The digital world is undergoing a massive transformation powered by the convergence of two major trends: an insatiable demand for real-time insights from data, and the rapid advancement of Generative artificial intelligence (AI). Leaders like Amazon, Microsoft, and Google are in a high-stakes race to deploy Generative AI to drive innovation. Bloomberg Intelligence predicts that the Generative AI market will grow at a staggering 42% year over year in the next decade, from $40 billion in 2022 to $1.3 trillion.

Meanwhile, this computational force is creating a massive surge in energy demand—posing serious consequences for today’s data center operators. Current power conversion and distribution technologies in the data center can’t handle the increase in demand posed by the cloud and machine learning—and certainly not from power-hungry Generative AI applications. The quest for innovative data center solutions has never been more critical.

Gallium Nitride (GaN) semiconductors emerge as a pivotal solution to data center power concerns, helping counter the impact of Generative AI challenges. We dive into how Generative AI affects data centers, the advantages GaN, and a prevailing industry perception of the Power Usage Effectiveness (PUE) metric—which is creating headwinds despite GaN’s robust adoption. With Generative AI intensifying power demands, swift measures are essential to reshape this perception and propel GaN adoption even further.

The rising impact of Generative AI on the data center

Today’s data center infrastructure, designed for conventional workloads, is already strained to its limits. Meanwhile, the volume of data across the world doubles in size every two years—and the data center servers that store this ever-expanding information require vast amounts of energy and water to operate. McKinsey projects that the U.S. alone will see 39 gigawatts of new data center demand, about 32 million homes’ worth, over the next five years.

The energy-intensive nature of generative AI is compounding the data center power predicament. According to one research article, the recent class of generative AI models requires a ten to a hundred-fold increase in computing power to train models over the previous generation. Generative AI applications create significant demand for computing power in two phases: training the large language models (LLMs) that form the core of generative AI systems, and then operating the application with these trained LLMs.

If you consider that a single Google search has the potential to power a 100W lightbulb for 11 seconds, it’s mind-boggling to think that one ChatGPT AI session consumes 50 to 100 times more energy than a similar Google search. Data centers are not prepared to handle this incredible surge in energy consumption. One CEO estimates that $1 trillion will be spent over the next four years upgrading data centers for AI.

Unfortunately, while technologies like immersion cooling, AI-driven optimizations, and waste heat utilization have emerged, they offer only partial solutions to the problem. A critical need exists for power solutions that combine high efficiency, compact form factors, and deliver substantial power outputs. Power electronics based on silicon are inefficient, requiring data centers to employ cooling systems to maintain safe temperatures.

GaN: Unparalleled performance and efficiency

GaN offers unparalleled performance and efficiency compared to traditional power supply designs, making it an ideal option for today’s data centers—particularly as Generative AI usage escalates. GaN transistors can operate at faster switching speeds and have superior input and output figures-of-merit. These features translate into system benefits including higher operating efficiency, exceeding Titanium, and increased power density.

GaN transistors enable data center power electronics to achieve higher efficiency levels—curbing energy waste and generating significantly less heat. The impact is impressive. In a typical data center environment, each cluster of ten racks powered by GaN transistors can result in a yearly profit increase of $3 million, a reduction of 100 metric tons of CO2 emissions annually, and a decrease in OPEX expenses by $13,000 per year. These benefits will only increase as the power demands of Generative AI increase and rack power density rises 2-3X.

While the benefits of GaN are profound, why aren’t even more data center operators swiftly incorporating the technology? Adoption faces headwinds from what we call the “PUE loophole”—an often-overlooked weakness within the widely accepted PUE metric.

The PUE Loophole

The PUE metric is the standard tool for assessing data center energy efficiency, calculated by dividing the total facility power consumption by the power utilized by IT equipment. The metric helps shape data center operations and guides efforts to reduce energy consumption, operational costs, and environmental impact.

Data center operators continuously strive to monitor and improve the PUE to indicate reduced energy consumption, carbon emissions, and associated costs. However, the PUE metric measures how efficiently power is delivered to servers—yet it omits power conversion efficiency within the server itself. As a result, the PUE calculation does not provide a comprehensive view of the energy efficiency within a data center—creating a blind spot for data center operators.

Consider that many servers still use AC/DC converters that are 90 percent efficient or less. While this may sound impressive—10 percent or more of all energy in a data center is lost. This not only increases costs and CO2 emissions, but it also creates extra waste heat, putting additional demands on cooling systems.

GaN is remarkably effective in addressing the PUE Loophole. For instance, the latest generation of GaN-based server AC/DC converters are 96 percent efficient or better – which means that more than 50 percent of the wasted energy can instead be used effectively. Across the entire industry, this could translate into more than 37 billion kilowatt-hours saved every year—enough to run 40 hyperscale data centers.

