Renesas Electronics Corporation (“Renesas,” TSE: 6723), a premier supplier of advanced semiconductor solutions, and Transphorm, Inc. (“Transphorm,” Nasdaq: TGAN), a global leader in robust gallium nitride (“GaN”) power semiconductors, recently announced that they have entered into a definitive agreement under which a subsidiary of Renesas will acquire all outstanding shares of Transphorm’s common stock for $5.10 per share in cash, representing a premium of approximately 35% to Transphorm’s closing price on January 10, 2024, a premium of approximately 56% to the volume weighted average price over the last twelve months and a premium of approximately 78% to the volume weighted average price over the last six months. The transaction values Transphorm at approximately $339 million. The acquisition will provide Renesas with in-house GaN technology, a key next-generation material for power semiconductors. It will expand its reach into fast-growing markets such as EVs, computing (data centers, AI, infrastructure), renewable energy, industrial power conversion, and fast chargers/adapters.
Demand for highly efficient power systems is increasing as building blocks for carbon neutrality. To address this trend, an industry-wide transition toward wide bandgap (“WBG”) materials, represented by silicon carbide (“SiC”) and GaN, is also being seen. These advanced materials allow a broader range of voltage and switching frequencies than conventional silicon-based devices. To build on this momentum, Renesas has announced the establishment of an in-house SiC production line, supported by a 10-year SiC wafer supply agreement.
Renesas aims to further expand its WBG portfolio with Transphorm’s expertise in GaN, an emerging material that enables higher switching frequency, lower power losses, and smaller form factors. These benefits empower customers’ systems with greater efficiency, smaller and lighter composition, and lower overall cost. As such, demand for GaN is predicted to grow by more than 50 percent annually, according to an industry study. Renesas will implement Transphorm’s auto-qualified GaN technology to develop new enhanced power solution offerings, such as X-in-1 powertrain solutions for EVs and computing, energy, industrial and consumer applications.
“Transphorm is a company uniquely led by a seasoned team rooted in GaN power and with origins from the University of California at Santa Barbara,” said Hidetoshi Shibata, CEO of Renesas. “The addition of Transphorm’s GaN technology builds on our momentum in IGBT and SiC. It will fuel and expand our power portfolio as a key pillar of growth, offering our customers the full ability to choose their optimal power solutions.”
“Combined with Renesas’ worldwide footprint, breadth of solution offerings, and customer relationships, we are excited to pave the way for industry-wide adoption of WBG materials and set the stage for significant growth. This transaction will also allow us to offer further expanded services to our customers and deliver significant immediate cash value to our stockholders,” said Dr. Primit Parikh, Co-founder, President, and CEO of Transphorm, and Dr. Umesh Mishra, Co-founder and CTO of Transphorm. “Additionally, it will provide a strong platform for our exceptional team to further Transphorm’s leading GaN technology and products.”
