Executive Summary / Key Takeaways

• Ideal Power is transitioning from R&D to commercialization, leveraging its differentiated B-TRAN bidirectional semiconductor technology, which offers ultra-low conduction losses and inherent bidirectionality, providing significant performance and cost advantages over traditional IGBTs and silicon carbide (SiC) MOSFETs in key applications.
• The company is focused on high-growth markets, primarily solid-state circuit protection (SSCBs) and electric vehicle (EV) contactors, where B-TRAN is positioned as an enabling technology due to its unique technical benefits.
• Recent milestones, including the first SSCB design win (with deliverables completed three months ahead of schedule) and the internal approval of a new EV contactor program with Stellantis (STLA), are expected to catalyze a revenue ramp starting in the second half of 2025.
• While currently operating at a net loss with increasing cash burn ($2.07M in Q1 2025, guided to increase to $2.5M-$2.7M in Q2 2025, and over $10M for FY 2025), management believes a few key design wins could drive the company to profitability, estimating $30M-$50M in annual revenue could achieve cash flow breakeven.
• Ideal Power employs an asset-light business model, dual-sourcing wafer fabrication and packaging globally (excluding China) to mitigate supply chain risks and support future volume, while continuously innovating on die design and product ratings to improve cost and performance.

The Dawn of Bidirectional Power: Ideal Power's B-TRAN Technology Takes Center Stage

Ideal Power Inc., founded in 2007 and reincorporated in Delaware in 2013, has dedicated its journey to the singular focus of developing and commercializing its Bidirectional bipolar junction TRANsistor, or B-TRAN, solid-state switch technology. This focus stems from a fundamental challenge in power electronics: efficiently controlling power flow in both directions within a single semiconductor device. Traditional solutions often require complex configurations of multiple unidirectional switches (like IGBTs or MOSFETs), leading to increased size, cost, and, critically, higher energy losses.

B-TRAN is designed to address this gap, offering inherent bidirectionality within a single device. This core technological differentiator is particularly valuable in applications where power needs to flow in two directions or where rapid, reliable switching of AC or DC power is required. Unlike conventional semiconductors, B-TRAN boasts ultra-low conduction losses, a critical performance metric in applications where the switch is continuously conducting current. This significantly reduces wasted energy and heat generation.

The tangible benefits of B-TRAN are compelling. In a direct comparison, B-TRAN enabled prototypes reduced total conduction losses versus silicon carbide (SiC) prototypes by a remarkable 60% for one customer. This translates directly into less complex and lower-cost thermal management systems, allowing for smaller, lighter, and more cost-effective end products. Furthermore, B-TRAN devices exhibit better current sharing when paralleled compared to conventional devices like IGBTs, improving reliability in high-current applications. The technology also enables significantly faster switching speeds compared to electromechanical alternatives – orders of magnitude faster for circuit protection.

Ideal Power has translated this core technology into commercial products like the SymCool Power Module, designed specifically for solid-state circuit breakers (SSCBs), and the SymCool IQ Intelligent Power Module, targeting renewable energy, energy storage, EV charging, and other industrial uses. The company continuously invests in R&D, with a next-generation B-TRAN die design underway that is roughly half the size of the current die, effectively doubling the number of dies per wafer and significantly reducing cost per die while maintaining the same voltage and current ratings. This is part of a long-term roadmap aimed at achieving 50% gross margins at scale. Automotive qualification testing is also a key focus, expected to be completed in Q4 2025, providing crucial reliability data for both automotive and conservative industrial customers.

For investors, B-TRAN's technological edge represents Ideal Power's primary competitive moat. It enables the company to target specific, high-growth markets where its performance and cost advantages are most pronounced, potentially capturing market share from less optimized traditional or alternative semiconductor solutions.

Navigating the Competitive Currents: B-TRAN's Position Against Industry Giants

The power semiconductor market is dominated by large, established players like Infineon Technologies (IFX), ON Semiconductor (ON), STMicroelectronics (STM), and Texas Instruments (TXN), who offer broad portfolios including IGBTs and SiC devices. While these companies possess immense scale, extensive customer relationships, and significant R&D budgets, Ideal Power's B-TRAN technology offers a distinct competitive angle, particularly in bidirectional, continuously conducting applications.

In the critical solid-state circuit protection market, for instance, customers are actively seeking alternatives to SiC and IGBTs due to limitations in conduction losses and cost. SiC devices, while offering fast switching, typically cost 3 to 5 times more than silicon devices and cannot match B-TRAN's ultra-low conduction losses, which are paramount for efficiency in circuit breakers. Ideal Power's success in replacing SiC in a customer's prototype and achieving a 60% reduction in losses underscores this advantage. Management is unaware of any other potentially enabling technologies for solid-state circuit breakers that offer B-TRAN's combination of low loss and bidirectionality.

In the burgeoning EV market, particularly for contactors that protect high-voltage batteries, the need for fast-acting, low-loss, and cost-effective solutions is driving interest in B-TRAN. Automakers like Stellantis evaluated SiC for contactors but found they did not meet performance and cost requirements, leading them to explore B-TRAN. Ideal Power's technology offers a solution with better performance and lower cost devices for this specific application.

