Companies that work on the building blocks of electronics don’t really get the kind of attention as ones that, say, build social networks, or make hot mobile apps. But transforming the way that electronic devices — from chargers for mobile phones, to server systems to electric cars — consume power could be a huge, and valuable, breakthrough.
Transphorm is a six-year-old startup that is seemingly under the radar mostly because its technology is pretty geeky. It makes a power conversion device that electronics can use that can save 50 percent of the energy that is usually lost in the power conversion process. Most electronic devices need to use direct current, but the power grid supplies alternating current, so most devices need to have the power converted to run on it. This historically has been a very inefficient and wasteful process.
Most power conversion devices, like the charger you use with your cell phone, use silicon parts for the conversion process. But Transphorm’s products use the semiconductor material gallium nitride, which is commonly used in LEDs, instead. Researchers and companies have tried to use this material for conversion in the past, but Transphorm says it’s found a way to do this at a lower cost than has been done traditionally.
Yep, it’s not that sexy sounding, but the company has been on a roll lately. On Thanksgiving Transphorm announced that it bought a unit of Japanese giant Fujitsu that had a rival technology. In the process Fujitsu also became a shareholder in Transphorm and Fujistsu will handle the manufacturing as Transphorm looks to commercialize its technology.
Finding a large partner to do manufacturing is huge for a cleantech startup. Many solar panel, electric car and next-gen battery maker startups have run out of money on their way to building out factories. Increasingly it’s become clear that big manufacturing partners are a much smarter, and leaner, way to get products commercialized.
Transphorm has also managed to amass a lot of capital from investors. The latest is a $20 million round that was filed on Wednesday, and they’ve raised over $100 million total to date. Investors include Valley heavyweights like Lux Capital, Kleiner Perkins, Google Ventures, and Foundation Capital.
These investors see the potentially massive market ahead if Transphorm can get its commercial products right. As much as 10 percent of all the energy used in the U.S. is wasted through inefficient power conversion. The company can make conversion devices for anything from HVAC systems, to servers, to data centers, to electric cars to solar panels. The company is working with solar inverter company Enphase Energy to develop a solar power conversion device using financial support from the Department of Energy’s ARPA-E program.
The next step for Transphorm is to move into commercial manufacturing, which it’s now going to do with partner Fujitsu. It already has a pilot production line in Santa Barbara, Calif. If it can start selling break through products, it’ll be able to start to disrupt a market that has long relied on the silicon standard.
Here’s an interview I did with Transphorm’s co-founder and CTO (former CEO) about the fundamental tech. We named them a Green;Net big ideas companies back in 2011: