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Infineon sharpens edge in GaN, SiC with IR

22 Aug 2014  | Junko Yoshida, Ismini Scouras

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Infineon Technologies AG is making its biggest buyout ever, offering $3 billion in cash for California-based International Rectifier.

The German chip company is best known for its automotive chips, and this acquisition deal will reposition Infineon as a comprehensive provider in the market for silicon-, silicon-carbide-, and gallium-nitride-based power devices and integrated circuits.

The merger will prove particularly effective in the power semiconductor segment, complementing Infineon's range of high-voltage, high-power semiconductors with International Rectifier's low-voltage, low-power chips, according to an Infineon spokesman.

The acquisition is also expected to increase the use of Infineon's Dresden fab. As the Infineon spokesman pointed out, Infineon is the only company today in the world with the 300mm "thin wafer" capability on which Infineon's own power semiconductors are produced. The high-volume capacity available in Dresden will get a boost from producing International Rectifier's power semiconductors.

Gunning for promising GaN

Equally important for Infineon is that the acquisition could help it close the technology gap in the promising gallium nitride (GaN) on silicon segment. IR is equipped with a manufacturing capability for GaN-based power semiconductors.

The German company says the merger will "accelerate and solidify" Infineon's position in GaN discretes and GaN system solutions, "improving its ability to pursue this strategically important technology platform with significant future growth potential."

Industry observers are quite bullish on GaN market. In a recent report, Yole Développement noted that "The GaN power industry is consolidating in preparation for significant growth."

Yole's Philippe Rousel wrote:

Overall, 2020 could see an estimated device market size of almost $600M, leading to approximately 580,000 x 6" wafers to be processed... Ramp-up will be quite impressive starting in 2016, at an estimated 80 per cent CAGR through 2020, based upon a scenario where EV/HEV begins adopting GaN in 2018-2019.

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Estimated accessible markets, growth rate, and time-to-market. Source: Power GaN Market, Yole Développement, June 2014

Compared with Infineon's strength in serving large customers including car OEMs and Tier 1s, International Rectifier is known for its deeper penetration in distribution channels. Infineon believes IR could help its presence in the United States and Asian markets.

Since it was spun out of Siemens in 1999, Infineon has gone through a number of makeovers in its corporate identity. Once a leading DRAM chip manufacturer, Infineon later became known in such markets as 3G cellular modem ICs and wireline communication silicon, both of which it later jettisoned. The German company is hopeful acquiring International Rectifier will put it on a path to lead the power semiconductor market, leveraging the combined companies' accelerated efforts in silicon carbide (SiC) and GaN technologies.

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