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Summary:

An invention that can run data centers more efficiently and cut electric use is no doubt dear to Google’s heart. So it’s not surprising that Google Ventures became a lead investor in a startup called Transphorm, which made its public debut Wednesday.

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Google Ventures invests in all sorts of novel technologies, but an invention designed to run data centers more efficiently and cut power use is no doubt near and dear to Google’s heart. So it’s not surprising that Google Ventures became the lead investor in a startup called Transphorm, which made its formal public debut and announced a $20 million C round on Wednesday.

“One of the things that attracts us to Transphorm is we understand the problem of wasted power,” said Bill Maris, managing partner of Google Ventures. “It’s not good for our shareholders, our data centers and our world.”

Transphorm, located next to Santa Barbara, Calif., is developing a power conversion module that it says can significantly reduce electricity losses when power is converted from alternative current (AC) to direct current (DC) or the other way around. This conversion takes place many times from when electricity leaves a power plant (in AC) to when it reaches servers, which could run on AC or DC depending on their designs.

A bit of electricity is lost along the way partly because of the power needed to make that conversion and partly because of the materials and design of the converters. The losses are dissipated as heat, which then often prompts the need for cooling technology. In a hybrid electric car, for example, a radiator sits next to the combustion engine to cool it while a second radiator cools the power electronic system that powers the electric motor. The company said its technology could eliminate the need for the radiator to cool the power electronic system.

Generally, about 10 percent of power loss occurs during each conversion step. Collectively, all these losses can add up to terrawatt hours of power, the company said. Transphorm’s technology can reduce that loss by up to 90 percent, said Umesh Mishra, CEO of Transphorm.

Transphorm, founded in 2007, is unveiling its first product next month and will first target power supply equipment makers that sell their wares to data centers, Mishra said during a press conference at Google Ventures’ Silicon Valley office. Data centers are notorious energy hogs, and they doubled their electricity use between 2000 and 2005 worldwide. A 2010 Pike Research report estimated that investments into energy-efficiency software and hardware for “greening” data centers will grow annually to reach $41.4 billion by 2015.

What makes Transphorm’s technology stand out among other power conversion equipment is its use of gallium nitride, Mishra said. Power converters today rely on silicon, which has reached its limit to improve conversion efficiencies, he added. Gallium nitride, on the other hand, is better at preventing leaks by holding onto the maximum voltage when it’s not delivering power, he said. But making gallium nitride, which can’t be found in nature, so that it doesn’t degrade and lose its ability significantly presents a technical challenge.

Although there is no shortage of research into using gallium nitride to improve power conversion, a lot of that is focused on low-voltage conversion, Mishra said. Transphorm’s first product will be in the 600-volt range and suitable for industrial operations such as data centers, solar panels and automotive drives, said Primit Parikh, president of Transphorm. The company is working on 900-volt designs, he added.

Many data center operators already have a bag of tools for reducing power use, from servers that power down when not in use to investing in better cooling technologies. There also are suites of software for monitoring and adjusting power use onsite or remotely. By minimizing power losses during conversion, though, Transphorm’s technology also can help eliminate other expenses such as for cooling equipment.

Maris said it’s too early to say whether Transphorm’s modules will eventually find a home at any of Google’s server farms. Google could certainly provide Transphorm’s technology department ample opportunity to test its products, but that hasn’t happened yet, Maris said.

Nailing the technology is important, but Transphorm won’t succeed if it can’t offer attractive pricing for its products. The company plans to make its own modules and currently has a factory set up at its headquarters, said Parikh, who declined to disclose the production capacity or cost. The startup’s initial product won’t be able to compete in cost with silicon-based equipment, but it expects to reach parity in five to seven years, provided that demand is there, Mishra said.

The company, which has raised $38 million total since its inception from investors including Kleiner Perkins and Foundation Capital, already has attracted customers. Companies that are evaluating Transphorm’s technology include industrial control and automation equipment supplier, Yaskawa Electric Corp., and solar inverter maker, Satcon. Transphorm expects to start shipping the modules later this year.

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Photo, from left to right, Bill Maris of Google Ventures, Umesh Mishra of Transphorm and Randy Komisar of Kleiner Perkins.

  1. Photo, from left to right, Bill Maris of Google Ventures, Umesh Mishra of Transphorm and Randy Komisar of Kleiner Perkins.

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  2. I think I see a problem with the hybrid car analogy: While it’s true a fan cools the engine while another cools the electronics, improving the efficiency of AC/DC conversion has little to do with those two processes, which are unrelated. The engine fan runs to remove the waste heat of internal combustion, and the fan for the electronics runs to cool the batteries and electric motors. The propulsive and braking systems are all DC and the only AC involved (as I understand it) is in the alternator associated with the engine electronics. And these two systems are separate. There would be a very modest efficiency gain in the engine electronics to be derived by using this technology in that system, but I don’t see a place for its application in the hybrid system itself. The only application I can imagine here would be if the vehicle were a plug-in rechargeable, where it would improve the efficiency of the conversion from household (or charging station) 120 or 240 Volt AC to DC for the batteries.

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    1. Hi Robert, there is a missing line there to say that Transphorm’s technology could eliminate the need for the radiator to cool the power electronics. I’ve added in. Also, the battery produces power in DC but the electric motor runs on AC:
      http://www.popularmechanics.com/cars/alternative-fuel/news/4306961
      and
      http://www.ornl.gov/~webworks/cppr/y2001/rpt/121813.pdf

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  3. [...] have increasingly moved into investing strategically into cleantech firms, from Google Ventures, to Intel Capital to Cisco to even a power company like NRG Energy. But it’s still somewhat [...]

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  4. [...] a good fit for power supply equipment makers that sell their wares to data centers, and the company intends to target this customer. Data centers are notorious energy hogs, and a 2010 Pike Research report estimated that investments [...]

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  5. [...] solar market with its power conversion technology. Instead of using silicon chips, as Enphase does, Transphorm is using gallium nitride. Enphase also is investigating the use of these more exotic materials, Nahi said, but has no plans [...]

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