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Investment in Joint Venture
 12 Months Ended
Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Investment in Joint Venture Investment in Joint Venture
Through July 31, 2021, the Company was party to a joint venture agreement (the “JVA”), by and among Aizu Fujitsu Semiconductor Limited, Fujitsu Semiconductor Limited (“FSL”), the Company and Transphorm Aizu, Inc. (“Transphorm Aizu”) for the ownership and operations of Aizu Fujitsu Semiconductor Wafer Solution Limited (“AFSW”). Through July 31, 2021, the Company held a 49% interest in AFSW through Transphorm Aizu, the Company’s wholly-owned subsidiary established in Japan to manage the financial transactions around AFSW. Transphorm Aizu and FSL funded AFSW based on a mutually agreed funding schedule. Any outstanding balances were reviewed upon the conclusion of the JVA effective July 31, 2021 to assess unfunded commitment to joint venture liability. During the year ended March 31, 2022, the Company recognized a $1.5 million gain, in other income, upon termination of the JVA and settlement of its obligation.

On April 1, 2020, FSL exercised its put option under the JVA and notified the Company that FSL intended to exit the joint venture by selling its 51% interest in AFSW to the Company. In December 2020, the Company entered into a joint venture agreement with JCP Capital Management, LLC Limited (controlling party with 75%
ownership) to create GaNovation, a joint venture company in Singapore, to engage in the business of distribution, development and supply of GaN products and, upon approval of the regulatory authorities in Japan, to purchase FSL’s and Transphorm’s interests in AFSW. In July 2021, regulatory authorities in Japan approved GaNovation’s purchase of 100% of the interests in AFSW from Transphorm and FSL. On July 20, 2021, Transphorm Aizu entered into a Share Purchase Agreement (the “Purchase Agreement”) with GaNovation, pursuant to which GaNovation agreed to acquire Transphorm’s 49% interest in AFSW from Transphorm Aizu for 1 Japanese Yen. The closing of the Purchase Agreement occurred on August 1, 2021. Following the closing of the Purchase Agreement and other concurrent transactions between GaNovation and FSL, GaNovation owns 100% of AFSW and Transphorm now holds a 25% interest in GaNovation. For the year ended March 31, 2022, GaNovation’s primary business activity related to the businesses of AFSW. The Company and JCP Capital Management, LLC Limited (“JCP”) have agreed to use their best efforts to maintain the operations of AFSW until at least August 1, 2022.

GaNovation (through AFSW) manufactures semiconductor products exclusively for its owners under manufacturing agreements at prices estimated to cover the cost of production. GaNovation was determined to be a variable interest entity as the equity at risk was not believed to be sufficient. GaNovation depends on its owners for any additional cash. The Company extended $2.0 million and $2.5 million to GaNovation and AFSW to fund operations of GaNovation and AFSW, respectively, for the year ended March 31, 2022, and $968 thousand and $7.3 million to AFSW to fund AFSW’s operations for the three months ended March 31, 2021 and the year ended December 31, 2020, respectively. The Company’s known maximum exposure to loss approximated the carrying value of its investment balance, which included the financing. Potential future losses could be higher than the carrying amount of the Company’s investment, as the Company is liable for other future operating costs or obligations of GaNovation. In addition, because Transphorm is currently committed to purchasing GaN wafers and production-related services from AFSW at pre-agreed pricing based upon the Company’s second generation products, the Company may be required to purchase products at a higher cost for its newer generation products. Investment in GaNovation was $143 thousand as of March 31, 2022, and unfunded commitment to GaNovation was $1.9 million and $1.5 million as of March 31, 2021 and December 31, 2020, respectively.
JCP is responsible for 75% of the funding obligations and losses of AFSW, while Transphorm is responsible for 25% of the funding obligations and losses of AFSW for the period from April 1, 2022 through March 31, 2023 and JCP is responsible for 67.5% of the funding obligations and losses of AFSW, while Transphorm is responsible for 32.5% of the funding obligations and losses of AFSW for the period from April 1, 2023 and thereafter, except that JCP’s total funding obligations or investments shall not exceed $35 million and Transphorm’s total funding obligations or investment shall not exceed $12 million for the three year period starting from August 1, 2021.
The Company’s investment activities in GaNovation and AFSW for the periods presented are summarized below (in thousands):

AFSW (Joint Venture Between the Company and FSL)
January 1, 2020$(1,688)
Investment7,348 
Loss(6,836)
Effect of exchange rate change(290)
December 31, 2020(1,466)
Investment968 
Loss(1,468)
Effect of exchange rate change100 
March 31, 2021 (1,866)
Investment2,490 
Loss(2,078)
Gain1,455 
Effect of exchange rate change(1)
July 31, 2021$— 
GaNovation (Joint Venture Between the Company and JCP)
August 1, 2021$— 
Investment2,036 
Loss(1,893)
Effect of exchange rate change— 
March 31, 2022$143 

     Summarized unaudited financial information of GaNovation and AFSW for the periods indicated are as follows (in thousands):
GaNovationAFSW
March 31, 2022March 31, 2021
Current assets4,259 $932 
Long-term assets3,690 $5,330 
Other current liabilities3,799 $2,200 
Due to controlling owner(1)$22,354 
Due to Transphorm— $13,179 
Net surplus (deficit)4,151 $(31,471)
GaNovationAFSW
For the Eight Months Ended March 31, 2022For the Four Months Ended July 31, 2021For the Three Month Transition Period Ended March 31, 2021For the Year Ended December 31, 2020
Sales$6,933 $2,176 $842 $2,976 
Gross loss$(6,168)$(3,191)$(2,425)$(11,411)
Net loss$(7,707)$(4,260)$(2,995)$(13,952)