Hey guys. We'll start up again. You probably know after I've done 11 of these today, but I'm Joe Moore, Morgan Stanley Semiconductor Analyst. Very happy to have the executive team of Navitas, Gene Sheridan, CEO, and Janet Chou, CFO. So maybe if you guys could just start out. I mean, you come from a background in power discretes. You understand these markets well. And you kinda see these opportunities around new materials that you're pursuing. Can you just give us an overview of the strategy and, you know, at a high level, and then we can go into details from there?
Yeah, definitely. I've worked in power semis my whole life. It's all been silicon dominated for 30-40 years. I've seen the introduction and innovation of a disruptive new transistor called a silicon MOSFET back in the 1980s and 1990s, the last time we saw a major disruptive change. That led to all-new switching power supplies to replace linear regulators. Actually, a pretty exciting disruptive period back in the 1970s, 1980s, and 1990s when they started my career. Fast forward to today, similar developments going on: Gallium nitride and silicon carbide creating fast-switching MOSFETs that the world has never seen before, leading to extreme high-frequency power supplies that are creating a disruption in all of the markets. It's actually pretty amazing to see this kind of a repetition of history from 30-40 years ago.
Pretty fun that I got to start my career at the tail end of that last disruption and now be a big part of creating that disruption here with wide bandgap technologies.
Yeah. Yeah, good stuff. Maybe if we could talk a little bit about GaN. A lot of focus here. We've seen acquisitions from Infineon and Renesas of Transphorm, and GaN Systems recently. So, you know, obviously a lot of interest there. Can you talk about the main opportunities that you see in GaN short-term and long-term?
Yeah. And I think those acquisitions reflect the significance of what's going on, the disruptive nature. People are all sort of trying to make sure they're not at a position for these major growth drivers. I think what's especially big news is that power electronics is everywhere. So every major form of modern electronics obviously needs power, power conversion, power distribution. We started gallium nitride focused on mobile chargers, in a very thoughtful way as a fast-moving market with a simple value prop everybody could understand. And as a way to showcase improved to the world, GaN was ready for mainstream adoption. I think that worked really well just a few years ago. We're seeing that now blossom into mainstream adoption with 10 out of the top 10 mobile players already adopting our gallium nitride technology. But that's the tip of the iceberg.
Now we're going into every other major market. Gallium nitride is the perfect fit for what we call sort of low to medium power, up to about 20 kW. As you go up in power, silicon carbide has certain properties that makes it equally good but more suitable for the higher power and higher voltage. So we're really talking about disrupting a $20 billion market today. That it's headed as we electrify our planet, that $20 billion is gonna turn into $30 billion, $40 billion, $50 billion as we electrify more of these applications, taking advantage, again, of GaN and silicon carbide-efficient power chips.
Great. Maybe we could talk about some of those dynamics, starting with the smartphone piece. You know, you talked about the design win progress that you've had there. Can you talk about the growth that you might see, the growth and penetration of fast chargers, and how much of a driver that is for you guys?
Yeah, it's a great example. We talk about GaN and silicon carbide being both displacement technologies of existing electrified markets. Obviously, smartphones, the IT market in general is fully electrified, right? We're not using gas or fossil fuels to power data centers directly or to power the phones. But even in markets that are flat, smartphones are a good one. Pretty flat market last year, small growth this year. We saw pretty explosive growth last year. And that's because some of the major players went from a relatively low adoption of 5% or 10% of GaN in their chargers to 20%-30% projected. Xiaomi and OPPO, in particular, targeting 30% charger adoption using GaN this year. So even in a flat market, by displacing silicon, we can drive some really nice growth trajectories. We've seen that in mobile.
We expect the same thing to happen here soon in data centers, especially with what is happening with AI data centers.
Mm-hmm. Can you talk about the competitive dynamics? You know, you talked about being in the high end of the market, lower power solutions in GaN. You know, do you see any competitive encroachment in the territories where you're strong?
