onsemi has recently swept under the radar with an acquisition move that some are touting as its potential return to the gallium nitride (GaN) market. GaN semiconductors are gaining prominence for their superior efficiency and performance, particularly in applications like electric vehicles, renewable energy systems, and industrial automation. As the industry continues to shift toward high-performance, energy-efficient solutions, the demand for GaN technologies only grows, with the market projected to expand at a CAGR exceeding 25% through the late 2020s.
For onsemi, this strategic move comes at a pivotal time, following the mid-2024 bankruptcy of BelGaN, the GaN spinout from onsemi in Belgium. Since then, onsemi has been rather hush about its movements in the GaN fabrication market, only suggesting a return through acquisition. Against this backdrop, onsemi’s $20 million acquisition of the former NexGen Power Systems’ DeWitt, New York, fabrication facility could be the signal for a reintroduction into the GaN market for the company.
The article explores whether onsemi’s investment represents a cautious reintroduction into the GaN market or a deliberate step in aligning with its overarching growth plans. By examining the acquisition in the context of industry trends, onsemi’s existing silicon carbide (SiC) portfolio, and its broader strategy, we aim to uncover the implications of this move as the company positions itself for growth in 2025 and beyond.
The acquisition
On December 13th 2024, onsemi dropped $20 million to acquire the DeWitt, New York, fabrication facility, a move that has for the most part flown under the radars of many. Yet, this acquisition is potentially a significant step towards expanding its capabilities in the GaN semiconductor market.
Originally constructed for around $100 million by the state of New York, the facility has remained dormant since the GaN startup NexGen Power Systems ceased operations in 2023 due to financial difficulties. Despite receiving over $13 million in state grants and operating in a facility built by New York taxpayers, the company was unable to sustain its business and laid off its workers shortly before Christmas 2023.
Earlier in 2023, NexGen had announced a partnership with General Motors and backing from the U.S. Department of Energy for electric drive systems development using their technology. However, the company struggled to secure ongoing venture capital support or new capital, leading to its eventual shutdown and bankruptcy filing.
Given the previous GaN-focus of the facility, this purchase provides onsemi, who already operate 20 manufacturing sites worldwide, a ready-made fabrication site at a fraction of the cost and time required to build a new facility.
onsemi has already promised that the facility would be employing 80 to 100 workers to focus on the production of GaN-based semiconductors. GaN technology is particularly valuable in applications such as:
- Electric vehicles (EVs)
- Autonomous driving systems
- Solar inverters
- Wind power systems
- Energy storage systems
- Motor drives
- Power supplies for factory automation
- Data centre power management
- 5G infrastructure
- Fast chargers
- Power adapters and converters
- Radar systems
- Satellite communications
- Electric aviation
This facility gives onsemi the capacity to address growing demand for GaN semiconductors, which have become critical to industries requiring energy-efficient and high-performance components.
A strategic move
Acquiring an underutilised facility allows onsemi to rapidly enter new or expand its existing positions within the GaN market without the extended timelines and costs associated with constructing a new fab. This acquisition complements onsemi’s established capabilities in silicon carbide (SiC), potentially positioning the company to serve a broader range of power electronics markets.
While onsemi has not explicitly stated its reasons for choosing this facility, the move aligns with industry trends of repurposing dormant fabs to meet growing semiconductor demand. The company’s actions indicate a calculated approach to leveraging existing resources and infrastructure, which supports its broader goal of scaling production efficiently while diversifying its semiconductor portfolio.
By operationalising the DeWitt site, onsemi stands to contribute to the global GaN supply at a time when demand is accelerating across multiple sectors, including renewable energy, automotive, and industrial applications.
Diversifying for the future
onsemi’s diversification into both silicon carbide (SiC) and gallium nitride (GaN) technologies reflects a deliberate strategy to position the company for sustained growth across a range of power electronics markets. As demand for efficient power solutions accelerates, the ability to address different performance and application requirements is increasingly important.
onsemi has already established itself as one of the major players in the SiC market. As of 2024, onsemi has continued to strengthen its position in the SiC market. In 2023, the company achieved a 23.6% market share, ranking second globally behind STMicroelectronics, which held a 32.6% share, and eyeing up a future SiC market share of 35-40% towards 2030.
The company has invested heavily in SiC production to meet the needs of automotive and industrial sectors, which continue to drive demand for more efficient, reliable power solutions. This focus has paid off, with onsemi reporting strong growth in its SiC business, contributing significantly to its overall revenue.
Yet, whilst SiC is critical for high-power applications, GaN addresses medium-power/voltage applications, where it is seeing increasingly popularity. By expanding into GaN, onsemi will be diversifying its portfolio to serve a wider range of industries and reduce its dependency on a single technology. This diversification strategy can help the company weather market fluctuations, as it will be less vulnerable to shifts in demand within any one sector. This is especially important in the backdrop of increased GaN popularity and a teetering EV market where SiC is prevalent.
