquisition represents both a major Canadian tech exit and a landmark deal for Canada’s semiconductor sector. As part of the deal, Infineon has committed to retaining and growing GaN’s presence in Canada.
GaN power devices are a type of compound semiconductor—a chip industry niche where Canada has existing strength.
Matt Roberts, son of GaN Systems co-founder John Roberts, described the deal to BetaKit as a win for both Canadian tech overall and the country’s semiconductor industry specifically. The CMD Capital co-founder and general partner called it significant from both a dollar-figure perspective and because Infineon is now putting down roots in Canada.
“It’s great for startups that are trying to get off the ground in [semiconductors] … because it just means that you can point at companies in Canada that will be bringing talent back into the ecosystem or keeping talent here,” argued Roberts, who cited fellow Ottawa semiconductor firm Ranovus as an example of this.
The acquisition comes as Canada and other countries seek to bolster domestic semiconductor design and production capabilities amid a global chip shortage fuelled by the pandemic, the Russia-Ukraine war, and rising United States-China tensions.
GaN power devices are a type of compound semiconductor—a chip industry niche where Canada has existing strength. In its first policy report, which was published earlier this week, the Semiconductor Industry Leadership and Innovation Canada Action Network (SILICAN) identified compound semiconductors as one of a few areas of the chip sector that the country’s federal and provincial governments should focus its efforts on supporting.
Founded in 2008 by John Roberts and Girvan Patterson, GaN Systems is a global leader in gallium nitride (GaN) power semiconductors. The firm develops microchip components that are smaller, lighter, faster, and more energy efficient than silicon-only semiconductors. Infineon is a long-time GaN Systems partner, distributor, and co-developer.
Today, GaN Systems’ tech is used in smartphone chargers, laptop and smart speaker adapters, and street lighting by customers like Dell, Samsung, Siemens, and Philips. But the market is still developing, and there are potential applications and opportunities for GaN power semiconductors in emerging categories, such as cleantech and electric vehicles.
GaN Systems CEO Jim Witham argued in a statement from earlier this year that combining GaN Systems’ expertise and foundry corridors with Infineon’s in-house manufacturing capacity gives the Ottawa firm “maximum growth capacity.” In a LinkedIn post announcing the close of the acquisition, Witham wrote, “With our joint expertise in providing superior solutions, we will now write the next chapter in leveraging the potential of GaN.”
But not everyone was thrilled with the deal. Given GaN Systems’ promise, University of Toronto professor of energy systems Olivier Trescases told The Globe and Mail earlier this year that he believes the company’s sale before reaching its full potential marks a “disappointing” outcome.
Matt Roberts begs to differ. He argued that creating a standalone domestic semiconductor company to compete with the industry’s incumbents “just doesn’t happen anymore.”
“This is a boon for Canada,” Roberts added. “You now have a much more internationalized, much larger research-focused semiconductor institution anchored in Canada. This is good.”
By combining its “complementary strengths” in intellectual property, application understanding, and customer pipeline with that of GaN Systems, Infineon believes it is “in an excellent position to address various fast-growth applications.”
“GaN technology is paving the way for more energy-efficient and CO2-saving solutions that support decarbonization,” Infineon CEO Jochen Hanebeck said in a statement. “The acquisition of GaN Systems significantly accelerates our GaN roadmap and further strengthens Infineon’s leadership in power systems through mastery of all relevant power semiconductor technologies. We welcome our new colleagues from GaN Systems to Infineon.”
With the addition of GaN Systems, Infineon now has a total 450 GaN experts and more than 350 GaN patent families. Per Infineon, this expands the company’s position in the power semiconductor space and speeds up its path from product development to commercialization.
Feature image courtesy GaN Systems.