AI power growth eclipsed by legal and factory risks
- Navitas is pivoting from phone chargers to high-power markets like AI data centers and grid equipment.
- The company heavily diluted shareholders in the first half of 2026 by raising nearly $381 million through stock sales.
- Navitas faces severe legal threats including a patent lawsuit from Wolfspeed and a trade secret lawsuit from Renesas naming the CEO.
- AI infrastructure sales grew rapidly in early 2026 as legacy mobile revenue became a smaller portion of the total.
- The biggest hard risk is supply, because TSMC plans to stop GaN production in July 2027.
A growth pivot shadowed by lawsuits and dilution
Navitas is attempting to become a key supplier for the AI and energy buildout. Its chips help convert electricity more efficiently, which is critical when AI racks and grid gear demand more power in less space. The strategic shift to these high-power enterprise markets is working on the top line, with AI infrastructure seeing rapid early adoption.
However, the cost and execution risks of this pivot are becoming severe. The company is highly unprofitable and heavily diluted shareholders to fund its operations, raising roughly $381 million through stock sales in the first half of 2026. This cash gives them a long runway, but it comes at a steep price to existing investors.
Beyond the financial strain, Navitas is fighting battles on multiple fronts. Supply chain fragility remains high as their sole GaN supplier, TSMC, plans to exit the business in mid-2027. Now, the company must also navigate existential legal risks. Two major competitors filed lawsuits in mid-2026, alleging patent infringement and trade secret misappropriation, introducing a new layer of uncertainty over product viability and executive leadership.
Fabless chips, fragile supply
Navitas is a fabless semiconductor company. This means it designs chips, but outside partners manufacture the wafers, assemble the parts, and test them. This approach keeps capital spending lower, but makes factory access, production yields, and supplier timelines absolutely critical.
The company sells power semiconductors through distributors to equipment makers and their suppliers. Its historical revenue came from mobile and consumer chargers. The new strategy focuses sales on AI data centers, energy and grid infrastructure, performance computing, and industrial electrification.
A key part of the model is a GaN intellectual property cross-license arrangement with Infineon. This allows large customers to secure a second source for similar GaN parts, which helps lower the fear of relying on a single smaller supplier.
The business model faces serious challenges if high-power customers do not transition from pilot programs to large orders. It is also vulnerable if new suppliers cannot replace TSMC for GaN manufacturing before July 2027, or if costly litigation disrupts operations.
Power chips for bigger loads
GaN power ICs
Gallium nitride chips switch power very fast and can shrink power supplies. Navitas aims these parts at AI racks, high-power computing, and energy systems.
High-voltage SiC devices
Silicon carbide handles high voltage and heat better than older silicon. Tariffs on US-sourced SiC wafers are a major pricing risk for Navitas in China.
Bi-directional GaN platforms
These products can move power in both directions, which helps in solar and energy storage systems fitting the grid strategy.
Low-voltage AI rack platforms
Navitas has 80V to 120V platforms aimed at power delivery inside AI data center racks. Upside depends on hyperscaler adoption.
Legacy mobile and consumer chargers
This was the core business, but it is being intentionally wound down. Management expects mobile contribution to become insignificant by the end of 2026.
Q2 2026 sales by region
This mix is from Q2 2026 net revenues by geography. It shows geographic sales rather than specific end markets.
What could break the story
Existential intellectual property lawsuits
High impact · High oddsWolfspeed filed a patent infringement lawsuit covering Navitas GaN and SiC products. Separately, Renesas filed a lawsuit against Navitas and two former employees, including the CEO, for trade secret theft. These present severe risks to product sales and leadership stability.
GaN supplier switch
High impact · High oddsNavitas relies heavily on TSMC for GaN wafers. TSMC announced it plans to stop GaN production in July 2027. Navitas is working with alternatives like Powerchip, but new suppliers must meet strict cost, quality, and volume needs on time.
Massive shareholder dilution
High impact · High oddsThe company raised roughly $381 million through at-the-market stock sales in the first half of 2026. While this provides a cash runway, the ongoing losses mean further dilution remains a constant threat to equity value.
AI programs stay non-binding
High impact · Medium oddsNvidia named Navitas as a partner in an AI power initiative, which is excellent validation. However, a partnership mention is not a purchase order. The stock needs actual binding revenue from 800V HVDC and other AI designs.
China and tariff pressure
Medium impact · Medium oddsChina still accounted for 35% of Q2 2026 revenue. The company warned that 125% retaliatory tariffs on US-made chips hurt SiC competitiveness in China because it relies on a single US source for SiC wafers.
In one breath
What does Navitas Semiconductor do?
Navitas designs power semiconductors using GaN and SiC. These chips help power systems convert electricity with less waste and smaller hardware.
Why is NVTS linked to AI data centers?
AI data centers need much more electricity per rack. Navitas is attempting to sell chips and platforms that improve power delivery in those racks and in grid systems.
Is Navitas profitable?
No. The company runs significant operating losses and has heavily diluted shareholders to raise cash and fund its transition.
What is the biggest risk for Navitas?
The biggest risks are the impending loss of its primary GaN supplier in mid-2027 and severe new lawsuits regarding patent infringement and trade secret theft.
