Renesas Acquires Transphorm: $339M GaN Power Expansion

On the afternoon of January 11, 2024, at 3:00 PM Tokyo time, Renesas Electronics, a global leader in semiconductor solutions, and Transphorm, Inc., a prominent supplier of Gallium Nitride (GaN) power semiconductors, jointly announced the successful finalization of their acquisition agreement.

Pursuant to the terms of the agreement, a Renesas subsidiary will acquire all outstanding common shares of Transphorm at a cash price of $5.10 per share. This represents a significant premium of approximately 35% over Transphorm's closing price on January 10, 2024. Moreover, it reflects premiums of around 56% and 78% over the weighted average prices for the past twelve and six months, respectively. The total valuation of Transphorm in this transaction is estimated to be approximately $339 million.

This strategic acquisition positions Renesas to fortify its internal capabilities in Gallium Nitride (GaN), a pivotal material for the next generation of power semiconductors. The move is set to enhance Renesas' presence in rapidly evolving markets, including electric vehicles, computing (encompassing data centers, artificial intelligence, and infrastructure), renewable energy, industrial power supplies, and fast chargers/adapters.

In response to the escalating demand for efficient power systems, an essential component of the global carbon neutrality drive, industries are transitioning to advanced wide bandgap (WBG) materials like Silicon Carbide (SiC) and GaN. Renesas, in alignment with this industry shift, has recently announced the establishment of an internal SiC production line and secured a 10-year SiC wafer supply agreement.

The strategic objective for Renesas is to leverage the specialized expertise of Transphorm in GaN, thereby expanding its portfolio of WBG products. GaN, as an emerging material, offers advantages such as higher switching frequencies, lower power losses, and reduced form factors. These attributes contribute to the development of more efficient, compact, and lightweight systems, ultimately leading to lower overall costs for end-users. Industry projections anticipate a remarkable annual growth rate of over 50% for GaN.

Renesas plans to harness Transphorm's automotive-grade GaN technology to develop innovative enhanced power solutions. Examples include the X-in-1 powertrain solution for electric vehicles, as well as solutions tailored for computing, energy, industrial applications, and consumer electronics.