Toshiba and Rohm announce a $2.7 billion investment in joint power chip production

In a significant move aimed at bolstering Japan’s power chip industry, Toshiba and Rohm revealed on Friday, 8 December 2023, their collaboration in a substantial investment of 388.3 billion yen, or $2.7 billion, for the joint production of power chips. This marks the first partnership since Rohm’s involvement in the $14 billion buyout of Toshiba.

The collaboration aligns with the Japanese industry ministry’s strategic vision, addressing concerns about the fragmentation of the country’s power chip sector and its ability to compete with industry giant Infineon Technologies AG. As part of the initiative to enhance the domestic power chip industry’s competitiveness, the ministry has announced a subsidy of up to 129.4 billion yen, equivalent to a third of the total investment.

Power chips play a crucial role in efficiently managing electric power in various applications, including cars, electronic devices, and industrial equipment. The ministry anticipates the global power chip market to reach 5 trillion yen by 2030.

In the joint venture, Rohm is set to invest 289.2 billion yen in a new plant located in Miyazaki Prefecture on the southern island of Kyushu. The facility will focus on producing silicon carbide power chips, known for their popularity among electric car manufacturers due to their ability to handle high voltages and increased efficiency. Meanwhile, Toshiba will contribute 99.1 billion yen to a cutting-edge 300mm fabrication plant in Ishikawa, central Japan, dedicated to the production of silicon power chips.

This investment aligns with a plan announced in 2022, in which Toshiba committed to spending 125 billion yen to more than double its power chip production. Chips manufactured at these plants will be marketed under their respective brands.

Notably, this collaboration follows Rohm’s recent decision to invest 200 billion yen to participate in a consortium led by private equity firm Japan Industrial Partners (JIP) for the privatization of Toshiba. Despite this, both companies emphasize that the collaboration has been under consideration “for some time” and that Rohm’s investment in the Toshiba buyout did not serve as the impetus for the current joint plan.

Japanese power chip manufacturers, including Toshiba, Rohm, Mitsubishi Electric, and Fuji Electric, maintain a global presence, contributing to the country’s standing in the competitive landscape of the power chip industry.