Hi, [Stephen].
Hello. How are you doing?
I'm doing well. How are you?
I'm doing fine. It's been a busy week. We have a lot to talk about.
Oh, I'm sure. Finally get to unveil all the behind the scenes work.
Yes. Yeah.
Mm-hmm.
We've done a lot of good work. It's a great team. Great new team.
Mm-hmm.
I'm very happy to be working together.
Good. Well, seems like so far the markets are appreciating these efforts as well.
Mm-hmm. Yes.
More, more to come, I'm sure.
Indeed. I see that, Ron Shelton has joined. He is our new CFO.
Hey, everybody. I can go on video. There you go. Hey.
Hi, Ron. How are you?
I'm well. How about you?
Doing well. Yeah. We haven't officially met, but.
We have now.
We have now. Navitas is lucky to have you.
Yeah. Well, I'm lucky to be there, so it'll be good. I'm not there right now, I'm here. Yeah, it's going well. It's been busy, but it's going super well, so.
Yeah. Yeah.
Pretty exciting stuff. Yeah.
Good to be joining as well.
Yeah.
Actually, Ed, Ron is up in the Bay Area. He's not in L.A., so you might not know each other.
Oh, okay. Well, close enough. Closer than L.A. I'm in Portland.
Oh, are you?
Right in between. Yeah.
Okay.
Yep. Yep.
I get up there every now and then, so next time I'm up, I'll have to swing by.
Yes, yes, please let me know.
I have a stepdaughter that lives there, and then I have my own, my son who lives in Seattle, and they've been moaning about how hot it's been.
Oh, yeah. Yeah. It's, I don't know if it's called a heat wave if it's constant. I don't think it's a heat wave anymore.
Yeah. It's been unusually hot there or warm. Hot.
Mm-hmm.
Yeah.
Yeah, yeah.
That's what I said.
Yeah, certainly. It's getting close to the Taiwanese climate up in the Pacific Northwest. Just got this humidity here and we got the heat. It's making me feel like I'm back at home.
Has it been humid?
Yeah. I mean.
Little bit. Well, I guess it's better all the time.
Not Taiwan humid. Taiwan humid is 95 degrees humidity.
Yeah.
Here, it's about 60, so, yeah.
That's not humid.
down in L.A. you guys constantly have. Well, the folks in it, who live in L.A., it's like 20%, 10% humidity.
Yeah. Yeah. It's pretty moderate down there.
Mm-hmm. Mm-hmm.
Portland's been in the 90s, right? 90s? Yeah.
Yeah. I think a couple times we've cracked 100. Last summer, I think we were at 110 almost for a brief period during the day. It basically scorched all of the foliage in Oregon. You had these poor guys who grow Christmas trees for a living, and it's all gone. 'Cause a single day hit like that basically kills you know any plant that's sensitive, right?
Oh, I didn't think of that. Wow.
Poor folks.
Yeah, that's crazy. Wow.
Yeah.
All right. Well, soon enough it'll be raining all winter.
Yeah. Well, hey, we need some Navitas high-speed switching power ICs to reduce carbon impact, right? Isn't that why we're all here? This is.
That is true. That's one thing.
You know, I read the very nice IEEE article, by the way. Very well done, Stephen. Yeah. Very good messaging around climate.
Yeah. It's very important. I mean, the next generation of semiconductors, whether it's GaN or silicon, the chips are so small compared to silicon. You save carbon there.
Mm-hmm.
The fact that they're so efficient and we can, you know, convert from gasoline cars to electric cars, from, you know, gas cooking and heating to heat pumps.
Mm-hmm.
That's a huge benefit, and it's nice to be part of that. We can.
Mm-hmm.
We can feel good about saving the earth and make money at the same time. That's a good thing.
Right. That's a good way to rack up the positive credits in life.
Yeah.
Get some positive karma going there. Good.
That's true. Gene is on his way. He should be joining in just a moment.
Okay. Gotcha. In due time, those positive credits and karma will factor itself into the stock price.
It will. Actually, we are talking.
That's not a fact well accepted in Wall Street yet, so.
Yeah.
It will make it.
There are people. We talked to a few guys this week actually who are very interested in the green side of it. You know.
Mm-hmm.
Whether it's Barclays or it's
Mm-hmm.
Barron's, they've all got their different sections based on sustainability.
Mm-hmm.
It's becoming a big factor.
Good.
Yeah. It's not quite there yet, but it's definitely becoming that way. Here is Gene.
Hello.
Hello.
Hello, Edward. Sorry to be a few minutes late.
Hi, Gene.
Thank you.
No worries. Well, good to have you here. It gave other folks a little bit of time to roll in, but I think it's about time to get started. Well, thank you all from Navitas for attending today's session. I think the people on the call are probably pretty excited to hear about some of your recent announcements. I think there are probably a lot of juicy details to get into.
I think specifically, you know, some of the outlook you have for the acquired companies, but you know, I saw from the preview you guys gave me earlier today that we'll talk a little bit in-depth about the benchmarks that you guys did ahead of making some of these moves. I think this will be really compelling for the audience. I think overall just a fantastic strategy to make these acquisitions. With that, once again, thank you Navitas folks for attending and thank you everybody else here on the call for attending this session. My name is Edward Chyau. I'm the Managing Director of Mesh Ventures.
We were fortunate enough to be an investor in Navitas when they were still a private company. Since then, as a public company, you know, we still engage with them regularly. This is, you know, a fantastic opportunity to get the folks at Navitas in front of a lot of our friends in the Taiwanese ecosystem. With that, perhaps you guys can give some quick intros of yourself and then we can get underway.
Sounds great. Thank you so much, Edward, for this opportunity. I really appreciate it, and we look forward to telling you more about Navitas and some of these recent developments. I'm the CEO, Gene Sheridan, and co-founder. With us today is Ron Shelton, our relatively new CFO that's joined us in the last few months, and we also have Stephen Oliver, who heads up corporate marketing and investor relations.
Okay.
Shall we go ahead and dig in? We have a short presentation, then look forward to a good Q&A session with the group. Excellent. Well, let's go ahead and start with the next slide, Stephen, and I'll dig in. Of course, you may know Navitas from our history as the leader in GaN power integrated circuits, and we look forward to giving you an update about that core business. Of course it's exceptionally big news that just this last Monday when we announced our Q2 earnings, we also announced the acquisition of a leading silicon carbide company called GeneSiC. This is a U.S. based company, that's off to an incredible start in terms of both financial achievements, but also technological achievements and customer and market achievements, and we'll walk through a number of those.
We see this as the perfect complementary investment and acquisition for Navitas. As we'll explain in the presentation, gallium nitride serves a large part of the next-generation power semiconductor market, and silicon carbide serves the other large part of the power semiconductor market. Together, it creates Navitas as the only pure play next-generation power semiconductor company focused on these two exciting new materials that cover almost all of the power semiconductor market without the distraction or defocus of focusing on legacy power silicon devices that have dominated our market for the last 30 years. First, we wanna give you an overview, just a high-level view of which markets and applications are likely served by these exciting new markets. On the X-axis is voltage, and on the Y-axis is power.