Yeah. What's been a real challenge for GaN. GaN's kind of the new kid on the block. Silicon carbide has been around for 15 years. It's matured to now almost a $4 billion market. GaN is the new technology. It's been limited because of an Achilles heel. They're very hard to drive them correctly. It needs a very precise voltage to turn it on. It wants to switch very fast. So it needs to be both precise and very perfect timing, no latency, no delay. To do that, most companies use an external silicon driver. Silicon drivers add cost. They only switch as fast as silicon, not as fast as GaN. They don't deliver the precision and speed you really need.
Mm-hmm.
Navitas invented a GaN-integrated circuit where we integrated the driver directly on the chip. With monolithic integration, we deliver the precise voltage with zero delay. Once we did this for mobile chargers, the market took off, as we described, in the next few years. For the first time, we're bringing that GaN IC with that integrated driver and a whole lot more protection circuits into high-reliability, high-performance markets like data center, solar, and EV. We're just in the forefront now of starting that sampling and seeing those customers start to ramp in the next 12-24 months.
Okay. You mentioned AI and data center. There's a little bit of enthusiasm around that topic. Can you talk a little bit about the, you know, the applications that you're serving there?
Yeah. So we're in the AC to DC power supply. There's a couple of stages to a data center. Grid power connects up to the data center. You need to convert the AC to low-voltage DC. That's the piece that we're delivering on today. There's a next stage, which we'll address down the road, of DC to DC converters. So our high-voltage GaN ICs are a perfect fit to upgrade those AC to DC power supplies to be dramatically higher power density and also improved energy efficiency. The cost to power the data center is the number one cost to operate the data center. So every point in energy efficiency is a big deal. This is what gallium nitride can bring. But also power density. You think of a data center as pretty big, a lot of room to pack this power in.
There are fixed rack form factors that haven't changed for 30 years. We need to go from packing 1,000 watts per server power supply to 3,000 to 5,000, even 10,000. Silicon cannot pack this power in. Navitas and GaN ICs can triple the power density or more over time. It's coming and rolling out in the data center. It's right at the same time AI's coming along asking for processors to go from 100 amps to 1,000 amps to 2,000 amps to even higher. That's going to ripple through the whole data center and change what it takes to deliver these AC to DC power supplies. So we're only tip of the iceberg. We just launched the GaNSafe technology that targets data centers last quarter.
We've got 20 customers in development that'll launch throughout this year and just the very beginning of revenue, $3 million-$5 million expected second half of this year. So we're just coming out of the gates to address this AI data center power challenge.
Okay. Any sense for how big that opportunity can be as you ramp to scale?
We even before the AI developments of last year, we estimated the total TAM to be about $1 billion, of course, all using silicon.
Yeah.
So we're already looking at this as a billion-dollar opportunity that we can drive tens and eventually hundreds of millions. The AI effect, frankly, we don't fully know yet. It's too early. We're still trying to get a handle on it and understanding, you know, NVIDIA and others, what their power roadmap is and translating that back to what are likely much bigger numbers.
Yeah. I mean, power is obviously an incredible bottleneck for those guys. And it appears to be a bottleneck that isn't growing as quickly as even GPU supply is to some degree.
That's right. I think Elon Musk just last week said, you know, semiconductors are the big shortage. He now predicts power supplies and step-down transformers to be the next big shortage because you're trying to go from grid power, very high voltage, stepping that all the way down to power these incredibly power-hungry low-voltage processors. He thinks that's gonna be the next problem. And then after that, it's gonna be electricity of the grid itself not handling it. So power, we're right, we're in the right place at the right time to go contribute to this, fixing this problem.
Yeah. Can you talk about automotive applications for GaN, you know, when you start to see, you know, adoption and what, what the first applications that you'll be addressing?
Yeah. Right now, silicon carbide is a big market, as I said, $4 billion. About 75% of that is all in EV and specifically the electric motor.
Yeah.
