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Chip startup Navitas has a plan to make data centers more sustainable.
Its cofounder and CEO, Gene Sheridan, says gallium-nitride chips can cut electricity use.
But insiders said defects, knowledge gaps, and supply-chain issues hinder the shift to the new chips.
This article is part of “Enterprise Tech Blueprint,” a series exploring the strategies leading-edge companies use to innovate and grow.
Silicon chips are widely used to power smartphones, laptops, and other electronic devices. But more environmentally friendly chips are on the rise.
Gallium nitride, also known as GaN, is a chemical compound that combines a byproduct of aluminum called gallium with nitrogen. The chips can generate more power than silicon ones with the same amount of electricity in a much smaller form, according to Huili Grace Xing, a professor of electrical and computer engineering at Cornell University who researches GaN chips.
And companies want in on GaN. Navitas, a $1 billion startup, is seeking to disrupt the global semiconductor industry with the tech, Gene Sheridan, its CEO, told Insider. After spending decades working with silicon chips, Sheridan started Navitas to capitalize on an emerging technology he says has a multibillion-dollar market potential. But he said it’s been an uphill battle to convince electronics companies to replace silicon chips because of a lack of awareness and quality-control issues.
Navitas, based in California, says it has sent its designs to Taiwan Semiconductor Manufacturing Company, a semiconductor giant, to produce and ship more than 50 million GaN chips. The company, founded in 2014, raised more than $300 million before it went public in 2021.
Today, most of Navitas’ GaN chips can be found in phone and laptop chargers made by companies like Samsung, LG, Lenovo, and Dell. But Sheridan says the company wants to make its GaN chip a top choice to prevent data-server meltdowns that lead to service disruptions and the loss of hundreds of thousands of dollars. Data centers using these chips to cool their infrastructures may be able to cut carbon emissions because GaN chips use less energy than silicon.
“I think we can actually accelerate the world’s transition to more renewable energy,” Sheridan said.
Sheridan said it took him and his cofounder, Dan Kinzer, decades of research and development to land on a design for its chip, which now has over 150 patents. Sheridan said integrated circuits gave Navitas chips a competitive edge over GaN chips produced by competitors like Infineon, Texas Instruments, and Nvidia.
The market-research firm P&S Intelligence estimated that, as technology companies seek new ways to reduce their carbon footprints, the $5 billion GaN chip market could grow to $26 billion by 2030. But Sheridan said that GaN chips are prone to defects and face supply-chain issues and that manufacturers must deal with knowledge gaps about the technology.
Navitas approached the challenges by iterating on its product and educating its customers
While experts say GaN has the power to revolutionize the electronics industry, the compound isn’t new.
Academic researchers at universities in America and Japan began studying GaN in the 1990s. In 1993, the engineers Shuji Nakamura, Hiroshi Amano, and Isamu Akasaki used GaN to invent the blue LED, which transformed the lighting industry and spurred the commercialization of the compound.
But GaN was still prone to defects, making its application unpopular among electronic companies. Navitas decided to take a stab at perfecting the chips, but its designers and engineers struggled to make them work.
Because GaN chips are made of dissimilar materials, the electric currents may not flow properly. If the voltage is too low, the chip won’t turn on. But if the voltage is too high, it will blow a fuse.
“GaN is really fast and really efficient, which are great qualities, but extremely sensitive to how you turn them on and off,” Sheridan said.
Navitas said the usability of the GaN chips had been a roadblock, as electronic companies aren’t aware that the chips can work with their devices.
“The biggest challenge we had was an unawareness that high-speed components existed,” Stephen Oliver, a corporate vice president of marketing and investor relations at Navitas, told Insider. “You can’t drop a Ferrari engine into a Yugo chassis and expect the car to perform.” Oliver said he often has to educate customers about GaN’s usability.
Xing said that lack of awareness about the chips extends to academia. She said that while she tries to teach students about GaN, the coursework on electronic design at most schools, including hers, is overwhelmingly based on silicon.
“There’s still a large knowledge gap in our curriculum in terms of our electronic design,” Xing said. She added that Navitas often hires her students to research and build GaN chips because Cornell’s engineering department works GaN into its curriculum.
GaN chips are far from replacing silicon chips
While GaN chips have promise, silicon chips are dominant. Sheridan said manufacturers are stuck in the old ways of silicon chips and supply-chain disruptions have limited their availability.
“Semiconductor shortages have been driving our customers crazy,” Sheridan said.
He said that GaN chips must work with other chips and parts of the device to generate power, adding that companies are struggling to get these materials.
Oliver said that at chip giants like Intel, silicon is critical for handling low voltages in its graphics-processing units and memory chips.
And GaN chips are finicky — Xing said the GaN compound has a complex crystal structure that’s difficult to maintain and can easily break if manufacturers don’t properly deposit it on silicon wafer. The longer manufacturing process makes it more expensive.
Nonetheless, Navitas continues to grow. Earlier this month, it acquired the semiconductor firm GeneSic, a producer of a hard compound that combines silicon and carbon, for an undisclosed price; the acquisition helped boost its stock price. It says it has also invested in research and development to design GaN chips for bigger systems.
Sheridan said next year the company plans to roll out GaN-based data-center supplies, followed by solar-powered GaN chips the year after that, then GaN-powered electric vehicles by 2025. Navitas also plans to apply for funding from the new US chips law and is considering opening a manufacturing plant in the US.
“I think the world’s going to need a lot more manufacturing capacity for GaN chips given how huge this is going to be,” he said.