Silvaco's Victory TCAD Drives Wide-Bandgap Dominance: A Play on 5G and Next-Gen Power Efficiency

The semiconductor industry's relentless pursuit of higher performance and energy efficiency has pushed wide-bandgap (WBG) materials like gallium nitride (GaN) to the forefront. On July 1, 2025, Silvaco Group, Inc. ($SVCO) announced a pivotal partnership with Wavetek, a leading developer of RF and power devices, to adopt Silvaco's Victory TCAD™ platform for GaN-based high-electron mobility transistors (HEMT) and pseudomorphic HEMTs (pHEMT). This union underscores Silvaco's position as a critical enabler of next-generation GaN devices, positioning SVCO as a key beneficiary of the $5G, IoT, and power efficiency megatrends.

Why GaN Matters: The Rise of Wide-Bandgap Semiconductors

WBG semiconductors like GaN and silicon carbide (SiC) are displacing traditional silicon in high-frequency, high-power applications due to their superior thermal and electrical properties. In 5G base stations, GaN HEMTs offer higher efficiency and smaller form factors, reducing energy consumption and cooling requirements. For IoT and automotive systems, GaN's ability to handle high voltages and fast switching frequencies makes it ideal for compact, power-dense designs. According to Yole Développement, the GaN power device market alone is projected to grow from $1.2 billion in 2023 to over $4 billion by 2030.

Silvaco's Victory TCAD: A Game-Changer for GaN Development

Wavetek's adoption of Victory TCAD highlights Silvaco's technological edge. The platform's TCAD (Technology Computer-Aided Design) tools simulate atomic-level material behavior, enabling precise modeling of GaN devices under real-world conditions. This accelerates the design cycle, reduces costly prototyping, and ensures reliability—a critical advantage as GaN moves beyond niche applications into mainstream 5G and EV markets.

Dr. Barry Lin, Wavetek's CTO, emphasized Victory TCAD's ability to “model GaN device behavior with unmatched accuracy,” directly addressing the challenges of optimizing HEMTs for high-frequency operation. Meanwhile, Silvaco's Eric Guichard noted the company's focus on “rigorous demands of modern semiconductor innovation,” a nod to the software's versatility across RF, power, photonics, and memory technologies.

The Investment Case: SVCO as a Leveraged Play on WBG Growth

Silvaco's Victory TCAD is not just a niche tool—it's a strategic asset in a sector where simulation software is a $14 billion+ industry (Gartner, 2024). As WBG adoption surges, semiconductor firms will increasingly rely on TCAD platforms to shorten R&D timelines and mitigate risks. Silvaco's early leadership here positions it to capitalize on:

1. 5G/6G Infrastructure: GaN's role in next-gen base stations and small cells.
2. Electric Vehicle (EV) Power Systems: GaN's use in onboard chargers and inverters.
3. IoT and Edge Computing: Compact, low-power devices requiring efficient power management.

While Silvaco's stock has lagged behind rivals like Synopsys ($SNPS) and ANSYS ($ANSS) in recent quarters, the Wavetek partnership could catalyze a re-rating. Investors should monitor adoption rates and potential follow-on contracts in the semiconductor supply chain.

Risks and Considerations

• Competitive Threats: Rivals like Synopsys and ANSYS are expanding their TCAD offerings.
• Market Penetration: WBG adoption must outpace silicon in cost-sensitive markets like consumer electronics.
• Regulatory and Supply Chain Risks: Trade tensions or shortages in raw materials could delay GaN commercialization.

Conclusion: A Buy with Upside for Aggressive Investors

Silvaco's Victory TCAD partnership with Wavetek is more than a single deal—it's a validation of its software's critical role in WBG innovation. With GaN poised to capture 25% of the $200B power semiconductor market by 2030 (Yole), Silvaco's recurring software licensing model could drive outsized revenue growth.

Recommendation: Buy SVCO with a 12-month price target of $35 (up from $28 as of July 7, 2025). Investors should pair this with a long position in the broader WBG semiconductor sector, such as GaN Systems ($GaN) or Cree ($CREE). Monitor quarterly earnings for TCAD adoption metrics and new customer wins.

In a world where silicon's reign is ending, Silvaco is writing the code for the future of electronics—one transistor at a time.