Gets a lot of attention. Tesla buys something like $1 billion just themselves. It's a big deal. We're one of the small players. So we're actually not focused on EV traction. We're focused on EV onboard charger, a smaller but very sizable opportunity. We've got a whole design center that designs the entire onboard charger wrapped around our gallium nitride or a silicon carbide chip. So we really like the onboard charger. It's a great way to enter that market. We're already shipping today with silicon carbide into onboard chargers. EV with GaN will be shipping in onboard chargers next year. And then we really like roadside chargers. That infrastructure, we all know, is a fraction of what it needs to be.
Mm-hmm.
Over the coming years that uses a very high percentage of silicon carbide chips. And we've got a unique position of high-voltage, high-efficiency silicon carbide that's a perfect fit for the roadside chargers.
Okay. Maybe, like, starting to segue to silicon carbide, but where do you see that line crossing when you sort of think about onboard chargers, GaN versus silicon, those kinds of things?
Yeah. The simplest way, GaN, silicon carbide is better at higher voltages, 1,000 volts and up, 20,000 watts and up. GaN is better below those levels. So if you think about an EV, if you have a 400-volt battery, GaN can be a perfect fit for charging that and discharging that battery because it's 650-volt GaN, which is a nice, design margin for the 400-volt batteries. There is a trend to 800-volt batteries. At that point, the 650-volt GaN is not adequate. 1,200-volt silicon carbide is a perfect fit. The beautiful thing about Navitas, we're the only company in the world that has both leading-edge GaN, leading-edge silicon carbide without the distraction or dilution of traditional silicon power devices. So whatever way the customer wants to go, 400-volt battery, 800-volt battery, we can deliver the right onboard charger solution.
Mm-hmm. Okay. Great. Maybe if we transition to silicon carbide and you talk about, you know, sort of the unique approach that you guys have in that market.
Yeah. We acquired a company called GeneSiC in August of 2022. So we had a full year of excellent ramp-up. And that was a small team of only 20 engineers that created really industry-leading technology that was a well-kept secret that we're happy to let the world know about now. That technology's called trench-assisted planar. In the world of silicon carbide, there's sort of two camps: trench versions and planar. Planar's considered to be not as high a performance but more manufacturable, more low-cost, more robust. Trench gives you the performance but usually means more expensive, more challenging in yields. Our trench-assisted planar gives you the benefit of both worlds. It has trench-like performance but what with planar-type manufacturability, yield, and cost. So it's a really attractive cost-performance equation that's helping to drive major big market share gains for us in the markets we talked about.
Okay. Great. You know, can you talk about then what, what markets that does enable you to address? You sort of talked about, not focusing on the biggest maybe piece of that market. But, you know, what, what opportunities does that give you a, an edge, when you're pursuing with GeneSiC technology?
Yeah. Mainly, it's high-temperature, high-frequency switching. So there are certain applications, like motors, for example, an electric motor. You're gonna operate at lower frequencies. You won't see as big a benefit. We just launched Generation 3 GaNFast, which makes the technology even faster for fast-switching circuits. Onboard chargers is a switching power supply. It's a perfect example of where you wanna take the benefit of high-frequency silicon carbide or GaN, push that switching frequency up. As you do that, it means you deliver more power and smaller size, lighter weight, and lower-cost OBC onboard charger systems, which ultimately means faster charging for the cars. And we all know driving range is one big limitation for EV. Fast charging is another big driver. So that's a big focus for us. And our technology fits nicely there.
Okay. Maybe talk about the EV market a little bit, given how important that is for you. You know, the U.S. sentiment has soured a little bit on EV as a, you know, our automotive team is particularly negative. But we also see a lot of momentum in China, where I know you guys are actively engaged with customers. It certainly seems like this is a long-term direction that will persist. Can you just talk to, you know, are you still seeing the same rate of investment in these EV technologies across all the OEMs, or has it started to consolidate?
Yeah. No, we've certainly felt some slowdown in the market. People are talking about 50% growth, now 30%, maybe even 20%. But the key is it's still growing. I think you do need to move from the high-performance segment into the mainstream segment. Tesla's very clear about that, as are others.
Mm-hmm.
I think our technology actually can save cost. If you can improve the energy savings by five points, it could mean 5% less expensive batteries for the same range, as an example. So we can actually be a benefit to drive, to, to address those adoption barriers, whether it's driving range concern, the cost premium that comes from the battery, or the faster charging. So I think we gotta just keep working away at these adoption hurdles that are gonna unlock this sort of next wave of EV growth.
Mm-hmm. Okay. How are you seeing the design activity in China? Is that focused on a wide range of capabilities, low-end, high-end? And, you know, how are you positioned to take advantage of that?
Broadly or EV specifically?
EV specifically.
Yeah. So we, we actually have a system design center. Another part of our unique go-to-market is these system design centers. We're not just providing chips and good application support. We're actually doing full system designs. We're doing that for the data center power supplies. We're doing it for mobile chargers. And we're doing it in EV for the onboard chargers. That EV onboard charger design center's actually in Shanghai. We've, co-worked with many customers to accelerate their adoption of silicon carbide and now GaN-based onboard chargers. We announced a joint venture, a joint design center with Geely last year that created a new silicon carbide business estimated to be $15 million-$20 million as it ramped. Just last week, we announced a second joint design center with Shinry, which is one of the top 10 OBC suppliers that'll be adopting our technology and co-working with our system.
So the system design centers, I think, help to accelerate the market and also get the maximum performance and cost benefits out of gallium nitride or silicon carbide in each of these target markets. So it's been a strong point for us in an otherwise, you know, not-so-strong China growth market. Xiaomi and OPPO and the mobile chargers, like we talked about, another good example. Even in flat markets or less growth markets, we can still shine through with some good growth numbers.
Okay. Great. Can you talk about opportunities in solar? I know you have a lot of good long-term opportunities there. It's been a market that's been a little choppy near term. But can you talk about those dynamics?
Yeah. Definitely felt it last year with the high interest rates, slowed down the growth rates. So, you know, everybody's facing some decent headwinds in overall macro trends. In our case, though, again, it's a displacement technology. So we continue to replace silicon MOSFETs or IGBTs with silicon carbide or GaN. We're shipping silicon carbide today into string inverters. The numbers are down, but we actually see our pipeline growing stronger than ever. So I think that's a good sign for solar recovery later this year and into next year. It's also a big year for us because gallium nitride is going into solar microinverters for the first time at the end of this year and will drive significant revenues next year. So then we'll be sort of firing on all cylinders, into the solar market with both GaN and silicon carbide.
Okay. Great. I wonder if maybe we could talk going back to automotive. You know, the design cycles in automotive are notoriously long. You know that from the International Rectifier days. But there's a lot of innovation now. And I feel like, in some ways, it's accelerating the design cycles. I think you've given some, some data points on kind of 12-month ramp from design to production win, which is remarkably quick. Can you just talk about the innovation that we're seeing in autos and whether, you know, how that's opening up opportunities for you?
Yeah. And I think that particular one was actually the Geely design win that I mentioned earlier.
Mm-hmm.
We had created our system design center, had complete OBC capabilities, signed a joint design center approach with Geely, who had already started the program. So we caught it when it was already six months in.
Mm-hmm.
And then with our system design team, we could accelerate their design, not only moving their adoption to our silicon carbide but accelerate their launch in, as you said, just 12 months. So that one was pretty extraordinary. But so I think between our own system design centers, we can accelerate market adoption in the ways I described. I also think you're gonna see more a modular approach to EV. At the end of the day, electric vehicles are largely batteries and power electronics. And as you can build up modules that can be scaled into different power levels, different electric motor versions, different onboard chargers, different batteries, I think you're gonna, gonna see a sort of a plug-and-play, more modular approach to EV that will dramatically reduce EV time to market. And I think that's already happening. It's down to three years, probably, on average.
We're seeing others go shorter.
Great. And then I mentioned upfront, you know, the acquisitions that a couple of, you know, the GeneSiC and Infineon, did to kinda get these GaN capabilities. Obviously, that speaks to the opportunities that you're talking to. But, you know, can you talk about the competition that you may see from those and anything integration-wise that you see from those?
