Analyzing Power electronics markets and technologies cannot let you insensible to Gallium Nitride and Silicon Carbide.

I remember my manager in the past, who was always very happy to work on Silicon Carbide. A technology for which R&D and applications was long to come. But it was not easy for him to launch market analysis projects on Gallium Nitride. A technology for which results (and surprises) would come faster.

It’s a completely normal thing. It’s tough. It’s very difficult to analyze these kind of markets. During the last APEC Conference, I remember a question about GaN market size and estimations. Alex Lidow states that he is aiming and will hit a $40B market, an estimation built on all power electronics switches existing. I disagreed and explained why. I will clarify my answer here again, and sustain it with explanations, examples and theories. All of this is open to discussion, as usual with Point The Gap analysis.

1. The ever question of GaN Market size

(or SiC, or Apple Watch.. or any new stuff around here)

That is the ever question. We, at Point the Gap, estimated the total invested money in GaN start-up companies to $400 to 700M. It’s huge. On the other side you have declared and undeclared money invested in R&D by companies into their devoted teams. This makes more than $ 1B thrown into the Gallium Nitride R&D, real world R&D (in opposition to the latest IPO’s from app companies like Snapchat, Facebook, Twitter or Uber… Which is a bit less hardware). People will expect that money to come back, with a return on investment factor (left to their discretion). That’s the why it’s invested. And sometimes, you have expectations that are far more correlated to that Return On Investment expectations rather than on the real world.

I heard once a power electronics analyst saying that his raising market curve was accurate, though the x axis (years) may need to be slide to the left. i.e: It will take off, but we don’t know when… Alex Lidow (again) said to me once that our work was difficult. I cannot disagree with that affirmation.

This is where we are standing when it’s about estimations of a market, made of a new material or a device, than can be used in so many innovations, that could be sub-parts of new products yet to come…

But where does this difficulty comes from.

2. Truth does not comes out of the mouth of babes GaN players

Let’s make it clear. The game of leading a hardware technology start-up company is also to tease on your product performances, features, qualities, in order to raise interest whereas you haven’t got it yet. You also need to release a MVP (Minimum Viable Product) as soon as possible, and make it work. Look at today and future crowd founding campaigns. How many of them did hit the release date target? only a few.

I’m not blaming anyone. But it’s the same for the GaN market. We are in a situation where most players are working at R&D, on early stage products and trying to convince the masses that their stuff works. So these companies are either working very hard on their teasing:

• Hiring communication consultants in order to launch the company, and it’s one day to come product
• Working in « stealth mode » in order to say afterwards that the so-called period helped them develop a product that actually works (unlike all their competitors)
• Promise a product that could beat all existing technologies… even in price (don’t forget to read the small lines)

And the last trend in Gallium Nitride market is:

• Doing the application yourself to prove that it works (our will work when it will be ready): Like Avogy (and its Zolt), Cambridge Technologies or Finsix (Okay, they are not GaN makers…) for laptop charger, or Transphorm with Yaskawa for PV inverters.

For all these last products, either they are not available, or they might be using Gallium Nitride devices in the future (and the doubt is kept) or both…

So relying on official announcements is not a good idea to get a truthful picture of Gallium Nitride market. Unofficial statements are not more reliable; You really have to read (or hear(1)) between the lines. So what is left ?

3. Evaluating GaN Market on today’s knowledge

That’s what you have with most reports you buy on the market: Market is evaluated with a mix of today’s statements, potential market and current applications. You do not see much of these market estimations talking about other potential applications. That is a miss. Look at the IGBT back in the mid 80’s. It arrived, and it was not based on a new material. It even did not push the limits of silicon beyond the known physical limit (which Super Junction MOSFET can do, using a device structure trick).

Still, a few years later, IGBT was not 600V anymore, but went put to 4.5kV and managed to open new possibilities. It created unthought possibilities for high speed trains, helped develop HVDC ( DC current for electricity transportation) among other very good new stuff.

4. Gan Market prospective evaluation: “Evaluating the unknown”

About evaluation the unknown, I have a story for you:

Do you remember the mobile phone world before smartphones arrived? Right before it became a success (potentially thanks to high-speed mobile internet capability). What was inside the phone? Not much of electronics compared to what you have today. And we had designer’s future vision already designed: your phone would become a computer, made only of a screen. Wether you believed it or not is not the question. I remember also the MEMS(2) market at that time. It was made of military applications, of a few fancy products. And then, it suddenly took off, thanks to mobile phones. Now you have at least one, at most three of these devices in your smartphone. Not many analysts saw that coming. And as a meme, I’m using it again here, to tell you the story of what my be Gallium Nitride in the future.

Alex Lidow is good at teasing or showing future applications. EPC corp. Is actually one of the only company talking about what GaN may become, or create rather than what it will replace. An that is a very good thing, because this is how you get closer to an accurate market evaluation. You must think about all possibilities, all options. Then you evaluate their likeliness to happen. But, the tricky is getting all key information. If you did not know about MEMS used to sense movement and how you could build a Wii remote or a « portable screen » rotating when needed, how could you evaluate that market. Well that’s not very different with Gallium Nitride.

This is the only to evaluate the unknown, evaluate Gallium Nitride’s market, without missing a point. Which we, at Point the Gap, are doing.

5. How much more (or less) will be GaN Market and Applications?

Finally, how much is GaN Market? Well, we are working on it and get ready to release a report on the topic by the end of the year. (Register to the newsletter to know when, and get a free sample). And I’m not to tease this before we have something accurate. What I can tell you is that you better count ont these new, prospective applications rather than staying on the old ones. Think about autonomous cars, but not only cars. All autonomous moving stuff (that will use LiDAR, thus GaN devices). Think about small electric mobility: bikes, scooters. Think about drones, about information screens, robots, Internet of Things and intelligent objects in your garage, your kitchen, in the garden or on your pet :-),  and all kind of assistance we may have in the future. think about all that, all together, and then ask yourself how many will fail, and what will represent the market size of successful ones. That is the way we are evaluation markets, and especially GaN market.

Notes:

(1): As you may know, Point The Gap is gathering information through conference attendance, but also and mainly using phone interviews. We hear a lot of unofficial statements.

(2): MEMS stands for Micro Electro-Mechanical System. These are the sensors (accelerometers, gyroscopes, boussoles…). They make your mobile phone’s screen rotate, or are inside Wii remotes.