Ideal Power operates with an asset-light business model, contrasting sharply with the asset-heavy approach of some competitors who own and operate their fabrication facilities (fabs). By leveraging existing investments in silicon wafer processing and packaging at qualified third-party fabs in Europe and Asia (dual-sourced with no China exposure), Ideal Power avoids the significant capital expenditure and operational complexities associated with owning fabs. This model allows the company to focus resources on B-TRAN development and commercialization while accessing ample production capacity.

While larger competitors benefit from economies of scale and broader market penetration, Ideal Power's strategy is to focus on specific applications where B-TRAN's unique technical advantages provide a compelling value proposition. The company's expanding patent portfolio (94 issued, 70 pending) and trade secret process flow further protect its intellectual property, creating a barrier to entry for potential competitors seeking to replicate B-TRAN. The challenge for Ideal Power is converting technological superiority and initial customer interest into significant market share against deeply entrenched rivals, a process that requires overcoming the inherent conservatism in adopting new semiconductor technologies.

Building Momentum: Strategic Wins and the Path to Revenue Growth

Ideal Power's commercialization efforts are gaining traction, marked by key strategic initiatives and recent customer engagements. The company has successfully launched its SymCool Power Module and SymCool IQ IPM, moving beyond prototype evaluation to fulfilling initial customer orders. While current revenue remains modest ($12,003 in Q1 2025, down from $78,739 in Q1 2024 which included development revenue from Stellantis), reflecting the early stage of customer adoption and product integration, the focus is on securing design wins that will drive future volume.

A pivotal development was the announcement in late 2024 of the first design win for SSCBs with a major circuit protection equipment manufacturer in Asia. The joint development agreement deliverables for this product were completed three months ahead of schedule in Q1 2025, positioning the customer for commercial sales later in 2025. This initial product is projected to generate several hundred thousand dollars in revenue in its first year, potentially exceeding $1 million in the second year, serving as a crucial catalyst for Ideal Power's anticipated revenue ramp. Management expects this to be the first of several products from this customer incorporating B-TRAN.

In the automotive sector, the relationship with Stellantis continues to evolve. Following the successful completion of Phase 2 of the drivetrain inverter program in 2024, discussions are underway to finalize the scope for the next phase, which will involve extensive testing for automotive certification. More significantly, a potential new program for B-TRAN enabled EV contactors has received internal approval at Stellantis and is moving through the purchase order process. Management views this contactor program as a high priority for Stellantis and expects it to move faster than the inverter program due to lower complexity, potentially accelerating the timeline to substantial automotive revenue. Ideal Power is also engaged with other global automakers and Tier 1 suppliers interested in B-TRAN for EV contactors and other applications.

To expand its market reach, Ideal Power has partnered with demand creation distributors like Richardson Electronics (REEL), RYOSHO, Sekorm, and Kaimei Electronic Corp., leveraging their technical sales teams and customer networks globally, particularly in Asia and Europe. These partnerships are instrumental in introducing B-TRAN to potential large volume customers.

Financially, Ideal Power is in an investment phase, incurring operating losses as it funds R&D and commercialization efforts. The net loss in Q1 2025 was $2.70 million, an increase from $2.47 million in Q1 2024, driven by higher R&D (personnel, fab costs) and sales/marketing expenses as the company scales up. Cash burn from operations was $2.07 million in Q1 2025, and management guides for this to increase to approximately $2.5 million to $2.7 million in Q2 2025, with the full year 2025 cash burn expected to exceed $10 million, primarily due to planned hiring.

As of March 31, 2025, the company held $13.7 million in cash and cash equivalents and had no debt, providing liquidity for at least the next twelve months from the 10-Q filing date (May 15, 2025). However, management acknowledges the potential need for additional funding in the future to fully execute its growth plan.

The outlook is centered on the expected revenue ramp in the second half of 2025, driven by initial design wins converting into commercial sales. Management estimates that achieving approximately $30 million to $50 million in annual revenue could lead to cash flow breakeven, supported by gross margins expected to be in the 30s initially and targeting 50% at scale.

The pace of customer adoption and the timing of large volume orders following design wins remain key factors influencing this timeline.

Risks to this outlook include the inherent conservatism in adopting new technologies, potentially longer-than-expected customer design cycles (especially in automotive), the ability to secure additional funding if needed, and general macroeconomic conditions impacting target markets like EVs and renewable energy. However, management believes the global nature of these markets and the compelling value proposition of B-TRAN mitigate some of these risks.

Conclusion

Ideal Power stands at a critical juncture, poised to translate its differentiated B-TRAN technology into meaningful commercial success. With its ultra-low conduction losses and inherent bidirectionality, B-TRAN offers a compelling solution for high-growth applications like solid-state circuit protection and EV contactors, where it holds significant performance and cost advantages over existing semiconductor technologies.

Recent achievements, including the first SSCB design win and progress with major automotive players like Stellantis, serve as strong validation of the technology and catalysts for the anticipated revenue ramp in the second half of 2025. While the company is currently investing heavily in commercialization, leading to increased cash burn, the path to profitability is envisioned through securing a few key design wins with large volume customers. The asset-light model and ongoing technological advancements position Ideal Power to scale production and improve margins as revenue grows. Investors should closely monitor the conversion of the company's robust pipeline into design wins and the execution of the initial revenue ramp as key indicators of Ideal Power's potential to disrupt target markets and achieve its financial objectives.