NVTS Shifts to 8-Inch GaN: Will it Help Return to Growth Trajectory?

Navitas Semiconductor (NVTS) has started working with Powerchip to move its gallium nitride (GaN) chip production from 6-inch to 8-inch wafers. The goal here is to produce more chips at lower costs. The 8-inch wafers support the goal as they can produce about 80% more chips than the old 6-inch ones, without adding much to production costs. This move can result in better efficiency and margin gains for the company.These mid-voltage GaN chips run on 80-200-volt power systems, which can easily support new AI data centers that require just 48-volt power. The company has also developed 800-volt high-voltage GaN chips that can power next-generation AI data centers. The production of these chips will be done in the Powerchip plant. A sample of chips is expected to be sent later this year, with plans to begin larger production in 2026.The company’s current supplier, TSMC, will keep providing 6-inch wafers through at least mid-2027. This gives Navitas enough time to switch to Powerchip without supply problems. Over the next two years, most high-voltage GaN customers are expected to move to the new 8-inch process. This move forms part of Navitas’s plan to focus on higher-performance and higher-margin products. The company is cutting back on lower-margin mobile and consumer products to shift resources toward AI data centers and energy infrastructure.Although revenues fell 29% year over year in the second quarter of 2025, Navitas believes the Powerchip partnership will enable the company to reduce costs while improving margins over time. If the transition goes as planned, the new 8-inch platform can support Navitas’s long-term goal of stronger margins and steady growth.Though the Zacks Consensus Estimate for NVTS’s 2025 revenues indicates a year-over-year decline of 35%, it is expected to make a significant recovery in 2026 with an estimated growth of 23.2%.How Competitors Fare Against NavitasThe company faces strong competition from Wolfspeed (WOLF) and ON Semiconductor (ON) in the race to supply high-voltage solutions for AI data centers.Wolfspeed is a key supplier for high-voltage applications in the SiC ecosystem. Moreover, Wolfspeed is building a $3-billion Mohawk Valley fab to supply SiC for high-voltage systems, including AI data center power infrastructure.ON Semiconductor is expanding its SiC portfolio and targeting cloud infrastructure customers with integrated power modules. ON Semiconductor has also partnered with NVIDIA to accelerate the move to 800 Volts Direct Current power systems for next-generation AI data centers.NVTS' Price Performance, Valuation & EstimatesShares of Navitas have skyrocketed 121.6% year to date compared with the Zacks Electronics – Semiconductors industry’s growth of 39.1%.NVTS YTD Price Return Performance Image Source: Zacks Investment Research From a valuation standpoint, Navitas trades at a forward price-to-sales ratio of 26.71X, significantly higher than the industry’s average of 9.51X.NVTS Forward 12-Month P/S Ratio Image Source: Zacks Investment Research The Zacks Consensus Estimate for Navitas’s fiscal 2025 bottom line indicates that loss per share will narrow to 22 cents from 24 cents incurred in the year-ago quarter. The consensus mark for 2026 is pegged at a loss of 19 cents per share, indicating improvement from 2025. The bottom-line estimates for 2025 and 2026 have both been unchanged over the past 60 days. Image Source: Zacks Investment Research Navitas currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ON Semiconductor Corporation (ON): Free Stock Analysis Report Navitas Semiconductor Corporation (NVTS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks