Ideal Power Inc (NASDAQ:IPWR) ended the second quarter of 2024 having made notable progress to support its B-TRAN technology commercialization.
In an exclusive interview with Proactive, CEO Daniel Brdar discussed the company’s milestones in the semiconductor sector, where Ideal Power is expanding its presence in the electric vehicle (EV) market through new partnerships.
Ideal Power’s silicon-based semiconductors, which reduce energy losses more effectively, are expected to enhance EV efficiency and performance, addressing key industry challenges. Alongside existing collaborations with Stellantis and another major automaker, Ideal Power’s alliance with RYOSHO is set to bolster its market reach, particularly in Asia, positioning the company for significant growth in the semiconductor and EV industries.
Proactive: Can you provide more details on the B-TRAN technology? What specific advantages does B-TRAN offer over traditional electromechanical contactors in electric vehicles?
Dan Brdar: Electric vehicles face two significant challenges today. The first is their high cost compared to traditional automobiles, and the second is consumer range anxiety due to the slow development of charging infrastructure. Our semiconductor technology addresses both issues by enhancing the efficiency of battery charging and discharging, which extends battery mileage. Additionally, by using silicon instead of more expensive materials like silicon carbide, our technology reduces costs, benefiting both the cost and range of the vehicle. This directly tackles some of the key problems that EV manufacturers are working to resolve.
Automakers have several opportunities to integrate our technology into their vehicles, particularly within the drivetrain, which handles the high-power components of the car. Our technology can be used in the drivetrain inverter, which manages energy transfer to and from the battery. We have a program with Stellantis for a custom B-TRAN module for their drivetrain inverter and another global automaker is looking at incorporating our B-TRAN technology into EV contactors—devices designed to isolate the battery from other systems for safety during maintenance. These contactors are crucial for managing the flow of electricity, especially as vehicles transition to higher voltages seen in the next generation of EVs.
High-power contactors can be expensive, but our semiconductor devices offer several advantages. They can handle higher voltages—our devices are rated for 1200 volts while current EVs are moving toward 800 volts—with greater efficiency. Additionally, they operate orders of magnitude faster than traditional electromechanical contactors, eliminating issues like arcing that can degrade the contactor's lifespan. Semiconductor-based contactors not only enhance safety and reliability but also offer programmability, providing greater flexibility. The combination of high withstand voltage, programmability, and rapid operation makes our technology a valuable asset for modern EVs.
You mentioned the qualification of a second high-volume production fab in Europe. How does this dual-sourcing strategy impact your supply chain resilience and capacity to meet anticipated customer demand?
As we experienced during COVID, global supply chains are highly susceptible to disruption. To address this, we aimed to establish production capabilities in two geographically distinct locations. We previously qualified a facility in Asia and recently completed the qualification of a facility in Europe. This geographic diversity helps mitigate risks and dual sourcing helps to ensure sufficient capacity to meet the anticipated demand from the large companies collaborating with us.
For instance, automakers—one of our target customer segments—have very high-volume requirements. Bringing a wafer fabricator on board and scaling up production is a lengthy process that can take a year or more, not weeks or months. Therefore, we secured two wafer fabs with existing production capacity to meet our customers' needs as they increase their use of our products. This setup not only provides geographic redundancy but also safeguards us against potential disruptions in global supply chains.
With the new distribution agreement in Asia, how do you plan to leverage this partnership to expand your market presence in the region, and what specific markets are you targeting?
We believe this addition will be highly valuable for us. RYOSHO, the distributor we recently onboarded, specializes in semiconductors and power electronic devices. They have an established customer base with companies that we currently do not serve, allowing them to reach these customers more efficiently than we could on our own. Additionally, RYOSHO boasts a strong technical sales team that is well-versed in new technology. They can not only explain the technology to customers but also demonstrate how it can be integrated into their OEM products. This partnership, along with our previously announced distribution agreement with Richardson Electronics, enables us to access a broader customer base that we, as a small US-based company, might not be able to reach effectively on our own.
You’ve secured orders from significant players in the power semiconductor and solar industries. What is the expected timeline for these orders to transition from evaluation to full-scale deployment, and what impact do you foresee on Ideal Power's revenue?
Industrial customers typically have shorter design cycles compared to sectors like the automotive industry. However, engineers tend to be conservative and slow to adopt new technology. Some of our customers in the Test and Evaluation Program, who previously used discrete versions of our B-TRAN device, are now beginning to adopt our SymCool power module for breadboards and prototypes in their labs. Over time, this could lead to a design win in the industrial sector.
Once a design win is achieved, it usually takes about a year to finalize the product. The process to secure a design win can be lengthy, but once you’re established, whether with an automotive manufacturer or an industrial product company, switching to a different semiconductor device is often complex and costly. Therefore, it's crucial to invest time in familiarizing customers with our technology, maintaining regular communication on test results, and addressing their needs for data. This builds their confidence in our products, deepens their understanding, and makes it more difficult for competitors to displace us.
Is there anything else that stood out to you from the quarter?
One of the exciting developments for us is that we're now able to increase the ratings of our products. Initially, we took a conservative approach with the power ratings of our first products, but we’re now seeing opportunities to expand those limits. For instance, we’ve increased the rating of our SymCool power module by 25% while reducing its size by 50%. As a result, the power density of this product has significantly improved, making OEM products that incorporate it smaller, more compact, and more cost-effective. We're using feedback from our Test and Evaluation Program to drive these enhancements, translating customer insights directly into product improvements.