Japanese automotive firm Denso’s decision to retract its acquisition proposal of Rohm has shifted the focus of domestic restructuring in the power semiconductor sector to three-way talks among Mitsubishi Electric, Toshiba, and Rohm.\u00a0<\/p>\n
If the three companies succeed in integrating their operations, Japan would gain a national semiconductor giant with roughly 10% global market share, enough to rank as the world’s second-largest player in the industry.\u00a0<\/p>\n
With the country’s economic ministry backing the restructuring, the outcome will serve as a key test of whether domestic companies can compete globally against rivals from Europe, the US, and China.<\/p>\n
“It is important for Japanese companies to come together as much as possible and avoid falling behind other countries,” Mitsubishi Electric’s President Kei Uruma said at a financial results briefing on April 28, when asked about the significance of the possible integration.<\/p>\n
A Race for Scale<\/p>\n
Power semiconductors, used to control electricity in a wide range of products from electric vehicles to data center servers, are expected to be a high-growth field in the coming years.\u00a0<\/p>\n
At present, European and American companies dominate the global market share, with Germany’s Infineon Technologies at the helm. Meanwhile, Chinese firms are rapidly catching up through aggressive low-priced offerings.<\/p>\n
According to Infineon Technologies data, Infineon held the top share in 2024 at 17.4%, followed by US-based Onsemi at 8.5%. Among Japanese firms, Mitsubishi Electric ranked fourth with 4.6%, while Toshiba placed 10th with 2.6%. Rohm’s share is believed to be close to that of Toshiba.\u00a0<\/p>\n
If the three Japanese companies were to merge their power semiconductor businesses, their simple aggregated share would be on par with Onsemi’s.<\/p>\n
Each company brings distinct strengths. Rohm has an advantage in automotive applications, Toshiba has a broad customer base in the power sector, including power plants, and Mitsubishi Electric is strong in industrial fields such as railways.\u00a0<\/p>\n
A three-way integration is therefore seen as offering considerable potential benefits.<\/p>\n
A Bigger Bet Ahead<\/p>\n
Still, the real negotiations are only just getting underway. At the briefing, Uruma said the plan would likely involve spinning off each company’s power semiconductor business and placing them under a newly established joint venture.<\/p>\n
But when asked about the timing of a concrete agreement, he said only that he hoped the parties would “reach an agreement as soon as possible.”\u00a0<\/p>\n
Negotiations could take time, as the three firms may face difficult adjustments over issues such as their respective stakes in the new venture.<\/p>\n
Fuji Keizai, a Japanese research firm, expects the global market for power semiconductors to grow to $49 billion by 2035, 2.3 times its 2024 level, driven by factors like the electrification of automobiles.\u00a0<\/p>\n
To capture that growth, the three companies will need to go beyond simply increasing their scale. They will have to present a concrete scenario for how the integration would translate into stronger global competitiveness.<\/p>\n
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Author: Takehiko Nagata, The Sankei Shimbun\u00a0<\/p>\n