HG Semiconductor Limited (6908.HK; the "Group" "HG Semiconductor") announced on 29 March 2022 that Xuzhou GSR Semiconductor Company Limited ("Xuzhou GSR Semiconductor"), a wholly-owned subsidiary of the Group, and GaN Systems Inc. ("GaN Systems") have conducted the first publicised industry field trial of gallium nitride (''GaN'') in the power infrastructure of an internet data centre (''IDC''). The beta test was first launched in March 2022 at the High Performance Computing Centre of Physics Department at Northwest University (NWU-HPC). The power supplies for this trial were designed in Beijing and leverage technology were provided by GaN Systems and Xuzhou GSR Semiconductor. Shenzhen Frontier Lab, a unit set up by HG Semiconductor, has also sent research and development (R&D) experts to participate in this field trial. With GaN Systems' extensive experience, resources and expertise, the energy reducing effect could reach up to 20% and minimise carbon footprint of the IDCs.

In November 2021, HG Semiconductor became a global strategic partner of GaN Systems, a market leader in GaN technology, through its US$2 million investment in the latter. By combining strengths with GaN Systems, it has manifested HG Semiconductor's ambition and conviction to propel robust development in the field of third-generation semiconductor. Through this strategic partnership, GaN Systems provided HG Semiconductor with the technology to build GaN devices to increase the Group's market leadership in the GaN semiconductor sector. In addition, the Group obtained technical support from GaN Systems in terms of the adoption of IDC power systems, electric vehicles (EV), and solar power inverters.

Against the backdrop of the country's strategy to channel computing resources from the eastern to western regions, as well as driven by the increasing integration of cloud computing, 5G, big data, internet of things (IoT), artificial intelligence and other latest advancements in information technology, demand for computing will remain strong. According to the country's plans on IDC development, the scale of computational power of national hub nodes will exceed 70%. In 2020, the power consumption of data centres in China has exceeded 200 billion kWh, accounting for about 2% of China's total power consumption, and the Power Usage Effectiveness ("PUE") reached 1.49. In July 2021, the Ministry of Industry and Information Technology of the PRC published the Three-year Action Plan of New Data Centre Development, pursuant to which PUE of newly built large-scale data centres shall be reduced to 1.3 or below by the end of 2023, whereas those in low-temperature areas should strive to drop to 1.25 or below. The Circular of Tightening Energy Efficiency Control to Reduce Energy Consumption and Carbon Emissions issued in October 2021 further stipulated that PUE of large-scale or mega-size data centres must be within the maximum limit of 1.3. It is anticipated that the national policies on IDC development will focus on balancing energy consumption and economic benefits as the sector continues to grow.

GaN Systems, being the close strategic partner of HG Semiconductor, conducted the first publicised industry field trial of GaN with Xuzhou GSR Semiconductor. With higher energy density, GaN can release 5 to 6 times more power than other traditional forms of semiconductor power supply in same size (Please refer to the photo below for the comparison between 3,000W GaN semiconductor power supply and traditional 550W silicon-based semiconductor power supply). The analysis indicates that the energy efficiency of the new power supply at 50% load up to 98%, which is 4% higher than that of the traditional Silicon-based power supplies. Accordingly, this can reduce the total energy consumption of an IDC by 10%, and when combined with the power supply replacement of uninterruptible power supply (UPS) and cooling system in IDCs, the energy reducing effect is expected to reach up to 20% for IDCs when compared to the use of legacy Silicon power semiconductors. Such revolutionary breakthrough greatly improved the industry's profits while saving energy and reducing emissions. The field trial is also a critical step towards the global adoption of GaN technology and a wider application in the power infrastructure of IDCs.

According to estimates by the Ministry of Ecology and Environment of the PRC, the number of data centre server racks of the country reached 5.436 million in 2021, representing a 27% year-on-year increase, and accounting for 2.6% or approximately 216.1 billion kWh of the total power consumption of the society. Total power consumption of data centres is expected to double by 2030. GaN-based IDC power source would improve power efficiency and system efficiency by 5% and 20%, respectively, resulting to savings of 40 billion kWh in 2021 and 80 billion kWh in 2030.  

Expert of CTIA noted that data centres, as a crucial part of new infrastructure, will be integral to the informatisation and digital transformation of the economy in the future. Industry insiders also expressed keen interest in and high expectation of the potential of GaN application in the power supply system of data centres. Therefore, the technology of GaN Systems is expected to make valuable contribution to the country's roadmap to "carbon peak" and "carbon neutrality".

Given the successful field trial and the long-term strategic partnership with GaN Systems, HG Semiconductor is poised to spearhead the development of third-generation semiconductors under the guidelines of the nation's goals to achieve carbon peak and carbon neutrality goals. While the Group continues to develop and tap the growth of GaN market, it will also create value to companies along the industrial chain in the PRC. HG Semiconductor's visionary operating strategy and solid business foundation is key to building its market leadership in the semiconductor industry in the years to come. Companies like HG Semiconductor which have entered the third-generation semiconductor scene will enjoy early mover advantage in the future and better investment returns.

About HG Semiconductor Limited

HG Semiconductor Limited (6908.HK) is principally engaged in semiconductor product business in China, including the design, development, manufacturing, subcontracting services and sales of light-emitting diode ("LED") beads, new generation of semiconductor gallium nitride ("GaN") chips, GaN components and related application products, as well as fast charging products. Leveraging its industry expertise in LED manufacturing, the Group is dedicated to accelerating its research and development and expansion in the application of GaN related products, with an aim to become a leading semiconductor company with the integration of design, manufacturing and sales of semiconductor chips, as well as providing total solutions with higher efficiency and competitive system cost.

For more details, please visit: https://www.hg-semiconductor.com