You don't need to be an expert in these voltages and powers other than it helps to give some clarity on where the natural fits are for gallium nitride and silicon, and also where there's an overlap area in the center. Gallium nitride has an excellent sweet spot at 650 V and below, all the way down to about 80 V . Below that, we expect to see silicon continue to be a preferred technology in that smaller segment. As you go above the medium voltage, we might call medium voltage or medium power level that is likely dominated by GaN in the future, we move into the territory that's likely a big play for silicon carbide. Specifically over 1200 V, silicon carbide has already proven in picking up significant market share compared to traditional, silicon.
tend to be larger, power systems, infrastructure systems. As power goes up, voltage goes up, and that's why you see most of these applications form almost a linear line, from left to right and from the lower left to upper right. In the silicon carbide area, where we're looking at 1200 V and up, this tends to be high performance cars that are using 800 V batteries. Other large systems like the external off-board charging of those EV systems, very high-powered industrial, power supply backups called UPS, industrial motor drives, robotics, commercial scale solar implementations, rail power, grid power, and wind power to name a few. silicon carbide market has developed actually a decade before GaN came along, so it's actually a more mature market, totaling almost $1.5 billion this year.
GaN is kind of the new kid on the block, pioneered by Navitas, but coming up fast and likely again expected to dominate, the darker blue section, about a $7 billion market opportunity. Navitas' roadmap basically starts at low power on the bottom of the blue curve and moves to higher power towards the top end of that, darker blue GaN area. We started with mobile charging, fast charging your phone, tablets, and laptops in consumer applications like TV and desktop PCs. We're now shifting and moving into home appliances and different motor drive, lower power motor drive applications. We're starting to expand into solar residential, EV on the 400 V battery side, and a large part of the data center segments, to name a few.
Here, uniquely, we're telling a different story that most are not telling you, which is there is an overlap region. There is an area where there can be room for both, and it's unclear which one would dominate and which one would fit best where. This is really in the 650 V range, but in the higher power applications. You see we're highlighting really four, part of the data center market and higher power UPS data center, some factory automation, residential solar, and a good part of the 400 V EV market, as opposed to the 800 V battery market that I highlighted earlier. Each of these three sections represent very, very big opportunities, as you can see with the numbers on the far left.
What we're excited about is that Navitas is the first company to offer both, gallium nitride and silicon carbide for power applications. It gives us a very objective view on delivering the best technology or combination of technologies for any and all of these applications. We can do it in an objective way. Almost all companies out there are either focused on GaN or focused on silicon carbide in the power space. We're focused on both, and we don't have the distraction or, dilution of our focus without legacy silicon in the picture. It's pretty exciting. Allows us to really solve all of the technology choices for all of these markets.
First, let us remind you about our core business and where we started just in the last two or three years, ramping the revenues quite quickly, and that's in the mobile charging space. Over two years ago, three years ago, we had big pickup from the aftermarket players ramping fast, Amazon, Baseus, Belkin, Spigen, Anker, Aukey, and many others. In the last two years, things really heated up as the mobile players themselves started adopting chargers to go in the box with their phones, with their tablets, and with their laptops. This includes pretty much the who's who in mobile devices across all those end applications. Samsung, Motorola, LG, Dell, OPPO, Lenovo, Xiaomi, Realme, and many others. Pretty much everybody out there has adopted GaN chargers from Navitas for those phones, tablets, and laptops.
In fact, we now have over 225 GaN chargers in production. We have over 290 in development with customers today to launch in the coming quarters. 100% of the top 10 smartphone and laptop makers in the world are adopting our technology, either shipping in production today or being planned in their next generation chargers for the near future. In aggregate, we've shipped over 50 million units of our GaN chips without a single GaN related field failure. An incredibly difficult field track record and one that's especially important as we go into more reliability-driven and sensitive markets like data center, solar, and EV.
This first market, shown in the lower left, is a big opportunity, a $2 billion market opportunity in mobile chargers and a multi billion dollar one that we can serve with our existing products in consumer, and we don't have to just charge batteries. All these consumer applications are getting internet connected with more data, requires more power. We can deliver that more power with higher efficiency and smaller size, lighter weight, and ultimately lower cost power supplies into all those markets. That is all the lower power market that our current product portfolio services today and has a lot of growth ahead of it. In the last year, since our IPO, we've expanded our GaN portfolio to make more powerful chips, new chips that we just started sampling in the last couple of quarters to serve solar, data center, and EV.
Each of those are billion dollar plus opportunities and a perfect fit for energy saving, more powerful, smaller size, lighter weight, and lower cost power supplies in each of those markets. While there's not many customers that have yet announced their adoption because it's still early days, we expect solar revenues to start ramping in 2024, given the about 18 months of field testing that still needs to be done before those customers launch. Famously, Enphase is one public company last year who's a leader in solar residential, announced their plans to convert from silicon to GaN and to partner with Navitas to make that happen. In data centers, that's moving even faster. That'll launch in revenues for Navitas, next year in 2023.
That is magnified or accelerated by the fact that in Europe, starting in January of 2023, there's a new standard that requires all server power supplies to meet Titanium Plus standards. These are very high efficiency standards, almost impossible for silicon to meet. But with GaN, we can achieve it. We launched our first GaN platform of a server power supply that's already Titanium Plus, and our customers are taking that, adopting it, and modifying it for their final production implementations that ramp next year. The longest and biggest opportunity is electric vehicle, more than a $2 billion market opportunity. Again, we've started that sampling today. We have multiple platforms in development through our system design centers and over half a dozen customers that are adopting these platforms and starting their product development, which will ultimately translate into significant revenue by 2025.
This leads us to the biggest announcement of Monday, the acquisition of GeneSiC. This is a small company that was not well-known. It's a very engineering technology-driven company led by Dr. Ranbir Singh. He has literally spent his entire career studying, innovating, and perfecting silicon carbide power devices. He founded the company nearly 20 years ago. This is a long time in the making. Silicon carbide is an extremely difficult material and device to produce that most companies in the industry, if they've gotten it right, have been working on it for 20 years. GeneSiC has taken it to a whole another level, which we'll show you in a minute, achieving unprecedented performance, robustness, and product range that is better than the big guys that are already out there, that many people that look at this market are aware of.
He's accompanied by Dr. Sid Sundaresan, he's the VP of Technology, and these two together are a real powerhouse in the creation and invention of this technology. What we loved about it even more is it's a very small team, almost all engineers. They built this technology, perfected it, brought it to market only in the last two or three years, and it is setting industry benchmarks and rapidly ramped to $25 million estimated for this year. Very profitable, so it's immediately accretive to Navitas in terms of the financial benefits, reducing our cash burn, improving our margins, reducing the time to profitability for our company. We have invested in all of the infrastructure and talent that they need. They did not invest in sales, marketing, operations, frankly, and certainly not in the strong technical design centers that we've created in electric vehicle, data center, and others.
