According to Yole's forecast, by 2029, multiple growth points will drive the power GaN market size to more than US$2.2 billion.

Yole said that power GaN devices are transforming the power electronics industry, driving the market to grow 10 times between 2019 and 2023, and the market size is expected to exceed US$2 billion in 2023-2029, with a compound annual growth rate of 41%.

In the consumer electronics sector, power GaN is quickly becoming the technology of choice for fast chargers, especially when the power level reaches 300W. This field is attractive to new entrants because it has a low market entry barrier and has a large volume potential, as exemplified by the recent integration of Qromis' QST substrate into Lakesemi chargers. In addition, power GaN is entering the field of overvoltage protection (OVP) devices and home appliances.

In the automotive and mobile sectors, power GaN is becoming more and more popular in various applications. For example, 100V GaN devices are now used in automotive LiDAR systems for ADAS. It is expected to be widely adopted in automotive powertrains in 2-3 years, especially in on-board chargers (OBC) below 11kW. Despite competition from silicon technology, Power GaN is also penetrating high-end e-bikes and e-scooters.

In data centers, GaN-based power supplies above 3kW with 80Plus Titanium efficiency offer better form factors and more competitive pricing compared to silicon. Intermediate bus converters (IBCs) that require <100V devices are under development, and large-scale deployment of GaN is expected in 3-4 years. The telecommunications industry will benefit from the growing power requirements of 5G base stations, although this market is still smaller than data centers.

In addition, Power GaN is expanding into industrial, photovoltaic (PV) and aerospace sectors, further driving its growth.

01 Integration accelerated

Integration accelerated with major mergers and acquisitions in the industry

Since 2023, the Power GaN space has experienced significant consolidation, marked by major mergers and acquisitions. Standout deals include Infineon's $830 million acquisition of GaN Systems and Renesas' $339 million acquisition of Transphorm.

Other companies are also ramping up their Power GaN plans. For example, STMicroelectronics is building an 8-inch GaN fabrication facility in Tours, France. Nexperia is developing its e-mode technology in Hamburg and has recently invested $200 million in SiC and GaN. Samsung is building its GaN capacity and is expected to enter the market in 2025-2026. Market leader Innoscience and other Chinese players have been investing in the market since 2018-2019, building significant production capabilities. More recently, in July 2024, we noticed that onsemi released a technical paper on its first GaN product, a SiP device with an integrated gate driver.

Additionally, several companies have received significant funding, such as French startup Wise Integration, which raised $16.4 million in a Series B round led by imec.xpand. We expect more power electronics IDMs to enter the Power GaN industry in the future. This shift could lead to a GaN ecosystem dominated by IDM business models rather than fabless or fab-lite models.

Meanwhile, the power GaN industry has also faced setbacks, including the bankruptcies of NexGen, which specialized in vertical power GaN devices, and Belgian GaN foundry BelGaN. These events highlight the challenges and the need to invest significantly in a market that still lacks immediate returns on investment. Support from governments and private investors is critical to ensuring the future of this strategic technology.

02 Continuous technological 

advancement at the substrate, device and system levels

GaN epitaxy is a key step in the production of HEMT devices. It has been a focus of optimization by various players. Aixtron, a leading MOCVD equipment supplier, has launched its latest platform, the G10, which reduces epitaxy costs per wafer by 25% compared to other platforms. In addition, Taiwanese foundry VIS has established high-volume production capabilities for 650V 8-inch GaN-on-QST wafers. A recent teardown analysis by Yole SystemPlus found that GaN-on-QST technology was first used in chargers produced by Lakesemi.

As of 2024, the dominant technology remains 6-inch GaN-on-Si, with TSMC being the largest producer. However, 8-inch GaN-on-Si is gaining traction, thanks to capacity additions from companies such as Innoscience and new investments from other IDMs, including STMicroelectronics in Tours and Infineon in Villach and Gulin. Equipment manufacturers are even developing 12-inch MOCVD systems, and Infineon has demonstrated the first GaN-on-Si process. However, mass production and adoption of 12-inch wafers are not expected within the next five years.

At the device level, progress includes the development of devices exceeding 1200V. Transphorm and Power Integrations (PI) have already launched products using sapphire substrates. Alternatively, Qromis' QST substrates are being utilized, and VIS is embarking on a three-year project – which started in January 2024 – to develop a 1200V GaN-on-QST process. In addition, 600V/650V bidirectional devices represent a major technological advancement in 2024. Companies such as Navitas and Infineon have already launched these devices, targeting industrial applications. Bidirectional GaN devices can replace two Si MOSFETs connected back-to-back, significantly reducing the material cost (BOM).

