Mitsubishi Electric (MIELY), a Japanese company with a power-semiconductor business, is seeking to reach an agreement by September with Toshiba, a diversified Japanese company with chip operations, and Rohm, a Japanese semiconductor supplier, to combine their power-chip businesses. Mitsubishi Electric CEO Kei Uruma said the companies are working through the final terms and hope to announce plans for a joint venture by September. The proposed combination would integrate sales, manufacturing, and development into one company, with Mitsubishi Electric tentatively expected to lead the merged entity. Uruma believes the deal could give the three companies a stronger chance of competing with major global rivals and possibly reaching the top position in power-semiconductor market share.
The planned venture comes as power-management chips become increasingly important in cars, data centers, industrial robots, appliances, and electronic devices. Demand for these components has gained additional momentum from artificial-intelligence infrastructure, as increasingly complex systems such as NVIDIA's next-generation Vera Rubin platform require greater power control and conversion. Mitsubishi Electric, Toshiba, and Rohm each hold less than 5% of the global power-semiconductor market, while Infineon Technologies, a German semiconductor producer, controls nearly one-fifth, according to Omdia. Industry analysts Masahiro Wakasugi and Tatsuo Yoshida said combining the businesses appears strategically sensible because Rohm and Toshiba each hold only a 2% to 3% share of the discrete-semiconductor market and face larger competitors such as Infineon and Texas Instruments, a major semiconductor company.
However, the three companies still need to resolve disagreements over the range of products that would sit inside the new venture. Toshiba and Rohm want the business to include analog chips such as converters and drivers so they can continue supporting existing customers, while Mitsubishi Electric prefers a tighter focus on power chips. Japan's government subsidy rules could also influence the economics of the deal, as power-chip companies must commit at least 200 billion, or about $1.2 billion, in investments involving other companies to qualify for support. Uruma argued that the requirement is too demanding and said Mitsubishi Electric currently receives no government backing for its chip business, even as substantial support is directed toward Rapidus, a Japanese chip startup seeking to manufacture leading-edge semiconductors. He warned that without similar assistance, the combined venture's costs could remain higher than those of overseas competitors, suggesting government support may be important to its ability to compete globally.