Really we are the perfect match. We can immediately bolt on this exciting technology, this amazing engineering team. If they can go from zero to $25 million with no sales force, but just a simple distribution network, we can put our very strong, sophisticated technical sales team and our system design centers to work and dramatically accelerate the growth curve that they've already achieved. It's a really a perfect fit for us, very exciting technology, and literally doubles or triples the market opportunity for our company overnight. Let me just touch base a little bit on the three things I mentioned about the performance, the robustness, and the range. This is a little bit technical, but we wanted to make the point that this is actually in the last six months, we've done extensive testing, head-to-head bench-level testing of GeneSiC technology.
This is their 1200 V, 40-milliohm, a very popular type of part in the industry and one of their highest volume runners that they're selling today. Suppliers two, three, four and five are the top four out in the industry today that have significant share and a lot more revenue. In the end, the key to any power device is to minimize the resistance, minimize the energy loss, and ultimately deliver high efficiency in the actual application. That means when running at temperature with full power under two different circuit configurations. Our whole world can be broken into two types of circuits, hard switching and soft switching. Most companies have to focus on one or the other.
What's impressive here is not only did they achieve the best figure of merit, which means the lowest power loss or conversely, the highest efficiency, a lower number is better in this case. Not only did they achieve that best performance, they did it simultaneously in both of these two different popular configurations, hard switching and soft switching. Ultimately, what does this mean? It translates into having faster switching, higher energy saving, smaller size, lighter weight, and ultimately lower cost. All the things we strive for in power electronics, and certainly with power semiconductors. Of equal importance to the performance is ruggedness. We should always keep in mind, these are high voltage power devices that have to withstand very harsh electrical environments, high current, high temperature, high power. They need to survive it. They need to not fail.
Here again, the robustness results that we've seen and tested head-to-head compared to competitors is unprecedented in our experience. There's two key metrics here. One is avalanche. This is a popular rating on whether or not the device can handle a certain amount of excess energy and not fail. In their case, they are the highest rated device that has 100% testing, meaning it's 100% tested and guaranteed to the customer, and it's three times better, nearly three times better than the closest competitor. In addition to handling lots of energy without failing, the question is, how much time can you handle excess energy without failing? That's called short circuit withstand time. Here again, compared to the nearest competitors, up to two times more, longer time achieved without failure, under this extreme short circuit condition.
Really impressive results, especially when you consider they've optimized for both of the key topologies for the most efficiency, as I showed in the last slide, and now delivered it with incredible ruggedness compared to competitors in the space. Next, the other achievement. As I mentioned, this is an engineering driven company that did an amazing job with the technology and the engineering, but built no sales force, and in a relatively short period of time since commercializing their latest generation that sets all these benchmarks, they've created over 500 diverse and synergistic customers. It's got a very long tail. We were amazed at how many of these are customers purchasing their products today. But we do see some focus around three major segments, and these are exactly the markets we were targeting with GaN. Electric vehicle, including the off-board chargers.
A lot of great names like Mercedes-Benz, AMG, Mercedes-AMG, BRUSA Elektronik AG, BYD Company, now the leader last quarter ahead of Tesla, Inc., Geely, Inovance, Jaguar, Saab, Shinry, LG Magna e-Powertrain, who's a supplier to many of the top U.S. brands that we don't list. A lot of great names in solar, also similar achievement. Dozens of solar inverter customers, dozens of energy storage customers, and many, many more in the industrial motor space and broader power system space. We're very impressed and excited about the diversity with just a distribution channel and no technical selling sales force like Navitas is going to bring, but also the concentration in the same exact markets where we plan to go with GaN. Frankly, it accelerates our participation in solar energy storage and EV by two -three years.
I just mentioned to you we outlined our timeline for revenues in those markets with GaN. It takes time. You have to start from the beginning. Two or three year development cycles before you're shipping in revenue. Instead of waiting till 2024, 2025, now we are immediately shipping to a lot of the same customers that we are targeting, and that will certainly accelerate our time to sell GaN to those same customers because there is a lot of overlap, as I described earlier, a lot of synergy. At the same time, it brings a lot of diversity with all these broad markets and additional customers and of course, the higher voltage and higher power capability that we described on that earlier slide. That's the big news. It was also exciting.
We put out a press release, but our Q2 earnings was a great opportunity to give a little bit more color on the second acquisition we completed just in the last two months. This is a small company out of Belgium called VDD Tech. Digital isolators don't get a lot of attention, but they're actually very popular and required in all power systems that we're targeting. These are silicon-based. They do a function that GaN and silicon carbide cannot today, but they're very necessary, very critical. In the past, we would design these into our systems, working with our customers from suppliers like Texas Instruments and Silicon Labs. We were very frustrated. Nobody made really good digital isolators optimized for the higher speed of gallium nitride and silicon carbide. We debated, should we try to develop our own?
Should we try to convince TI and Silicon Labs to do some modifications for us? We came across this small company who had done exactly that and spent the last five years optimizing silicon digital isolators to handle high speeds for silicon carbide and GaN-based power systems. It's a very small team. It was a very low cost acquisition for us, and ultimately puts us in the game. It adds up to 12 new digital isolators per system. The prices range from $0.20- $1, so there's a lot of additional content, and we'll sell these starting next year. We'll productize them in 2023. The revenue will ramp shortly after that. We can sell them independently as a chipset to deliver more value and content to our customers.
Ultimately, integrating this technology in with the gallium nitride and the silicon carbide is an even more exciting future to make our devices, our new silicon carbide devices and our GaN ICs even more valuable as isolated, optimized power switches, which is sort of a dream to a power electronics engineer. We're very excited about this technology and very low cost to add it in. They're nearly done with production, which is why we can launch the products quite soon, likely in the first half of next year. Finally, I wanted to relate this back to our go-to-market strategy, which is important and a perfect fit to silicon carbide. You know, we start with a great transistor in the lower left. We make a great gallium nitride discrete transistor, just like silicon carbide.
The GeneSiC team has made an amazing silicon carbide power transistor. In our GaN world, we've gone three levels deeper, you could say, than that. We've done power IC circuit integration, innovation, and integrated those circuits into the GaN chip monolithically. We went further than that and went to a power stage innovation and in the package, integrating even more value add. Ultimately, we have our system design centers that teach our customer and co-develop the complete system, which is not only valuable to accelerate the time to deliver an optimized GaN-based or silicon carbide-based system, but that's all we also teach is our design team who makes the chips. How do we make the next generation even better? Because we have that deep system knowledge which we can translate back into the power chip.
This model will fit perfectly with silicon carbide as it has been working great for gallium nitride. Silicon carbide is vertical, so we will not likely see the monolithic integration that Navitas has done in the world of GaN, where frankly, we've got great silicon designers that can create silicon chips that will add drivers, sensing, protection, control, digital isolation, like we just talked about with VDD Tech, all those layers of value I'm confident will get rolled in. Of course, silicon carbide will immediately leverage the investment we've already made in the electric vehicle system design center we have today, designing some very exciting next-generation onboard chargers, as well as our data center design center that's already well underway, designing those Titanium Plus efficiency power supplies using first GaN, and now we'll have the option to do that with silicon carbide.