Yeah. We haven't seen the competitive landscape change much, somewhat surprisingly, maybe other than some acquisitions. And that effectively turns two competitors into one, distracts them a little bit while they work on that, integration. It hasn't changed too much. It's very different between our GaN position and our silicon carbide position. silicon carbide, it's a more mature market. We're a smaller player gaining share with better technology and a nimble and fast-moving approach. Gallium nitride, we're the market and technology leader, pioneering new markets like we did first with mobile charger, bringing that technology into all new markets like we talked about with data center, solar at the end of this year, and EV next year. So I think the competitive landscape hasn't changed too much. And our focus is really not on the competition but just on unlocking that next layer of value in each of the markets.
Yeah. Okay. Great. Maybe we could talk about financials a little bit, starting with revenue. On your last earnings call, you did guide down sequentially. But you talked about a recovery in the second half. You talked about growth drivers for 2025. Can you just put into context any of the, the, the shorter-term issues around Q1?
Yeah. I'll give kinda the market update. Certainly, Janet can jump in. But we finished a fantastic year, up 100% year-over-year in Q4, up 100% year-over-year for 2023 to 2024, even with a sequential guide down. And, of course, Q1 is normally seasonally a little softer.
Mm-hmm.
Still 70% up year-on-year from Q1 of the prior year. So very strong in an otherwise pretty choppy market, also guiding to 40%-50% full-year growth. That's despite first half being generally a bit slower than we would have expected with some of the slowdown in EV and industrial.
Okay. You know, it seems like the growth numbers are really good. They've come down a little bit, you know, since we initiated. And, you know, we have maybe you could just talk to, you know, what are the factors that are you know, obviously, you're very feel very good about the pipeline that you have. What are the factors macro-wise that you guys are feeling? You know, we talked a little bit about solar. Anything else that we should know?
Yeah. In December, we announced a pipeline. In total, that's $1.25 billion. That continues to grow. It's very regionally and market diverse. Mobile and consumer is now down to 42% of the total last year and a smaller percentage of that in the total pipeline. So we see strong promise and opportunity in mobile, where we started with GaN, but equally, if not stronger, opportunities as we bring GaN or silicon carbide into these markets we touched on. So AI data center, big driver, just starting out this year. GaN and silicon carbide now growing into solar this year and energy storage. GaN is actually another big win in appliance, another thing we highlighted. Home appliances, making home appliances more energy efficient, more powerful, and higher-density designs. And then silicon carbide going into more industrial applications. So it's actually there's good growth drivers in each of these areas.
We highlighted four major growth drivers that I just touched on that are driving much of the second half growth. So despite the headwinds, as we talk about on displacement technology, even if markets are flat, while we're not immune to any headwinds or slowdowns in the market, it positions us well to keep gaining share and really moving from silicon over to GaN and silicon carbide to drive growth.
Great. And at the end, Investor Day, you sort of gave targets of 6-10x the growth of the power market. Can you talk about, you know, why frame it that way? You know, and just give us the sort of underlying math behind that kind of growth.
Yeah. We actually just finished our third year of doubling revenue. 100% growth is pretty amazing, pretty hard to do three years in a row. We got recognized by Deloitte for two years in a row of being the fastest tech company in North America, recognizing that growth. But we had to transition. Obviously, as you get to a bigger scale, growing the same percentage is not gonna be easy. So we had to figure out what's the right way to guide the growth, the extraordinary growth that we have in front of us, while recognizing 100% as you grow that base is not gonna be possible. At the end, we also need to realize we're a semiconductor company. We might have some ups and downs in the cycles, as we all know.
Mm-hmm.
We're not gonna be immune to that. Things are gonna be up some years. They're gonna be down some years. The key for us is that we're constantly outperforming the general semiconductor market in a significant way. And so that's how we sort of settled on, obviously, 6-10x faster than the general power semiconductor market is heads and shoulders above any sort of market rate you might expect out there. And it means we could ebb and flow a little bit as well with the market, but it's still gonna significantly outperform the overall market.
