GaN upstarts "targeted" by energy giants

Zhu Gongshan is the founder and executive director of GCL Technology Holdings Co., Ltd. He is known as the "King of New Energy in China" and the "King of Silicon in the World" and has led GCL all the way from photovoltaics to new energy. So, as the third generation of semiconductors is booming, what kind of sparks will the combination of such an energy giant and the gallium nitride (GaN) upstart create? Can the effect of 1+1>2 be achieved?

Penetration of GaN devices in different application fields

Source: Yole

Hongguang Semiconductor’s announcement shows: The group directors unanimously believe that Mr. Zhu Gongshan’s share subscription and warrant subscription are a good opportunity, allowing Hongguang Semiconductor to raise additional funds for the development of GaN business, thereby maximizing the group’s income. As we all know, the semiconductor industry is very "burning money", especially the chip manufacturing industry, which is known as the "gold-eating beast". Even so, Hongguang Semiconductor's goal is still to become an industry-leading IDM company that produces integrated semiconductor equipment for the entire industry chain.

What is IDM? It is an operating model that integrates R&D, manufacturing, packaging, testing and sales. At present, leading third-generation semiconductor companies such as GaN basically adopt the IDM model. The analysis reasons mainly include the following two aspects: First, compared with the mature silicon-based market, the database and chip technology between GaN foundries It is not yet mature enough. Holding chip manufacturing rights in your own hands can greatly avoid the uneven quality of manufactured chip products. Second, the IDM model can enhance the competitiveness of enterprises in many aspects, such as stable production capacity supply, short-term delivery cycle, stronger adaptability of design and production capabilities, faster product iteration, etc.

IDM mode

Source: China Consulting Network

But IDM also has an obvious shortcoming, that is, the initial cost is too expensive. As the saying goes, "You can't catch the wolf if you don't want to give up your children." For Hongguang Semiconductor, which has set "big goals", in order to enhance its technical strength and ensure production capacity supply, a large amount of capital investment in the early stage is a necessary process. Hongguang Semiconductor was founded in 2010, formerly known as Hongguang Lighting Holdings Co., Ltd. Due to its optimism about the long-term application needs of the semiconductor industry, from 2021, Hongguang Semiconductor began to fully accelerate the layout of the GaN field in the third-generation semiconductor industry, and in just a short time A series of acquisitions and factory construction measures were taken within two or three years.

In terms of GaN factory construction, Hongguang Semiconductor selected a new factory in Xuzhou, Jiangsu Province. In addition to installing two production lines for GaN-related products, the new factory also has a 7,000 square meter clean room and an 850 square meter office area. It is reported that Hongguang Semiconductor's Xuzhou factory has begun producing 6-inch GaN power device epitaxial wafers, and related machines and production equipment for manufacturing GaN chips are also in the procurement stage. It is expected that trial production of chips will begin in the second quarter of 2023, and full production will be launched in early 2024. .

In terms of GaN technology research and development, Hongguang Semiconductor invested in two world-renowned GaN research and development companies last year, namely VisIC Technologies Limited in Israel and GaN Systems Inc. in Canada. Both companies have profound technology accumulation in the GaN field. , and decades of experience in GaN products, among which VisIC also received investment from MediaTek in 2020. In addition to external investment, Hongguang Semiconductor is also actively cultivating "internal strength" and increasing investment in research and development.

VisIC Technologies Limited Investors

Source: VisIC

In order to further enhance its GaN business capabilities, Hongguang Semiconductor also hired Dr. Chen Zhen, a core expert in GaN semiconductor business, and Dr. Thomas Hu, a core expert in GaN HEMT device design and process manufacturing, as well as those with rich experience in the semiconductor industry and foundry technology and management. Mr. Lu Ruilin and Mr. Min Junhui joined the R&D team, and also set up a R&D center in Shenzhen to strengthen the design and production of materials and devices.

Under the "both internal and external" approach, Hongguang Semiconductor's GaN technology reserves continue to improve, and GaN-related fast charging products have been launched in the second half of this year. The funds brought by Zhu Gongshan's joining will also be used by Hongguang Semiconductor to upgrade GaN equipment and third-generation An important promoter of semiconductor product R&D capabilities.

Of course, what Zhu Gongshan can bring to Hongguang Semiconductor is far more than just capital support. The value of wisdom, connections, resources, and markets behind it is even greater.