It's again, a perfect synergy and a real exciting way to tap into silicon carbide market, which is ten times bigger, by the way, than the GaN market. $1.5 billion roughly today for silicon carbide. GaN is still the new kid on the block and just growing up at about a $150 million TAM this year with Navitas as the leader. Finally, a bigger picture view. We're super excited, and we consider it our mission in life to electrify our world. Gallium nitride and silicon carbide simply make electricity more efficient, more reliable, and ultimately lower cost. The world needs to move from 80% fossil fuels to 80% electricity. This is where we're headed, both on energy sources, moving away from fossil fuel, oil and gas, to renewables, which is the immediate creation of electrical energy.
Also don't forget about the energy applications or uses. 80% also here is gas and oil-based. Gas cars, gas cooking, gas heating, 80%. That's a big problem. That's a big opportunity. The world is gonna go from 80% fossil fuels to 80% electricity. Navitas is gonna make it happen, make it more efficient, more reliable, and lower cost with gallium nitride and silicon carbide. Today, the market is about $20 billion. We sell no power chips when fossil fuels are used. Imagine when the world goes from 80% fossil fuels to 80% electricity, that $20 billion will go through the roof. It's hard to predict exactly how big it's gonna be, but some of the models suggest it's easily a $50 billion market with $40 billion of it embedded with GaN and silicon carbide.
It's definitely a multi-decade secular trend that we don't wanna just ride the trend, we wanna accelerate the trend. This is our mission. We're super excited about it, and we couldn't be happier about the addition of silicon carbide and GeneSiC to our team. Thanks, Edward. I'd love to open it up for any Q&A.
Fantastic. Well, I hope to see you all in 2050.
Yes. Yep.
Well, thank you for that. That was, I think a really good rundown of the acquisitions made. We'd love to get a little bit of an understanding of the GeneSiC acquisition. They're contributing revenue to you guys come second quarter of this quarter already. It looks like they have quite a lot of customers, but the revenue portion, I think is still growing. Can you give some color into, you know, what stage they are with these customers and how you expect that to ramp?
Yeah, definitely. We were pretty impressed and amazed that such a small team and a very engineering-driven team could actually have 500 paying customers today. These are production and pre-production customers. That's a broad, diverse lift. As I highlighted, the concentration where we see it was perfectly where we wanted it, solar, energy storage, and EV, immediately giving synergistic customer approvals, customer relationships, and opportunity to not only accelerate those markets with our strong technical sales and system design centers, but actually then accelerate the adoption of GaN in likely those same markets. A really nice fit. And we estimated they're growing 60%. Well, it's demonstrated 60% growth, and obviously there's a great opportunity to accelerate that with all of the resources that Navitas can bring.
Great. Thank you. Shifting gears to, I think, something that especially some of the Taiwanese investors may be interested in, when we look at really just the financial portion of this post-transaction, you know, when we look at, well, the amount of cash that is going out to support for this acquisition, the cash position remaining, and kind of the operating costs that are associated with the acquisition, can you share some of your thoughts here, either Gene or Ron, in terms of how you guys see cash flow in the coming years? You know, I guess, do you expect to be able to reach cash flow positive with the existing cash position?
I will turn it to Ron to talk through the financial benefits.
Mm-hmm.
Implications of the deal.
Yeah. Thanks, Gene. Yeah, great question. I think the answer is, you know, we feel really good about our cash and liquidity position right now. After the deal, we still have $140 million in cash, virtually no debt. As Gene talked about, you know, the transaction was immediately accretive. You know, it's got revenue, it's got EBITDA, very high EBITDA margins, so it's quite profitable. Right out of the box, it's you know, helping earnings, it's reducing our burn, and if anything, over time, it'll actually shorten our time to cash flow break even. We feel really comfortable with the cash we have on hand right now, and have. You know, we got asked this question in a call the other day.
Mm-hmm.
About whether or not we thought we might approach the capital markets for equity or debt. Absolutely not. From.
Mm-hmm.
We have plenty of cash to operate the organic business.
Good. Thank you.
Yeah.
All right. Well, I don't want to hog the mic here, and so would like to turn this to anyone on the call who would like to ask a question, please feel free to unmute yourself. If you feel more comfortable sending the questions to me, please go ahead and do that as well. Okay. Usually takes a few minutes for people to warm up to this.
Right.
In my experience, I'll jump in here with a couple more questions. I think there was a pretty good question during the earnings call, kind of delineating, you know, the traction that you guys have, you know, with the gallium nitride products, versus silicon carbide products for the EV space. Specifically, there are already several programs ongoing for onboard chargers. You know, I think it'd be great to kind of highlight, you know, some of the development there, and when you expect that to come to fruition. I think perhaps, as a refresher to maybe some of the folks here, to highlight on the importance of efficient onboard chargers.
You know, I was telling Stephen earlier, the most recent publication for IEEE power electronics, I think, goes through a pretty good section there talking about why improved onboard chargers is critical to EV adoption.
Yeah. In fact, if you look at the three main factors that are going to influence, either speed up or decelerate EV adoption, Gallium Nitride and Silicon Carbide can influence all three. One is certainly charging speed. Home chargers today, and of course Superchargers are not that popular around the world with Tesla, but home chargers today can take up to 10 hours to fully charge your EV. That might be fine for overnight charging, but you don't always have 10 hours. Those are 6.7 kW chargers. We're developing today with our customers 20 kW, three times more powerful, three times faster charging EV. We know charging is a big concern or a big factor, as you highlighted, but we can also affect other things like driving range.
By making all the key power electronic systems more efficient, we can deliver more of that battery energy to push to moving the car, but for a longer distance for the same battery size. The preliminary estimates are 5% or 10% extended driving range, and every 1% is extremely hard to come by, so those are really big numbers. Also conversely, the EV car is still a little bit more expensive than an equivalent gas car. The number one reason, of course, is the battery, and that's coming down, but not coming down faster. In our case, when we make the entire power electronics more efficient for the same driving range, we can shrink the size, weight, and cost of that battery by that same 5% or 10%, cutting a significant amount of money out of that EV premium.
Looking at driving range, charging speed, and the cost premium, we can help progress both to ultimately accelerate EV adoption further beyond its rapid adoption today.
Great. Thank you. When do you expect some of these customers? I'm assuming some of these programs are going through partners like BRUSA, which then are in, you know, at least a design-in process if not already a process that's won, for whatever vehicle type to start MP-ing. Could you give a little bit of color into when you would approximately expect that to come in?