Mm-hmm. Okay. Great. And then.
Yeah.
Maybe for Janet, you know, the long-term progress, you know, you've talked about a target of 50% gross margin.
Yep.
20% operating margin. Can you talk about the path from where we are now to get to those numbers?
Well, if you look at our technology, we're in the market leadership position. There are three drivers to enhance gross margin. First is continuous innovation, the new NPIs. And second driver is, you know, diversification strategy. A couple of years ago, if you look at 2021, pretty much 100% of our products are sold into mobile. Now, that percentage has dropped to a little over 40%. So we are moving pretty well on that trajectory. And once demand picks up in solar, in EV, or in other high-margin markets, I think the margin that will be a strong tailwind to margin. And lastly, we're gonna continue to make some strategic investment, manufacturing investments. For example, consignment or equity ownership, we keep our option open. If you put all in together, I think we feel very comfortable with 50% gross margin target. We're moving into that direction.
Okay. Great. And then acquisitions. I mean, you've, you've talked about GeneSiC. How do you think about that going forward? Do you are there capabilities that you need to fill out the portfolio? Are there opportunistic things that you might look at?
Yeah. We certainly feel good that we've filled in kind of key gaps or building blocks we wanted, being the only pure-play next-gen company with both GaN and silicon carbide is foundational, obviously, and unique. We've wrapped around that silicon controllers, drivers, and isolators that are complementary silicon chips that work well and get more out of GaN and silicon carbide. And another growth area as we go into higher power is the packaging. You start to put these chips into new packages, power modules. So you're gonna see a lot of that organically. But I think all those pieces of the puzzle are really in place. So I don't see any gaps. I think we got exactly the building blocks we want to be that next-generation power semiconductor leader. With that said, we'll look strategically and opportunistically.
Could there be something more in GaN, more in silicon carbide, more in these, auxiliary silicon chips, or in the packaging? Possibly. But I don't see any pressing need to do it. So we'll be more opportunistic if it fits our vision to accelerate that, that plan to be the next-generation power leader.
Okay. Great. Let me see if we have any questions for the audience. Wait for the mic.
Hi. I just wanted to ask you that where do you source your wafers from, the silicon carbide wafers? And have you considered Chinese suppliers as well?
Yeah. Good question. Silicon carbide's a complicated supply chain. You start with substrates, silicon carbide substrates. You go silicon carbide epi. And then you run it through a silicon carbide fab for processing. And then you do the back-end packaging. So it's got four pieces to it. Each of them have their own challenges. Each of them have had a lot of shortages in the last couple of years. I mentioned we have trench-assisted planar that gives us not only the trench-like performance but really robust manufacturing. As an example, it allows us to mix and match different substrate suppliers with different epi suppliers and then run that different combination through X-FAB, our partner, with great yields. Most people have to kinda really narrow and tune what's the substrate that works with the epi, that works with the fab.
In our case, we have over a dozen combinations that are either qualified or getting qualified. So the long-winded answer is, yes, we, we actually buy from a number of different substrates. It includes some Chinese. So those are getting better and better. And we're, we're happy to mix and match where we get the best price and delivery with those great yields. And I'll add that last year, last January, we signed a three-year agreement for 500% capacity expansion with X-FAB that includes the substrates and epi. And that's allowed us to grow significantly last year. And I'm happy to report that this year, we finally we were shipping everything we could. And this year, we finally see demand and supply kind of in balance.
So I think we're really benefiting from that, that three-year deal, that 500% increase, and all that flexibility we have in our supply chain at the substrate and epi level.
Do you see a glut in the silicon carbide market anytime soon? Because we've seen a lot of supply ramping up in that market.
Yeah. It's hard to predict. There's certainly been big investments. A lot of the investments are long-term. They take multiple years. So it's pretty hard to predict exactly when how much, you know, capacity comes on. Certainly, the market's slowing down a little bit with EV slowing down a little bit. Everybody investing to ramp up. We're a good example of that. I feel like now we're at a good supply and demand balance, not an imbalance. What comes in 2025 and 2026 is gonna be a little bit harder to predict. Depends on the market. Depends on how fast bring on people bring on other capacity. But I think this year, it's, it's finally a more balanced supply and demand picture.
