• Chip firm Navitas aims to overtake traditional semiconductors with a greener option.
• Co-founder and CEO Gene Sheridan tells Insider that gallium nitride chips can cut down electricity use.
• But defects, knowledge gaps, and supply chain issues hinder the shift to the new chips, he said.

Silicon chips are widely used to power smartphones, laptops, and other electronic devices. But new, more environmentally friendly chips are on the rise. 

Gallium nitride, also known as GaN, is a chemical compound that combines byproduct of aluminum, called gallium, with nitrogen. The chips can generate more power than silicon ones with the same amount of electricity in a much smaller form, according to Huili Grace Xing, an electrical and computer engineering professor at Cornell University who researches GaN chips.

And companies want in on GaN. $1 billion Navitas seeks to disrupt the global semiconductor industry with the tech, Gene Sheridan, CEO of Navitas, told Insider. After decades working with silicon chips, Sheridan started Navitas to capitalize on an emerging technology he says has a multi-billion dollar market potential. But it's been an uphill battle to convince electronic companies to replace silicon chips due to a lack of awareness and quality control issues. 

California-based Navitas has sent its designs to Taiwan Semiconductor Manufacturing Company, a semiconductor giant, to produce and ship more than 50 million GaN chips, according to the company. Since its founding in 2014, the company raised more than $300 million before it went public in 2021.

Today, the majority of Navitas' GaN chips can be found in phone and laptop chargers made by customers like Samsung, LG, Lenovo, and Dell. But the company plans future innovations that could make its GaN chip a top choice to prevent data server meltdowns that lead to service disruptions and the loss of hundreds of thousands of dollars, according to Sheridan. Data centers using these chips to cool their infrastructures may be able to cut carbon emissions because GaN chips use less energy than silicon.

"I think we can actually accelerate the world's transition to more renewable energy," Sheridan said.

It took Sheridan and his co-founder Dan Kinzer decades of research and development to land on a design for its chip that now has over 150 patents, according to Sheridan. Sheridan claims that its integrated circuits give Navitas chips a competitive edge to GaN chips produced by competitors like Infineon, Texas Instruments, and Nvidia. GaN chips made by competitors use more energy and force the customer to design around the chip, but that's not necessary with the Navitas product, said Sheridan.

As technology companies seek new ways to reduce carbon footprints, the $5 billion dollar GaN chip market is expected to grow to $26 billion by 2030, according to a market research report by P&S Intelligence. But GaN chips are prone to defects, must deal with knowledge gaps on the technology, and face supply chain issues. 

Navitas rallied against the challenges by iterating on its product and working with educators

While experts say that GaN has the power to revolutionize the electronics industry, the compound isn't new.

Academic researchers at universities in America and Japan began studying GaN in the nineties. In 1993, Japanese engineers Shuji Nakamura, Hiroshi Amano, and Isamu Akasaki used GaN to invent the first blue LED light which transformed the lighting industry and spurred the commercialization of the the compound.

But GaN was still prone to defects, making its application unpopular among electronic companies. So Navitas decided to take a stab at perfecting the chips. But its designers and engineers struggled to make them work. 

Because GaN chips are made up of dissimilar materials, the electric currents may not flow properly. If the voltage is too low, the chip won't turn on. But if the voltage is too high, it will blow a fuse.

"GaN is really fast and really efficient, which are great qualities, but extremely sensitive to how you turn them on and off," Sheridan said. 

Still, the usability of the GaN chips has been a roadblock for Navitas. Electronic companies aren't aware that the GaN chips can work with their devices.

"The biggest challenge we had was an unawareness that high speed components existed," Stephen Oliver, corporate vice president of marketing and investor relations at Navitas, told Insider. "You can't drop a Ferrari engine into a Yugo chassis and expect the car to perform."

Oliver said he often has to educate customers about GaN's usability.

And that lack of awareness about the chips spreads all the way through the education systems. While Xing said she makes an effort to teach students about GaN, the coursework on electronic design at most schools, including her own, are overwhelmingly based on silicon.

"There's still a large knowledge gap in our curriculum in terms of our electronic design," Xing said. Navitas often hires her students to research and build GaN chips because Cornell's engineering department works GaN into their curriculum, she said.

GaN chips are far from replacing silicon chips

GaN still has a long way to go to replace silicon chips.Manufacturers are stuck in the old ways of silicon chips, and supply chain disruptions have limited their availability.

"Semiconductor shortages have been driving our customers crazy," Sheridan said.

GaN chips must work with other chips and parts of the device to generate power, and customers are struggling to get these materials. Plus, silicon chips still dominate large tech firms. At chip giants like Intel, the material is critical for handling low voltages in its graphics processing units and memory chips, according to Oliver.

And GaN chips are finnicky. The GaN compound has a complex crystal structure that is difficult to maintain and can easily break if manufacturers don't deposit it on silicon wafer properly, said Xing. The longer process makes it more expensive. 

Nonetheless, Navitas continues to grow. Earlier this month, Navitas acquired semiconductor firm GeneSic, a producer of a hard compound that combines silicon and carbon, for an undisclosed price that helped increase its stock by 26.6%. It has also invested in research and development to design GaN chips for bigger systems. 

Next year, the company plans to roll out GaN-based data center supplies, followed by solar-powered GaN chips the year after that, then GaN powered electric vehicles by 2025, Sheridan said. Navitas also plans on applying for funding from the recently passed US Chips Act and is considering opening a manufacturing plant in the United States.

"I think the world's going to need a lot more manufacturing capacity for GaN chips given how huge this is going to be," he said.