We have multiple platforms in development being co-designed with our customers for our gallium nitride technology using that EV design center that we opened up earlier this year. That's supporting, I think, up to eight customer programs. The names of them, other than BRUSA, who did come out last year and say they'd be partnering with Navitas to move from silicon to GaN using our technology. The other names aren't revealed, but we think there's actually a very good chance to accelerate that adoption given the silicon carbide penetration. In that case, we're already shipping to dozens of EV customers. I mentioned a number of them earlier. That gives us immediate EV revenue this year. Dozens of customer engagements, which will only accelerate the activity to bring GaN into those same customers.
Many of the same EV customers are developing both 800 V batteries, where you want silicon carbide, as well as 400 V based EVs, where you likely want gallium nitride. There's a great synergy there and a great acceleration to our plans to penetrate the EV market.
Great. Thank you. I wanna start sending out some questions from the audience. The first one has to do with, you know, what do you think is the competitive edge of the fabless model for Navitas both GaN and silicon carbide over IDM?
Yeah. I think there's two really important points here. One, a big advantage of GaN and silicon carbide both is not only the exciting new material, exciting technology, exciting performance, they do not need new fabs. They do not need advanced process geometries. They are better to utilize older, fully depreciated silicon fabs that were built one, two, maybe even three decades ago. We're doing that with TSMC today using their oldest fab in production built in the eighties. GeneSiC is working with X-FAB, same thing. The fab was built a long time ago, which means you've got a fully depreciated and also heavily loaded fab with a great cost structure. The last thing you'd wanna do is build a brand-new fab, because we all know the second key point to semiconductors is fab utilization.
They're really not cheaper than a fabless model until you get them 70%, 80%, 90% full. While these markets are still growing, is there any one single supplier that can fill an entire factory quickly to 80% to pay the $1 billion back it might take to buy that fab? It's a very questionable choice. We do think leveraging existing fabs that are full with silicon, and then you can slowly ramp the silicon down as it moves on to more advanced fabs while you ramp up gallium nitride and silicon carbide to fully utilize that fab. You have great economies of scale. We actually love the fabless model for the next few years, and we think GeneSiC followed the same exact model with X-FAB as we've done with TSMC, getting great cost structures today, great gross margins today.
I think as we grow, the right model probably will shift over time as the volumes can fill entire factories. This is where we've openly talked about strategic manufacturing investments, different ways we might apply that to transition that model over time to make sure we've got world-class costs to go with our world-class performance for both GaN and silicon carbide.
Great. Thank you. There was a follow-up question from somebody else to something slightly related, which is if you can help highlight some of the advantages of GeneSiC's device compared to others that have an IDM approach that is a little bit more specific on that comparison.
Yeah. I think the suppliers two, three, four, and five that I list on the performance page, I believe they're all IDM models. I think embedded there is actually the answer to the question.
Mm-hmm.
I frankly, we see the big guys focus more on supply chain, you know, for good reason. This market is in shortage. There's a lot of opinions out there that silicon carbide demand will outstrip supply for many years to come, which, you know, that's a great opportunity for us to make great market share gains if we have a great supply chain. Those performance metrics are against the silicon carbide IDM players, and they're very focused on, you know, a decent transistor. Mostly focused on the supply chain and big fab investments. In our case, another benefit of the silicon carbide design that we didn't highlight is the design robustness itself to support a very flexible supply chain.
It used to be a few years ago that Wolfspeed dominated the supply of the silicon carbide materials, the substrates, and even the epi wafers. They signed 10 year deals with many of their competitors, which is, of course, a very strange phenomenon. Today that's changing very quickly. We have qualified and are shipping today with multiple substrate vendors, multiple epi vendors, and all kinds of combinations, mixing and matching over a dozen combinations of substrate and epi, and X-FAB is ramping very quickly, tripling their capacity for silicon carbide just coincidentally, like TSMC has been tripling their GaN capacity. This has actually led to a lot of supply choice and flexibility, a lot of price competition among our substrate vendors, among our epi vendors.
Actually we think we're in a really good place on our cost structure, but also a really good place on capacity and upside. With their tripling, and our good substrate and epi options, we're offering 16-26 week lead times, which normally isn't the best in the world, but actually today the other guys are at 50, 60 weeks, and sometimes on allocation without any lead time at all. That's adding to our strength in availability and upside to even enhance our market share gains on top of the great performance robustness and product range that they have from GeneSiC.
Great. Thank you. Next question is regarding, you know, last quarter, you had mentioned that the silicon controllers was holding back some of the shipments with the acquisition of a silicon carbide player. How do you expect or how do you plan to keep that type of shortage situation from happening again?
The good thing there is when you go into higher power systems where you tend to, of course, target silicon carbide, you're not working with application-specific controllers, ASICs, which is what we saw dominantly in the mobile and consumer space for our GaN chips. In the mobile and consumer space, those ASICs needed to be redesigned to be high frequency capable to match the frequency of GaN. We worked with some limited partners to do it, but there weren't as many, there weren't enough of them when the shortage came along, and we worked with our customers to try to encourage more partners to make that happen, ultimately alleviating some of this challenge. If you go to the high-power systems, they're working with DSPs and microcontrollers, and the vast majority of them are digital chips at their core and capable of operating at higher frequency already.
We don't anticipate any redesigns of those systems. The infrastructure's there. They have their preferred DSP or micro suppliers. There's no need for that redesign. As a result, of course there can be shortages in DSPs and microcontrollers, but there's a lot of big semiconductor companies providing a lot of choice for those controllers, and we don't need to wait for some significant redesign to drive the adoption of silicon carbide.
Got it. All right. Another question around GeneSiC. Are there orders now for mass production, or is it just sampling?
Yes. This year we're estimating $25 million in revenue this year. This is many, many customers. We mentioned over 500 paying customers, either production or pre-production. It's significant revenue, and as Ron explained, financially very profitable, immediately accretive to the company, over 25% EBITDA, which is really impressive for a company this scale and size. We're in volume production with them ramping quickly, as I said, about 60% average growth, and we hope to accelerate that while we bring all our resources to bear on that technology.
Got it. I'm not sure if you can share this, but an audience member had asked, you know, what is their wafer per month at X-FAB this year or next year?
Yeah, I don't think it's public. We'll check with X-FAB. It's, you know, it's ironic. It's very similar, analogous, I think coincidentally to TSMC, the fab traditionally is an older fab, was full with a lot of silicon. They're ramping down the silicon making room and retrofitting silicon carbide just as we're retrofitting TSMC for GaN. You can retrofit these older fabs for sort of pennies on the dollar compared to the price to build a brand-new GaN dedicated fab or silicon carbide dedicated fab. I don't believe the numbers are public yet, but certainly as we get their permission, we'd love to share those sort of figures.
Got it. Kind of reverting back to a supply chain point that you had made earlier, is a question from the audience wanting to get more detail in any type of capacity issues that you potentially see in the supply chain, especially in light of geopolitical concerns.