GaN can provide an immediately cost-effective way to close the PUE loophole and save high amounts of energy. But because the PUE doesn’t consider AC/DC conversion efficiency in the server, there is no incentive to make AC/DC converters more efficient.

This article was authored by Paul Wiener, Vice President of Strategic Marketing at GaN Systems.

Explore more

• Global GaN Power Device Market Set to Soar, Reaching $1.33 Billion by 2026
• GaN in Automotive Applications and Who’s Leading?

(Photo credit: Google)

• The competitive advantage of automotive GaN components is becoming increasingly prominent.

Leveraging their exceptional material characteristics, SiC components are rapidly making inroads into sectors such as automotive, renewable energy, and power PFC. Similarly, GaN components are excelling in the field of rapid charging for terminal devices. Additionally, GaN components are gaining greater visibility in the automotive and networking sectors.

In traction inverters and onboard chargers for electric vehicles, SiC components have already become the mainstream alternative to Si components. Furthermore, the demand for SiC components in automotive DC/DC converters continues to rise. As for GaN components, their potential remains significant in onboard chargers for electric vehicles, and their competitive edge is increasingly evident in automotive electronic components, LiDAR, wireless communication modules, and audio systems. It is estimated that by 2025, in the GaN component application market share, the new energy vehicle sector will account for 21%, representing an approximately 9% growth from 2023.

• China’s Semiconductor Self-Sufficiency offer it’s domestic supply chain a chance to seize opportunities.

Considering China’s position as the world’s largest automobile market, domestic automakers in China are highly enthusiastic about adopting innovative technologies and applications. It is anticipated that the Chinese market will be a major driver of demand for automotive GaN components. On the other hand, in the context of ongoing tensions between China and the United States, semiconductor self-sufficiency has become China’s primary policy for breaking through technological barriers and sustaining technological development momentum. Compound semiconductor is a project actively promoted by both the Chinese government and private sector, making China’s GaN component supply chain even more worthy of attention.

Currently, China’s domestic major GaN substrate and epitaxy suppliers include Sino Nitride Group and Nanowin. Companies specializing in GaN epitaxy include SinoGaN, Enkris Semiconductor, Genettice, and Best Compound Semiconductor. IDM manufacturers in this field include Sanan Optoelectronics, Silan, Runxin, CorEnergy, Innoscience, and SMEI. As the demand for automotive GaN components in China continues to rise, these aforementioned companies may seize the opportunity.

According to TrendForce’s “2023 GaN Power Semiconductor Market Analysis Report – Part 1,” the global GaN power device market is projected to grow from $180 million in 2022 to $1.33 billion in 2026, with a compound annual growth rate of 65%.

The development of the GaN power device market is primarily driven by consumer electronics, with a focus on fast chargers as the core application. Other consumer electronic scenarios include Class D audio and wireless charging.

However, many manufacturers have already shifted their focus to the industrial market, with data centers being a key application. ChatGPT has sparked a wave of AI cloud server deployment, and GaN technology will help data centers reduce operating costs and improve server efficiency.

Simultaneously, the automotive market is also gaining attention, as OEMs and Tier 1 suppliers recognize the potential of GaN. It is expected that by around 2025, GaN will gradually penetrate low-power onboard chargers (OBC) and DC-DC converters. Looking further ahead to 2030, OEMs may consider incorporating GaN technology into traction inverters.

In terms of market competition, based on GaN power device business revenue, Power Integrations ranked first in 2022. The company has been leading the high-voltage market’s development since 2018, and its excellent GaN integrated solutions have gained wide market recognition. Other leading manufacturers include Navitas, Innosic, EPC, GaN Systems, and Transphorm.

Additionally, the industry paid attention to the acquisition of GaN Systems by Infineon. According to TrendForce’s statistics, the combined market share of both companies was approximately 15% in 2022.

Turning to the supply chain, as mentioned earlier, the development of the GaN power device market will be driven by consumer electronics for a long time. Therefore, the industry must pursue scale and low cost, necessitating the expansion of wafer sizes. Currently, mainstream GaN power wafers still rely on 6-inch silicon substrates, with only Innosic, X-FAB, and VIS offering 8-inch options. With a positive outlook for the long-term development of the GaN power market, several wafer manufacturers have announced plans to shift to 8-inch wafers in the coming years, including Infineon, STMicroelectronics, TSMC, and others.

Furthermore, Samsung recently announced its entry into the 8-inch market and plans to provide foundry services starting from 2025, a development worth industry attention.

