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KKR leads USD70m investment in Transphorm

Transphorm Inc, an early stage semiconductor company, has secured a USD70 million investment round led by KKR.

KKR’s investment follows initial rounds of funding led by funds affiliated with Kleiner Perkins Caufield and Byers, Foundation Capital, Google Ventures, Soros Quantum Strategic Partners, INCJ, Fujitsu, Transphorm will use this funding to support its growth, product innovation and expansion.
Dr Umesh Mishra (pictured), Chairman of Transphorm, says: “Transphorm was launched to address the urgent and important problem of losses in power conversion, a process that converts electricity from the form it is delivered to the form that is ultimately used. We are delighted KKR has chosen to invest in Transphorm. By merging the technological leadership of Transphorm with the semiconductor business expertise of KKR, we are taking a major step forward in solving the global problem of energy wasted in power conversion.”
Transphorm believes that there is a very large market for its products as its ultra-efficient power devices and modules can eliminate more than 40% of all electric conversion losses by using Gallium Nitride (GaN), a new semiconductor material that switches at far higher speeds than traditional components. GaN-based technology, known for its connection to the 2014 Nobel Prize in Physics, creates a brighter, more energy efficient light that today is the basis of the multi-billion dollar LED-based lighting industry. Similarly, when applied to power conversion, GaN components enable significantly more efficient, compact, and cost-effective products.
"Gallium Nitride is the most important new semiconductor in the world today," says Dr Shuji Nakamura, 2014 Nobel Laureate in Physics and Director of the Solid State Lighting and Energy Electronics Center (SSLEEC) at UC Santa Barbara. "My invention of the GaN-based LED and Solid State Lighting has changed the world in illumination. Gallium Nitride is also the best material for power conversion and is essential to eliminate the enormous amount of energy wasted in these processes. Transphorm is the leading company producing GaN-based power conversion products that will have the same positive impact on energy we saw with LED-based lighting."
Transphorm’s products have a power efficiency of up to 98 per cent in data centres and telecom applications, resulting in energy savings of over 10GWh annually in a typical datacenter, or the equivalent of the annual electricity usage of 1,000 typical US homes. In addition to PV inverters and datacenters, other applications for Transphorm’s technology include power supplies, motor drives and automotive systems.
Manufacturers are now producing the world’s smallest PV inverters by leveraging Transphorm’s technology in their products. Transphorm has established strategic partnerships with industry-leading customers and suppliers. Yaskawa Electric Corporation, a global leader in motion control, robotics and systems engineering, launched the first GaN-based commercially produced solar photovoltaic (PV) inverter, powered by Transphorm GaN, in the Japan market earlier this year. Transphorm's products enable approximately 50% smaller PV inverters in residential and small commercial installations up to 5kW, resulting in lower system, installation, and service costs while at the same time delivering more energy per solar panel to the grid. Tata Power Solar, one of the pioneering solar manufacturers in the world and India’s leading power conversion player, has also teamed with Transphorm to develop leading edge PV inverters. In order to provide customers with high quality volume production, Transphorm partnered with Fujitsu Semiconductor, to produce its products in Fujitsu’s automotive-class wafer fabrication facility in Aizu-Wakamatsu, Japan.
“Transphorm's technology is paving the way for a revolutionary change in energy efficiency. Right now, Transphorm is the only place where customers can acquire reliable, production volume GaN products that meet or exceed required performance specs for commercial products. Long term, we believe this has the potential to replace all of the existing silicon-based technology used in high voltage products, and wide adoption of this technology will dramatically reduce the amount of energy that is wasted by electric devices,” David Kerko, Senior Advisor of KKR, says.
For KKR, the investment is part of the firm’s growth equity strategy, which is focused on market-leading, high-growth companies for which KKR can be a unique partner in helping reach scale and the next level of growth. KKR is funding the investment from the balance sheet of KKR & Co. LP (NYSE:KKR).
As part of the transaction, KKR’s David Kerko, Brittany Bagley and Eiji Yatagawa will join Transphorm’s Board of Directors, and KKR has also nominated semiconductor industry veterans Mario Rivas and Michael White to the Transphorm board.

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