Yeah. I don't see any geopolitical concerns at this point. Some of our biggest customers for GeneSiC are actually in China and throughout Asia, so we're doing a lot of great business. We have no export control restrictions there. I would actually add, though, even though X-FAB is in the process of tripling the capacity, I'm here at GeneSiC headquarters this week, of course, working on the integration, and the big theme to all the calls with the customers and sales and the internal is, you know, we can ship everything we can build. We're going as fast as we can. A lot of this pressure is we wanna get at that tripling of capacity as fast as we can.
That speaks to the fact that there is just a lot of demand out there for silicon carbide, and we're certainly benefiting from it and expecting to take a lot of share to take advantage of that and the great technology that's been developed.
Fantastic. Here's a question that I think is partially answered through some of the presentation, but the question is about sort of the direct competition for GeneSiC today, and you mentioned it's a lot of the IDM folks. You can see if you want to add any more detail there. Then the follow-up question to this is, if you can share more about product plans for the automotive market. I suppose, you know, since it's already apparent that they are shipping to automotive customers, you know, if anything, I guess you can share in terms of any future plans on the roadmap with GeneSiC.
Yeah. I would add that actually within EV there's these three main applications, onboard charger or OBC, the DC-DC converter, which takes the energy from the battery and distributes it in the car, and then the traction controller, the electric motor itself, which moves the car. Actually, our focus before GeneSiC, and still with GaN, was on the OBC and DC-DC. Turns out GeneSiC sales, I mentioned dozens of EV customers, a lot of revenue of that $25 million, that's actually also in OBC, DC-DC. We actually love that because we're very much a strategic go-to-market company that selects our application markets very carefully. We go very deep with our customers, build a lot of trust by bringing them a lot of system value as well as chip value.
Frankly, the big guys have a big spotlight right now on traction control. Obviously, that's where Tesla adopted silicon carbide for their electric motors. There's a lot of competition in that space, and I believe we will attack, approach, and win in traction control over time. While the big guys are very focused and very competitive and kind of fighting that out, we're gonna nimbly and innovatively come in and take a major position in GaN and silicon carbide for OBC and DC-DC. That gives you a little bit more color on exactly where we're approaching these customers and how both of these technologies, again, between a 400 V battery, likely for GaN, an 800 V battery, likely for silicon carbide, can give us great strength and ultimately great market position or dominance in that first segments of the EV market.
Great. Thank you. Next question is one I'm sure you'll be very happy to talk about, which is in your last revision, you know, we see that the European market is growing pretty quickly. If you can share more about what's driving that.
Yes, definitely. We actually wanted to spend more time on it 'cause it's a great story to talk about, both in our Q2 earnings. Obviously there's a big spotlight on understanding GeneSiC and VDD Tech and just latest financial results, but it's actually very exciting. All of our GaN work so far has been focused on power supplies, which chargers are just a different kind of switching power supply. 40% of the world's energy goes through inefficient motors using silicon chips. That's an incredible opportunity to upgrade the efficiency of those motors, save a lot of energy for the whole world and cut CO2. Motors is something we've never talked about focusing on. Motors are, you know, everywhere, not only just the EV traction control, as we said, it's in your home and all sorts of home appliances.
It dominates in factory infrastructure, in robotics, in just so many areas. That's huge. Actually last year we decided to target one customer that wanted to use our technology in a motor application. This is a European premium home appliance company. They haven't allowed us to share that name, but as soon as we can, we will. It is shipping in production, ramping fast. Europe went from zero last year to 38% of our revenue in Q2. That is not only exciting 'cause it's big revenue, it's ramping up our European focus. Got a whole new team we put in place there in the last year. This is obviously their number one big achievement. Behind that, it's making the motors more efficient, smaller, lighter weight, and ultimately cheaper.
Same types of value props, but brought to a whole new market around motors. First with home appliance, but second industrial motors, which is a huge long tail, typically great margins, very sticky. We're very excited about that. We're gonna have a lot more to talk about it. We already have dozens of customers in the pipeline. The products we have today are a good fit and obviously selling, but we're making a next generation version of those that'll make it even more optimized and more successful in home appliances first and motors and industrial second. GaN is a good fit for lower voltage, low power, in the same way silicon carbide is great for motors in higher voltage and higher power.
You'll see that same complementary nature between the two, and we certainly expect to bring both into that broader industrial motor market.
That's fantastic. I'm very excited to hear about this particular program also because there are some great motor manufacturers in Taiwan. I think as you guys get quick traction there are some really good partners who, you know, supply motors to some of the, you know, U.S., European appliance brands, but the motor is designed and fabricated in Taiwan.
Yeah, I completely agree. I think just like chargers, a lot of our markets have become commoditized with little incremental improvement in cost and efficiency and density over the years 'cause silicon wasn't delivering much. We are literally de-commoditizing markets one by one. Just like we're de-commoditizing and disrupting chargers for your phone or tablet, we're gonna de-commoditize the motor market in one application and market at a time. It's very exciting, but we also have to be very thoughtful and targeted in how we approach these things to deliver that maximum system value to drive the adoption.
Great. Next question is around how Navitas now plans to split the resources within the company, as far as business engagement goes, between gallium nitride and silicon carbide.
Yeah. We're working through that, right now. It's certainly important to be sort of strategic and thoughtful on how we do that with the right short-term, medium-term, and long-term priorities. At a very high level, we have what they need to scale the business. We've invested in a very strong technical sales force. We have over 30 field applications engineers plus the sales team. We've invested in these system design centers for electric vehicle and data center. Well, we've invested in the operations team, that can scale operations around the world, both the front end of fabs, but also the back end OSATs or assembly and test. We've invested in the management team, including in-house legal counsel, the addition of Ron Shelton, our CFO, so very professional seasoned management team. These are all the things GeneSiC didn't invest in.
That's why it's immediately profitable, immediately accretive, and immediately valuable to GeneSiC to allow them to scale to a whole new level and increase their acceleration. At a high level, it's a perfect add-on. It becomes a design center for our company that can immediately tap into all those same resources. With that said, we're all busy, so we have to be smart and thoughtful on how we balance GaN and silicon carbide. There's, you know, great synergy here and great opportunity to bring these two things together without any real overlap or inefficiency and certainly no redundancy.
Great. Thank you. Next question is around the IP for GeneSiC. How much of that is proprietary to GeneSiC or how much of that is from X-FAB? You can share a little bit about that.
Yeah. Also here again, you know, coincidentally, very similar to the TSMC situation. You can go to TSMC and get a standard MOSFET flow for GaN and nothing more. You can go to X-FAB to get a standard flow. These guys have gone in and significantly optimized the flow and the design that is completely proprietary to X-FAB. X-FAB just like TSMC, they are very sensitive to protecting customers' IP and making sure that's not available. They know about the patent portfolio. It's over 20 patents, issued or protected around that core transistor and how it's designed. If you know a little bit about silicon carbide, there are some people that make trench, some people make planar. This is what's called a trench-assisted planar design, very unique and novel in the industry. Nobody else has something like it, and that's the underlying capability.
They own that IP completely. We can take that IP to another fab and another one over time if it's warranted or necessary. It puts them in a very strong and well-protected position around that unique trench-assisted planar silicon carbide device.
