Surging Gallium Costs Present Dual Challenge for Navitas Semiconductor

Navitas Semiconductor Corporation finds itself navigating a complex landscape of soaring input costs and a strategic business pivot. The company’s focus is shifting decisively toward the AI sector, highlighted by a key partnership with Nvidia. However, this promising transition is being overshadowed by severe supply chain instability, particularly a dramatic spike in the price of gallium, a metal critical to its technology.

Strategic Pivot and a Landmark Nvidia Partnership

Under the leadership of CEO Chris Alexandre, who assumed the role in September 2025, Navitas is executing a significant strategic redirection. The company is moving its emphasis away from consumer-grade chargers and toward industrial AI infrastructure. This shift is evident in its financial trajectory, with revenue declining from USD 83.3 million in 2024 to USD 45.9 million in the transitional year of 2025. Alexandre has characterized the fourth quarter of the prior year as the cyclical low point for the business.

A cornerstone of the company’s future growth strategy is its collaboration with Nvidia. Navitas has been selected to supply the power systems for Nvidia’s upcoming “Rubin” generation of AI servers. This application will leverage Navitas’s gallium nitride (GaN) and silicon carbide (SiC) technologies to manage the extreme power demands—reaching up to 480 kW—of modern 800V server architectures.

Supply Chain Volatility and Gallium Price Explosion

This strategic advancement coincides with a severe challenge in the company’s supply chain. The availability of gallium, a fundamental component for Navitas’s GaN chips, has deteriorated sharply. A combination of export restrictions from China and logistical disruptions stemming from conflicts in the Middle East triggered a price explosion for high-temperature metals in mid-March 2026, effectively doubling gallium costs in a very short period.

Should investors sell immediately? Or is it worth buying Navitas Semiconductor Corporation?

Navitas is directly exposed to these volatile input expenses. The company is in a crucial scaling phase to meet demand for high-performance applications in AI data centers and electric vehicles. Its ability to offer these solutions competitively now hinges significantly on how effectively management can navigate the turbulence in the raw materials market. In response to the threat of production shortfalls, many semiconductor manufacturers, including Navitas, are building inventory reserves.

Market Reaction and Future Outlook

Investors have recently responded with optimism to the company’s long-term prospects. Navitas shares recorded a weekly gain of approximately 25%, closing at 8.85 euros on Friday and moving closer to their 52-week high of 9.60 euros.

The ultimate success of Navitas will depend on whether its technological leadership within the Nvidia ecosystem can offset the rising cost of materials. While hyperscaler investments in AI infrastructure are projected to surpass the USD 700 billion mark in 2026, securing a stabilized supply of specialized power components remains the most significant near-term hurdle. Substantial revenue contributions from the AI segment are not expected to materialize fully until 2027.