Mitsubishi Electric Weighs Power-Chip Merger with Rohm and Toshiba
Japan’s three biggest power-chip makers, Mitsubishi Electric, Rohm, and Toshiba, are exploring a potential combination of their power-semiconductor operations, according to sources cited by Bloomberg.
A Testimony to the Growing Demand for Electric Vehicle Chips
The talks highlight the intensifying competition to control chips crucial for electric vehicles (EVs) and other applications. A merged entity would hold approximately 11% of the global market, second only to Infineon's dominant position of around 24%.
Strengths and Synergy
Each company brings unique strengths:
- Rohm: Leads in SiC MOSFETs with its own silicon-carbide wafer fab.
- Mitsubishi Electric: Dominates high-power IGBT modules.
- Toshiba: Supplies a broad range of silicon IGBT and MOSFETs.
Combining their capabilities would offer a comprehensive foothold across various markets, from car inverters to industrial drives and grid equipment. Their combined research budget exceeding $2bn annually would enable them to invest in advanced technologies like 8-inch SiC wafers, reducing chip costs.
Challenges Ahead
The merger plans face several hurdles:
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Historical Rivalry: The current talks emerged from a complicated backstory. In February, Toyota-affiliated Denso made an unsuccessful bid for Rohm, which the company rejected to protect its cross-industry customers. Denso eventually withdrew its offer. This left a horizontal tie-up among peers as the primary path to scale rather than absorption by a single automaker.
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Structure and Ownership: Reports suggest potential structures involving both a broader integration with Toshiba’s device unit and a separate joint venture between Mitsubishi and Rohm, rather than a straightforward merger. Additionally, financial backers of Toshiba’s chip business, Japan Industrial Partners and TBJ Holdings, must be satisfied with any deal.
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Duplication and Competition: Despite the potential synergy, there is risk of duplication of efforts and continued competition within the merged entity.