Okay. Thank you. I think we, you know, get this question every quarter, and I think it is a good question. The question is usually around what your expectation for market segmentation in the coming years between consumer EV and solar.
Yeah. That's certainly changing in an exciting way. On the GaN side, I think we're on track or even a little bit ahead of schedule. Mobile, of course, is gonna continue to go from just 1% or 2% adoption. There's a lot of upside to go on mobile. Obviously, there's some China slowdown on the smartphone with their inventories. We think that'll bounce back in the next two- three quarters, certainly figuring that out. Taking that into consumer is already happening. We're going into TVs, desktop PCs, and others, that'll start ramping more significantly next year. Next year, we add in the GaN for servers. In 2024, we add in significant revenue for solar. In 2025, as we outlined, we add in significant revenue for EV.
Now, what we've got to do is roll into that the immediate two-three year acceleration of EV energy storage and solar shipments that are happening this year because of the GeneSiC acquisition. We're actually gonna be rolling that all together, doing an updated multiyear financial plan, and look to give some further updates, some kind of preliminary guidance for next year. We'll be able to give a little bit more of a breakdown or assessment of how that plays out. Clearly, we're gonna have a really immediately multi-market diversified business, which is gonna make us obviously a more robust, high-growth, high-margin company. If one market's down, two others are up. This one's down, another two are up.
That obviously is creating a diversity that will allow us to handle any sort of bumps or ups and down in the market as they naturally occur.
Fantastic. Yeah. I think there was recently some really good articles highlighting this change, not just within the power electronics space, but broadly across all the key semiconductor players. You know, if you look at folks like NVIDIA, even though today it's largely still graphics cards, you know, a lot of the investments that they've been making in automotive is what they hope can pay off. What a lot of people are highlighting is this diversity is gonna help smooth the traditional seasonality of the semiconductor space. I think that's a really interesting one to observe, right? We're all really familiar with whether it's storage or compute, the cyclicality.
I think as more of these players are transitioning into the industrial sector, into the automotive sector, this level of cyclicality should actually even out over time.
Yeah, I think that's very true. It's easy to say, well, everybody should be more diverse and serve multiple markets, but you have to be awfully careful. It's focus that leads to greatness. It's diversity that can lead to mediocrity.
It's a very tricky balance, and a dilution of your focus is what undermines your success, your customer intimacy, the deep value that you bring in a given application or market. You're either gonna have to buy that diversity for folks that have had intensive focus in those markets for a period of time, or you need to be awfully thoughtful. I think we're doing both. We bought it with GeneSiC giving immediate diversity for companies that focus for over a dozen years in those key markets, but we're also being really thoughtful on where we apply diversity. Power is a very big market. If you try to offer power devices to everything, you're definitely headed for mediocrity, and I would say.
Lack of success. I think it's easy to say you want the diversity, but I think your comments about the general market is certainly true, and we all welcome a little less cyclicality of semiconductors than we've had over the last 20 or 30 years. There's bound to be some balancing out as semiconductors are into everything. For when market's down, two others are up at a broader scale, as you described, Edward. I agree.
Yeah. Very good point on the focus. Okay. The very last question we have from the audience here is regarding margins from European Motor Company, whatever you can say about that. I'm also interested just broadly, you know, what your expectation for margins would be, selling into the motor space?
Yeah, definitely. We were pretty open last year and in our Q1 announcement and reinforced again in Q2, that last year when we decided to go for the business, it wasn't obvious. In retrospect, of course, we're happy we did because we did not have the optimized part for the product. We have a higher performance part. It was overkill, and we didn't have time to spin the part to meet their aggressive schedule. We decided, fine, we will go for it. We wanna get in with that customer. We wanna learn about that market and that application. In doing so, it's significantly below our target on an average gross margin. At the same time, we agreed with the customer that with time, we would spend a cost-optimized part and move to Gen Four, which is now happening.
In fact, we actually just sampled the customer on schedule. They're doing the evaluation. They're very supportive 'cause it was all agreed. It's actually gonna go from a well below margin business to an above average margin business as they ramp that new cost-optimized Gen Four chip. We're on schedule to start that production for that customer next quarter. It'll be a small contribution in next quarter and then start ramping significantly in Q1. We've got a very clear and, I think, robust plan to get that margin way up. I think it's indicative of it'll actually end up being better margin than our consumer and mobile business, which is kind of what you expect in the more industrial or even home appliance markets.
We've got a pipeline of customers behind that, as I said, that I think will feed that revenue and that margin profile further in that new market.
Great. I think speaking of 4th generation , I think it'd be valuable to the audience if you can give a quick refresher about what happens to your products generation- over -generation. This is one of the most important factors that triggered our investment into Navitas, is our belief that generation- over- generation you guys will get performance and cost improvements to the point where you're not only in parity with silicon alternatives, but you can actually be cheaper and higher performance. You know, our expectation is this, you know, as it sits today, $20 billion power electronics market, you know, GaN has been chipping away slowly at this space, even at a price premium.
Once it hits parity and even cheaper than silicon alternatives, this shift to GaN is gonna be a dramatic wave. I am very much looking forward to that transition.
Yeah. No, that's very well said. GaN and silicon carbide are really both very far away from their theoretical limits. GaN is obviously even more immature, you might say, or newer in its development, so we're moving at an extremely rapid pace. Of course, we're a very focused and innovative company. R&D is our lifeline. We're developing a new generation every year. Last year we started the year shipping 100% Gen Two. By the end of the year we were shipping 100% 3rd generation . This year we launched 4th generation on schedule, started sampling last quarter, initial early ramp-up this quarter, ramping even more with more customers, including that home appliance one, as I mentioned, starting next quarter. 4th generation will be a big driver next year.
We've got 5th generation and 6th generation in parallel development that are right on the heels of generation four. Each generation can take a different form. In general, they're proving to be around 20% cost performance improvement. But in some generations, like 3rd generation , we're adding all new layers of integration. 3rd generation added sensing, the ability to sense your own voltage current protecting that device. That was perfect, perfectly planned and perfect timing in making a more robust and reliable device as we bring this technology into high reliability markets like data center, solar, EV, and energy storage.
4th generation is more of a classic, 20% cost performance improvement without too many new features, but you're gonna see other layers of integration that take reliability to an even higher level with the Gen Four versions that we'll be applying to the higher power products. Right? They're things we're already sampling today. We just haven't publicly announced them. Later in the year we'll make public disclosure about that Gen Four, more details, as well as the Gen Four version going into high reliability, high power markets. It's super exciting. You know, I think silicon carbide in Gen Six has been moving at a similar pace of a generation every 12 or 18 months.
We hope to accelerate that, but then add those other layers of integration and value that we talked about and that Navitas is sort of famous for.
Great. Fantastic. I think part of that cost reduction is not only the power IC itself can get cheaper or your margins are getting higher, but also you're consolidating a lot of the other BOM components that would need to be there to support the traditional IC. Now all of that is getting rolled into your chip. Not only is that reducing costs, but I think we had some pretty good conversations before, you know, this consolidation. There's data proving the enhanced reliability by not having all these other parts.