Although SiC and GaN serve different applications, they are both considered next-generation power semiconductor materials due to their efficiency and performance improvements over traditional silicon components. Their complementary nature allows onsemi to:
- Expand its customer base by offering solutions across a broader spectrum of power needs
- Optimise its R&D efforts by leveraging expertise in wide-bandgap materials
- Strengthen its market resilience by reducing reliance on any one technology or industry segment
onsemi’s heightened emphasis on GaN production, coupled with its continued investment in SiC, places it in a strong position to capitalise on high-growth sectors, including electric vehicles, renewable energy, and data centres. By aligning its SiC and GaN strategies, the company is addressing future demand trends while reducing exposure to market fluctuations.
Moving into 2025, onsemi’s ability to deliver both expanded SiC and GaN solutions will likely be a key differentiator as industries seek more efficient, sustainable power technologies.
Aligning with broader strategies
SiC has been a significant revenue generator for onsemi, with the company holding a 23.6% market share in 2023, making it the second-largest player globally, behind STMicroelectronics, which led with 32.6%. onsemi has prioritised SiC for high-power and high-voltage applications.
In December 2024, onsemi further expanded its SiC portfolio by acquiring Qorvo’s SiC business for $115 million. This acquisition enhances its ability to scale production and meet increasing customer demand, particularly from the automotive sector, which is shifting towards SiC to improve the efficiency and range of EVs.
The company’s commitment to scaling SiC production is evident through its ongoing investments in vertical integration, securing control over the entire supply chain—from raw materials to finished products. This approach is helping onsemi mitigate supply chain risks and maintain a competitive cost structure.
While onsemi’s focus on SiC has been clear, the recent acquisition of the DeWitt, New York, fabrication facility signals a renewed interest in GaN technology. GaN is better suited for medium-power, medium-voltage applications, where SiC doesn’t quite make as much sense to use.
The decision to re-enter the GaN market comes at a time when demand for GaN-based semiconductors is accelerating, driven by industries prioritising efficiency and sustainability. This acquisition allows onsemi to scale GaN production without the significant capital expenditure required to build a new facility from scratch, providing a faster and more cost-effective path to market.
Beyond this, a combination of SiC and GaN technologies offers onsemi a balanced portfolio to address a wide range of customer needs. By diversifying across these two wide-bandgap semiconductor technologies, onsemi reduces its dependency on any single market or technology, which enhances its resilience to fluctuations in demand. This dual strategy also positions the company to capture opportunities in both established and emerging markets.
Looking ahead to 2025, the SiC and GaN markets are expected to continue growing at a rapid pace:
- The global SiC market is projected to reach $10 billion by 2030, driven primarily by EV adoption and industrial applications.
- The GaN semiconductor device market is forecasted to grow to approximately $4.25 billion by 2029, at a compound annual growth rate (CAGR) of 22.3%.
onsemi’s ability to deliver both SiC and GaN solutions will give it the ability to capture a shares of both these growing demands. By securing control over its supply chain, expanding its production capacity, and addressing diverse market needs, the company is well-positioned for sustained growth as industries transition to more energy-efficient power solutions.
With a clear strategy to leverage its SiC leadership while re-establishing its presence in the GaN market, onsemi’s approach appears calculated to ensure long-term success.
What all this means
onsemi’s acquisition of the DeWitt fabrication facility is certainly an intriguing moment that is likely to have serious implications in its approach to the GaN market. Following its earlier retreat after the BelGaN bankruptcy, this strategic move seemingly indicates a more deliberate, calculated return rather than a tentative re-entry, yet without going all out. By securing a ready-to-use GaN fab at a fraction of the cost of building a new facility, onsemi aims to capitalise on rising demands for GaN semiconductors in critical sectors, including renewable energy, electric vehicles, and industrial automation.
This acquisition aligns with onsemi’s broader diversification strategy, aimed at balancing its strong silicon carbide (SiC) portfolio with medium-power GaN solutions. By offering both SiC and GaN technologies, onsemi stands to address a wider range of customer needs across next-generation power applications, mitigating market risks associated with reliance on a single technology.
The DeWitt facility enables onsemi to swiftly scale GaN production, reducing its time to market and enhancing its competitive positioning. As industries increasingly prioritise energy-efficient, high-performance solutions, onsemi’s dual focus on SiC and GaN provides a resilient foundation for sustained growth.
Moving into 2025 and beyond, onsemi’s calculated investments in both wide-bandgap semiconductor technologies position it as a versatile player in the power electronics market. Its ability to adapt to shifting demand and deliver innovative solutions across a broad range of applications will likely cement its role in driving the future of energy-efficient power systems.
