Navitas Semiconductor (NASDAQ: NVTS)

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Navitas Semiconductor (NASDAQ: NVTS)


Silicon has dominated the industry for years and continues to do so.However, semiconductors can use other materials as their foundation. This includes silicon carbide (SiC) and gallium nitride (GaN). Navitas calls its chips next-generation for a good reason. They use SiC and GaN, creating chips that are fundamentally different and more advanced than standard silicon.SiC and GaN-based chips can offer significant advantages over silicon. For example, Navitas says a GaN-based phone charger can charge a phone three times faster than silicon. However, these chips also have strong use cases for AI data centers, of which NVIDIA has taken notice.

Through its partnership with Navitas, NVIDIA is planning for the future. NVIDIA plans to use Navitas’ GaN and SiC chips to power its Rubin Ultra server racks, which do not come out until mid-2027. GaN and SiC power chips have several key advantages. They can handle higher voltages much more efficiently. Plus, they fit into smaller packages compared to silicon power chips.As AI becomes more complex, servers will need to consume much more power. To make this feasible, NVIDIA wants to re-engineer how power coming from the grid flows into a data center and eventually to each of its advanced AI chips.The electricity coming directly from the grid is very high voltage. So, data centers must convert it to lower voltages to make it usable by NVIDIA’s chips. Traditionally, this requires many conversions, resulting in energy loss each time. NVIDIA is looking to reduce the number of conversions. This means that each power chip involved in conversion has to handle higher voltages. Silicon chips become inefficient and large when doing this. This means that higher energy loss occurs and that more space gets taken up, leaving less space for NVIDIA’s computing chips. This creates a significant need for Navitas's GaN and SiC chips, which are more efficient at higher voltages and are smaller.