(Photo credit: Navitas)

Looking at the development of the global SiC (silicon carbide) industry, IDMs in Europe and the United States occupy an absolute leading position, with the United States accounting for more than half of the market share in the substrate material sector. In order to ensure long-term and stable development of the SiC business, major manufacturers have also successively intervened in key upstream substrate materials in an effort to control the supply chain. Therefore, vertical integration has become an important trend in the development of the SiC industry. The global market value of SiC power semiconductors is estimated to be approximately US$1.589 billion in 2022 and will reach US$5.302 billion by 2026, with a CAGR of 35%.

Wolfspeed holds more than half the world’s SiC substrate market share and is first to move to 8-inch wafers

SiC substrates are characterized by difficult growth conditions, arduous processing, and high technical thresholds, which have become a key constraint on downstream production capacity. At present, only a few manufacturers such as Wolfspeed, ROHM, ON Semi, and STM have the ability to independently produce SiC crystals. From the perspective of SiC substrate market share in 2021, the leading players in order of market share are: Wolfspeed at 62%, II-VI at 14%, SiCrystal at 13%, SK Siltron at 5%, and TankeBlue at 4%.

Increasing the number of components on a single wafer is one of the main methods of further reducing the cost of SiC power components, so the industry is fully promoting 8-inch transformation. 8-inch SiC wafers have issues such as difficult material growth, laborious dicing, and losses during dicing. At this stage, yield rate is low. Therefore, 8-inch SiC wafers will not have much impact on the industry in the short term but, in the long run, with breakthroughs in material growth and process yield, the final chip cost of 8-inch wafers will inevitably present great advantages.

SiC MOSFET market highly competitive, STM comes out on top

With the successful application of high-quality 6H-SiC and 4H-SiC epitaxial layer growth technology in the 1990s, the research and development of various SiC power components entered a period of rapid development, leading to their current ubiquity in sectors such as the automotive and industrial fields. From the perspective of competition patterns in the SiC power component market, as Tesla’s first SiC supplier, STM took first place in 2021 with a market share of 41%, Infineon took second place with 22%, followed by Wolfspeed, ROHM, ON Semi and other manufacturers.

TrendForce indicates, from the perspective of SiC MOSFET technology, trench structure’s powerful cost and performance advantages will see it become the mainstream technology in the future. Infineon and ROHM have been working on this a long time and these two companies have successively introduced this structure to the market as core products. STM, Wolfspeed, and On Semi still employ planar structures at this stage but their next generation products will also move to trench structures.

（Image credit: Pixabay）

With the continuous deterioration of the global environment and the exhaustion of fossil fuel energy, countries around the world are looking for new energy sources suitable for human survival and development. The construction of photovoltaic energy storage projects is an important measure to implement energy transformation. Third-generation semiconductors have the characteristics of high frequency, high power, high voltage resistance, high temperature resistance, and radiation resistance, which can promote highly efficient, highly reliably, and low cost of photovoltaic energy storage inverters and the green and low-carbon development of energy.

SiC will be widely used in high-power string/central inverters, while GaN is more suitable for household micro-inverters

As the photovoltaic industry enters the era of “large components, large inverters, large-span brackets, and large strings,” the voltage level of photovoltaic power plants has increased from 1000V to over 1500V and high-voltage SiC power components will be used extensively in string and centralized inverters. For residential micro-inverters with a power of up to 5kW, GaN power components have more advantages. Not only can they significantly improve overall conversion efficiency, effectively reduce the levelized cost of energy (LCOE), but also allow users to easily build smaller, lighter, and more reliable inverters.

Key SiC substrates are crucial to the development of third-generation semiconductors and major manufacturers are competing to get to market

SiC substrate is regarded as the core raw material of third-generation semiconductors. Its crystal growth is slow and process technology complex. Mass production is not easy. Conductive substrates can produce SiC power electronic components while semi-insulating substrates can be used for the fabrication of GaN microwave radio frequency components. In addition, due to the high difficulty of substrate preparation, its value is relatively high. The cost of SiC substrate accounts for approximately 50% of the total cost of components which demonstrates its importance in the industrial chain.

At present, the supply of the global SiC market is firmly in the hands of substrate manufacturers. Wolfspeed, II-VI and SiCrystal (subsidiary of ROHM) together account for nearly 90% of shipments. IDM manufacturers such as Infineon, STM, and Onsemi are actively developing upstream SiC substrates and expect to take full advantage of the supply chain to strengthen their competitiveness. Everyone wants to get a piece of the pie, so the battle for SiC substrates will become more and more fierce, but the wait will not be long to see where the industry eventually goes in coming years.

（Image credit: Pixabay ）