Take Hongguang Semiconductor's Xuzhou factory as an example. Zhu Gongshan himself has an indissoluble bond with Xuzhou. Every major strategic layout of GCL Group is rooted in Xuzhou, from Peixian County, Fengxian County, to Xuzhou Economic and Technological Development Zone, GCL The group has invested 57 billion yuan in fixed assets in Xuzhou, and Zhu Gongshan has also accumulated rich connections. There is no doubt that after becoming the main strategic shareholder of Hongguang Semiconductor, Zhu Gongshan's strong network resources will provide great convenience for Hongguang Semiconductor's future production capacity expansion.

GCL Group was listed on the Hong Kong Stock Exchange in November 2007. It relied on its technological advantages of independent innovation to break the half-century monopoly of Europe and the United States in the global polysilicon market. It has been ranked among the top 500 new energy companies in the world and China's new energy company for many consecutive years. Top 500 energy companies, top 500 Chinese companies, and top 500 Chinese private companies. In the first half of this year, GCL Group achieved revenue of 15.326 billion yuan, a year-on-year increase of 74.1%, and net profit attributable to the parent company of 6.909 billion yuan, a year-on-year increase of 187.1%.

After years of development from electricity, photovoltaics to semiconductors and hydrogen energy, GCL Group has drawn up a comprehensive new energy blueprint. As a representative material in the third generation of semiconductors, GaN has a large bandgap, high breakdown voltage, thermal With the advantages of large conductivity, high switching frequency, and strong radiation resistance, it is believed that its application scope in the new energy industry will become wider and wider. By that time, the "new energy giant ship" of GCL Group will provide Hongguang Semiconductor with Bring great market opportunities.

GCL Group Industrial Distribution

Source: GCL Group

On the other hand, Hongguang Semiconductor will in turn further improve GCL’s product performance. For example, in terms of energy efficiency, Hongguang Semiconductor has demonstrated the huge advantages of GaN in improving data center efficiency and profitability. In March this year, Xuzhou Jinshajiang Semiconductor Co., Ltd., a wholly-owned subsidiary of Hongguang Semiconductor, conducted the first public industry field test of gallium nitride in Internet data center power infrastructure with GaN Systems. The experimental results showed that compared with traditional silicon-based power semiconductors, The energy efficiency of the new power supply is as high as 98% at 50% load, which can reduce the total energy consumption of the Internet data center by 10%. It can not only increase the profit margin of the Internet data center, but also reduce operating costs and energy consumption.

Judging from the current economic environment, green economy is not only a general trend, but also a top priority for future development. Jim Witham, CEO of GaN Systems, has pointed out that GaN is inherently green because the energy required to make a GaN transistor is much less (10 or 20 times less) than the energy required to make a SiC transistor. For the GCL Group, which insists on driving corporate innovation and development with green energy technology, GaN chips are a good choice to create a new "Technology GCL", "Digital GCL" and "Green GCL".

It is worth mentioning that as a company that has been ranked among the top 500 global new energy companies for many years and has more than 60 production bases, GCL Group has relied on its advantages in technology, factory construction, and corporate management over the years. It can also provide a lot of assistance to the development of Hongguang Semiconductor. As early as 2003, Suzhou Daily commented on the GCL Taicang Environmental Protection Power Plant, saying that not even a wisp of black smoke could be seen in the 210-meter-high chimney of the power plant standing on the Yangtze River. It is reported that in order to reduce factory pollution, GCL has adopted various measures such as utilizing fly ash waste, installing desulfurization devices, and treating sewage twice. These are rare experiences for Hongguang Semiconductor, which also has factories. conducive to future development.

After the resolution of the extraordinary general meeting of shareholders is passed, it is believed that GCL Group will also launch a series of close cooperation with Hongguang Semiconductor. The group announcement pointed out that GCL Group and Hongguang Semiconductor will work closely to focus on the application of GaN power chips in the new energy field, including: (i) GCL Group will invest in the equity of Hongguang Semiconductor or Hongguang Semiconductor's subsidiaries, and the two parties will establish in-depth cooperation; (ii) GCL Group and Hongguang Semiconductor will establish a new energy joint venture in China to deploy GaN chips in the new energy field, including but not limited to charging/power swapping technology and equipment, energy storage technology and related facilities, distributed photovoltaic inverter inverters, etc.; (iii) Hongguang Semiconductor will provide technical support to GCL Group and jointly develop application products based on silicon-based power chips and third-generation semiconductors; (iv) GCL Group will, based on its leading position in the new energy industry and The comprehensive layout will help Hongguang Semiconductor and its joint venture companies enter the new energy industry supply chain market.

To sum up, after Zhu Gongshan became the main strategic shareholder of Hongguang Semiconductor, a win-win situation for both parties is taking shape. This cooperation will allow Hongguang Semiconductor to be fully prepared in terms of capital, technology, production capacity, etc., and wait with "thick accumulation" The "thin hair" moment.

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