Yeah. In fact, further color on the question about sort of manufacturing cost structure and fabless versus IDM, it's clear to us that design is the number one factor for cost reduction, far more important than wafer price. If you look at it, each generation, we're affecting the design, the cost structure in a significant way in three different ways. One, through design. We're shrinking the chip for a given performance. That obviously gives more die per wafer and a lower cost. Secondly, we're often integrating other circuits and components around the device for a fraction of the cost that they cost the customer previously. As you just referred to, saving their bill of material cost by integrating more of those components very cost effectively into GaN. Third, we're pushing the frequency higher and higher.
As the frequencies go higher, those passive components we don't talk about too much. In this call we didn't talk about it. Passive components are 50%-70% of the size, weight, and cost of most power systems. That's why they were so big and bulky and looked like they were designed in 1975, 'cause they kind of were. They haven't gotten much better. As we keep pushing the frequency higher, we keep shrinking the other parts of the BOM, which are the passive components. Design and design innovation has three different levels to driving the cost of the chip down through smaller size, driving the circuit cost around it by integration, and driving the passive cost down through higher frequencies.
That's a triple benefit if you're a really innovative, design-driven company like Navitas is on GaN, and we're certainly planning to accelerate the same sort of behaviors and opportunities on silicon carbide.
Great. We had one more question pop up, and I think it's a really good one, 'cause we didn't get to spend much time on VDD. Can you elaborate on what some of Navitas' plans are incorporating VDD into various applications both for GaN and silicon carbide? I think one of the audience members is speculating this combination of both silicon carbide and GaN and VDD together. I'm not sure if that's part of the plan, but any information you can share there would be great.
Yeah. You can actually, if you go down deeper, a lot of these power systems break down to two or more phases of power. The front end could be served by silicon carbide, which is facing the grid, and the grid has a lot of fluctuation, a lot of excess voltage and current. It's very important to have your most robust, reliable, proven technology on the front end facing the grid in that first phase. Some might argue silicon carbide, having been shipped for 15 years, is more proven, more reliable. GaN's the new kid on the block. We're doing an amazing job to make it reliable and to prove it, but out of caution, you could go with silicon carbide on the front end.
That next phase is effectively protected by the first phase, and that next phase, you want it to just be crazy fast and crazy efficient. Well, they're both better than silicon, but GaN is faster and more efficient actually than silicon carbide. This is not technically disputed in our industry. That, that's an interesting combination. What's cool about VDD is you need digital isolators in every phase, 'cause you have logic chips, and you have the power device, and you have to build in safety isolation circuits to protect the logic chips from the power devices. This could be up to six isolators, in some applications, up to 12 in bigger power systems. That's a lot of digital isolators. At $0.20-$1 can really add up.
Not only is it a critical function that's gotta create great isolation, now it's gotta support the high speeds of silicon carbide and GaN, exactly what VDD developed for us, and now we can go productize it either as a chipset for a total solution or as an integrated approach, like we said, sort of a smart, isolated GaN switch, a smart, isolated silicon carbide switch. Everything I just said fits identically to all the target markets we're talking about, server, solar, energy storage, electric vehicle. Might even have a play in mobile and consumer, but I think that'll take longer to sort of figure that out, and it's not as many components 'cause it's a much smaller, lower power scale device.
Perfect. Well, I think that can conclude our session today. These were some very fantastic questions. Thank you all for your time. It's very exciting to see both of these acquisitions roll into Navitas, aligning quite perfectly for the future that you guys have planned. You guys have been alluding for a while that you guys are not just the best GaN company. That's not the vision, but you guys wanna be the best in power electronics, and so these are exciting paths that you guys have paved to get to that end goal.
You know, I would like to ask our audience, and I think what this is kind of unique to the Taiwan session here, is that we have a lot of people joining that either have portfolio companies, investments, or even business units within their own CVCs, that might have some application, that's related to now both GaN and silicon carbide. If you can think that there are some opportunities within your portfolio or within your organization that can be pertinent to Navitas, I think it would be a great opportunity to reach out. As always, you guys have Stephen's contacts. We'll make sure that's also circulated, and you guys can reach out to him to get in touch with the folks at Navitas.
I think it'll be an interesting way to really connect a lot of these newer applications, especially with the Taiwanese ecosystem.
Yeah, that's well said, Edward, because GeneSiC, as I said, small team, no sales force, sold through distribution, so the brand awareness is surprisingly low. We're gonna immediately, starting next week, our Taiwan team will be trained and ready to go. We've got a great sales team, FAE application small center there, ready to go. We're ready to work with a lot of new opportunities to get that name out, get the word out, start sampling customers. We'd love to have any recommendations and suggestions to help build the Taiwan business. It's already off to a good start. They've got good revenue there, but I'm sure there's a lot more opportunity as we get engaged.
Yeah. While we're really excited in the U.S. that we had the CHIPS Act passed and the climate bill is in the process of being ratified, these two bills create a lot of momentum for what it basically intersects at what Navitas does, both on the chip side and on the climate impact side. This is not just the U.S. in isolation. Every country is crafting similar bills. We have portfolio companies within Mesh itself that are benefiting from some of this policy in Taiwan. I think a lot of the investors on the call know this far better than we do what types of policy is gonna drive additional adoption of these technologies both on GaN and silicon carbide.
It'll be really exciting to see how that makes its way into new business opportunities.
Yeah. No, you, well, obviously, we couldn't be more excited. There's this perfect storm coming together between CHIPS Act, which is gonna inevitably upgrade older silicon fabs to GaN and silicon carbide. Like we talked about, the Clean Energy Bill, if you break it down and look at that, it's actually the exact markets we're talking about. How do you accelerate EV adoption? How do you accelerate energy-efficient home appliances? How do you transition home appliances that are still gas-based to move to electricity-based, like heat pumps? All of these things are in that bill. How do you move to more renewable energy and solar? I mean, it's the definition of how do you accelerate Navitas' success in the market. We're super excited about it.
Great, yeah. We were seeing a lot of stuff in energy storage. You know, that's becoming a strong policy that Taiwan is pushing for. You know, I think the Taiwanese ecosystem does quite well in UPS as well, backup power. I think these are all exciting opportunities that plug into your new and improved product portfolio.
Yep, absolutely. Not to forget, of course, that Taiwan is dominant in notebook power supplies and server power supplies.
Mm-hmm.
Significant roles in solar, and then a fast-growing, you know, EV and energy storage market. This is a great fit for us, and we've got a great team, and we're just gonna keep investing and building that up.
Good. Well, very exciting. Thank you all for your time.
Thank you, Edward, for the opportunity. You always put in a great event with a great turnout and really good questions. Thank you so much, Edward, to all of you.
All right.
Thanks, everybody.
Bye.
Thank you.
Appreciate. Thank you. Bye-bye.