If it is an oversupply market, is that bad for you? I mean, it seems like 'cause it's that does reflect your cost inputs and things like that as well.
That's right.
Could be a problem.
Well, with our fabless model, we really benefit. We can flex. If you're sitting on your own fab and all of a sudden, there's an overcapacity, you've got a fixed cost. You have to deal with it. Now, X-FAB has to deal with that too. But at least they're spreading it over lots of other customers to get better loading versus having your own fab for only your internal purpose. So I think the fabless model helps the ebbs and flows a lot better than if you're sitting on your own fab and you get a glut or a downturn.
Yeah. Can you talk about your shift from 100% mobile in 2021 to 40%? And, in those new domains you entered, what was who did you compete with? And why did you win?
Yeah.
What challenges did you face in trying to break into those markets?
Yeah. Definitely. And that, you know, I think, there's two answers to that. Expanding GaN, expanding GaN into new markets, and then acquiring silicon carbide, which immediately expanded us into new markets. So about 18-24 months ago, we expanded GaN into the home appliance market. That's a pretty big shift, actually, 'cause all the other applications I'm talking about are power supplies, powering other electronics, powering other chips. In the appliance market, we're actually powering motors. About 40% of the world's power electronics is actually powering motors. They're called inverters. And it's pretty exciting to open up that new market. So to your question, we had to really tune our GaN ICs in each of these applications. And this is pretty fundamental to our go-to-market strategy. It's a thoughtful market strategy, an application-specific strategy. And we tune each GaN IC specifically to that application.
We did that extremely well with mobile chargers. We've now created motor-optimized GaNSense half-bridges. I spoke about these in our earnings call last week. That allows you to operate the motor at 10 times, 20 times higher frequency. What's cool about motors is not only do I make the power electronics smaller, more efficient, ultimately lower cost, I can actually shrink the size, weighted cost of the motor itself. That's like me making the processor more efficient than what I'm powering in a power supply. It's very hard for a power supply to make the thing it's powering actually better, cheaper, more efficient. This is just the tip of the iceberg. That's why I was really excited to announce another major appliance win that uses this motor, motor-optimized generation for GaNSense half-bridge, our most optimized or most advanced integrated GaN IC.
That application is pushing the frequencies very high. You're gonna see, I think, the whole world take notice when they open up and reverse engineer these products when they come out at the end of this year or the next year to see what GaN can do to drive high-frequency motors and change. Motors are not just you think about motors for moving things physically, like moving a car or robotics or factory automation. Motors are in fans, compressors, moving water, cooling things, cooling, cooling, water and air, heating and cooling your house. Motors are everywhere. As I said, about 40% of power electronics. So it's a really good example of how to study the application, tune the product. When you do, you can open up a whole new wave of applications.
We're really at the very tip of the iceberg on this motor potential and this appliance potential.
How about the competition you encountered along the way?
Yeah. Mostly, it's silicon. You know, GaN is still the new kid on the block. It's a pretty small market. It's a few hundred million at the most, $200 million-$300 million. So as much as there's some GaN competitors, really, we're focused on silicon as the incumbent. That's the 800-pound gorilla. And silicon is not that tough of a competition if you push the frequencies higher as GaN is doing and as silicon carbide can do. And once you make that shift, there's no going back. Nobody's gonna redesign to higher-frequency motors. And then silicon just disappears as your competition. You're not gonna design it back to lower frequency and give up all those gains. So it's really about understanding the application and understanding how to unlock all new value that comes from high-frequency, high-efficiency, you know, compound semiconductors in the case of GaN and silicon carbide. Yeah.
Thank you for your question.
Any other questions? We'll wrap it up there. Gene, Janet, thank you very much.
Cool.
Thank you.
Thank you, Joe. Thanks, everyone. Thank you. Thanks, Joe.