03 Facing the challenge of rapid expansion of production capacity

Yole further pointed out that in 2023, the total power electronics market was $23.8 billion, including discrete devices and modules, and is expected to grow to $35.7 billion by 2029 at a CAGR of 7.0%23-29; the discrete market size was $15.5 billion in 2023 and is expected to reach $19.5 billion by 2029, with a CAGR of 3.9% from 2023 to 2029. The main applications driving this growth are xEV (OBC, DCDC) and DC charging infrastructure. Automotive and consumer are the largest market segments; driven by battery energy storage systems, electric vehicle DC chargers and xEVs, the power module market size will reach nearly $16.2 billion by 2029, with a CAGR of 12.0% from 2023 to 2029.

Yole further pointed out that the power device market is mainly divided into three material types: Si, SiC and GaN. Gallium oxide (Ga2O3) could be the next promising semiconductor for power devices in the long term. Silicon will remain the main component of this market, but SiC is gaining momentum with SiC modules in xEV and industrial applications. The main application for GaN will continue to be power supplies for consumers, followed by electric vehicle applications.

In the long term, as demand for power electronics devices grows in automotive and industrial applications, total wafer demand will also increase.

To meet end-system needs, power silicon wafer demand will grow to 48.7 million 8-inch equivalents/year, with continued growth in 12-inch silicon wafer demand being a key focus for silicon wafer manufacturers. GaN-on-Si uses 6-inch and 8-inch wafers. SiC wafer manufacturing capacity is growing rapidly, resulting in an oversupply situation - further exacerbated by lower-than-expected demand from the xEV market. The main SiC wafer diameter will remain 6-inch in the coming years, but the share of 8-inch wafers will continue to increase.

In Yole's view, after the surge in capacity, the power electronics industry will enter a phase of integration. The power electronics supply chain is constantly evolving, driven by different factors: wafer and device manufacturing capacity expansion; wafer and device manufacturers move to larger wafer diameters; many new entrants in silicon devices, gallium nitride and silicon carbide chips come from China; acquisitions of wafer, device, packaging and system manufacturers and equipment manufacturers are expanding their technology portfolios (Si, SiC, GaN...); in addition. System manufacturers horizontally integrate various applications (photovoltaics, wind energy, electric vehicle DC charging infrastructure, battery energy storage systems (BESS)...).

Yole said that the power electronics supply chain has experienced a period of rapid growth in manufacturing capacity, especially SiC and silicon devices and SiC wafers. Despite the sustainable driving force of power electronics applications, the current slowdown in demand for xEVs, coupled with the rapid growth of manufacturing capacity, has led to overcapacity, especially in the SiC field. This will lead to supply chain integration, driving technological innovation, price cuts and new strategies. There will be more opportunities for cooperation. There will be more mergers and acquisitions in the coming years!

Chinese companies have a very strong position in end-systems (PV installations, wind energy, electric vehicles, DC charging infrastructure for electric vehicles…) and in power converter manufacturing. They also have excellent coverage in silicon and silicon carbide wafer manufacturing as well as in power device packaging. The Chinese government and Chinese companies are working hard to complete the last piece of the puzzle for which China is still heavily dependent on foreign suppliers – bare die. The market share of Chinese power device manufacturers is expected to grow in the coming years.

Meanwhile, Yole notes that SiC is expanding its reach in industrial applications and its competitive position with silicon and GaN. As Yole notes, converter manufacturers have more choices of semiconductor types (Si, SiC, GaN), device voltage/current ranges, packaging, integration levels, etc. Due to increased competition among device vendors, device characteristics are more closely matched to converter requirements, which can reduce prices.

However, this does increase the complexity of selecting the most suitable device for the converter. SiC's reach and competitive position with silicon and GaN in industrial applications are increasing due to rapidly falling costs, increasing capacities, technological improvements, and new device characteristics that are more suitable for industrial applications. Various device manufacturers and their customers have introduced new voltage grades and are increasingly adopting these grades (e.g. 2.X kV SiC device grades, 400V SiC devices).

The overall trend is to adopt higher voltage systems, which drives the demand for higher voltage devices (even above 3.3kV). However, the demand is still small and some manufacturers are reluctant to take the step of manufacturing high-voltage devices. This is also due to the complexity of device design and manufacturing or the company's lack of suitable packaging capabilities. Wafer diameters are increasing: 8" to 12 "for silicon; 6" to 8" for SiC – the transition to 8" wafers is more complex than expected. Some players prefer to focus on high-volume 6" wafer manufacturing; 6" to 8" for GaN-on-Si.

Reference link: 

https://www.yolegroup.com/product/report/power-gan-2024/

https://www.yolegroup.com/product/report/status-of-the-power-electronic-industry-

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