POWI Q3 2024: Targets 20% GaN Revenue in 2–3 Years via 1,700V Launch
- Advanced GaN Product Positioning: The company’s recent 1,700‑volt GaN announcement targets high-voltage automotive (800‑ and 1,000‑volt systems) and industrial applications, offering higher efficiency and cost advantages over traditional silicon carbide solutions.
- Robust GaN Revenue Growth Prospect: Executives project that GaN products could account for about 20% of revenues in the next 2–3 years and potentially exceed $100 million in GaN revenue by 2028, underpinning a strong, evolving portfolio as legacy products migrate to GaN.
- Favorable Market Trends: The expansion into GaN is well aligned with long‑term macro tailwinds in renewables, EVs, and high‑voltage DC transmission, driving additional demand for advanced power solutions.
- Weak Consumer Demand & Inventory Build-up: Q&A discussions highlighted that consumer demand, particularly in the appliance market, has been softer than expected. This is evidenced by customer inventory build-ups due to delayed or uneven Chinese stimulus incentives, which could pressure margins and future revenue.
- Reliance on New GaN Adoption: Executives pointed to the transition toward GaN technology to replace legacy silicon. However, uncertainties around the pace of adoption and competitive pressure from silicon carbide—especially in high-voltage and high-power applications—pose risks to timely revenue growth.
- Sequential Revenue Decline: Guidance for Q4 indicates lower sequential revenues, and Q&A remarks suggest that even though industrial may hold up, other segments are expected to decline, potentially impacting overall performance.
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GaN Revenue Outlook
Q: Future GaN revenue share and targets?
A: Management highlighted that legacy products are migrating to GaN, expecting it to comprise 20% of revenue in the next 2–3 years and aiming to exceed $100 million in GaN revenue by 2028. -
High-Power GaN Lead
Q: How competitive is high-power GaN?
A: They explained that at 750 volts GaN is nearing parity with silicon and is far more competitive than silicon carbide below 100+ watts, with advancements targeted over the next 3–5 years. -
1,700V GaN Demand
Q: What is the role of 1,700V GaN?
A: The new 1,700-volt product is designed to support automotive systems (transitioning to 800–1,000 volt batteries) and industrial applications needing robust surge protection, offering efficiency advantages over silicon carbide. -
Inventory Impact
Q: How are inventory levels affecting sales?
A: Management noted that in the consumer segment, sell-through lagged behind sell-in, leading to channel inventories slightly above 8 weeks, while inventories in other segments returned to normal levels. -
Appliance Inventory
Q: Was Chinese appliance inventory built ahead?
A: They confirmed that strong earlier consumer demand led appliance customers to build up finished goods inventory in anticipation of varied government incentives, which eventually did not deliver the expected boost. -
Renewables Impact
Q: Does the new administration affect renewables?
A: Management expressed no concern, noting that renewable energy remains cost-effective compared to coal and that DC transmission is critical for offshore wind and electric vehicles, supporting continued demand. -
Segment Outlook
Q: What is the Q4 revenue segment outlook?
A: They predicted that while the Industrial segment would remain flat in absolute terms—thereby increasing its revenue percentage—other segments are expected to decline sequentially.
Research analysts covering POWER INTEGRATIONS.