Renesas Electronics (hereinafter “Renesas”, TSE: 6723), a global supplier of semiconductor solutions, and Transphorm, Inc. (hereinafter “Transphorm”, Nasdaq), a global supplier of gallium nitride (GaN) power semiconductors: TGAN announced today that the parties have entered into a definitive agreement under which a Renesas subsidiary will acquire all of Transphorm’s outstanding common stock for $5.10 per share in cash, representing a premium of approximately 35% over Transphorm’s closing price on January 10, 2024. This represents a premium of approximately 56% over the volume weighted average price of the past 12 months and approximately 78% over the volume weighted average price of the past six months. The transaction values Transphorm at approximately $339 million. The acquisition will provide Renesas with in-house technology for GaN, a next-generation key material for power semiconductors, to expand its reach in fast-growing markets such as electric vehicles, computing (data center, artificial intelligence, infrastructure), renewable energy, industrial power supplies, and fast chargers/adapters.
Transphorm CEO Dr. Primit Parikh and Renesas CEO Hideori Shibata
As a cornerstone of carbon neutrality, the demand for efficient power systems is increasing. In response to this trend, related industries are transitioning to wide band gap (WBG) materials represented by silicon carbide (SiC) and GaN. These advanced materials offer a wider range of voltages and switching frequencies than traditional silicon-based devices. Building on this momentum, Renesas has announced the establishment of an in-house SiC production line and signed a 10-year SiC wafer supply agreement.
Renesas now aims to leverage Transphorm’s GaN expertise to further expand its WBG product lineup. GaN is an emerging material that enables higher switching frequencies, lower power losses and smaller form factors. These advantages enable customers’ systems to have more efficient, smaller, lighter structures and lower overall costs. As a result, according to industry research, the demand for GaN is expected to grow by more than 50% annually. Renesas will use Transphorm’s automotion-grade GaN technology to develop new enhanced power solutions, such as the X-in-1 powertrain solution for electric vehicles, as well as solutions for computing, energy, industrial and consumer applications.

Renesas CEO Hideori Shibata said, “Transphorm is a company led by an experienced team from the University of California, Santa Barbara, with roots in GaN power. The addition of Transphorm GaN technology adds to our momentum in the IGBT and SiC segments. It will drive and expand our power product lineup, one of our key growth pillars, enabling our customers to choose the best power solution.”
Dr. Primit Parikh, Transphorm co-founder, President and CEO, and Dr. Umesh Mishra, Transphorm co-founder and CTO, said: “Combined with Renesas’ global presence, extensive solutions and customer relationships, we are excited to pave the way for widespread industry adoption of WBG materials, setting the stage for significant growth.” This transaction will also enable us to provide further expanded services to our customers and deliver significant immediate cash value to our shareholders.” In addition, it will provide a strong platform for our outstanding team to further develop Transphorm’s outstanding GaN technology and products.”

Transaction detail

Transphorm’s Board of Directors has unanimously approved the definitive agreement and recommends that Transphorm shareholders approve the definitive transaction and approve the merger. In conjunction with the signing of the definitive agreement, KKR Phorm Investors L.P., which owns approximately 38.6% of Transphorm’s outstanding common stock. A customary voting agreement has been entered into with Renesas in support of the transaction.

The transaction is expected to close in the second half of 2024, subject to the approval of Transphorm’s shareholders, regulatory clearances and the satisfaction of other customary closing conditions.