Mitsubishi Electric is in talks with domestic rivals about teaming up on power chips, its chief executive officer said, advocating Japanese alliances on the manufacture of a crucial component that drives the world¡¯s devices.
While management is broadly supportive of working together, such discussions have snagged on the administrative level and have not moved forward, CEO Kei Uruma said. Still, a sense of urgency is growing as Japanese companies fall further behind German market leader Infineon Technologies.
¡°There are too many competitors in Japan,¡± Uruma said in an interview. The power chip industry requires continuous technological innovation, and it makes sense to work together while there¡¯s still a chance at winning market share, he said. ¡°We shouldn¡¯t be fighting each other. We need to unite.¡±
Industrial technology companies around the world are locked in a race to develop smaller, lighter and more efficient semiconductors to run electric vehicles (EVs) and other high-voltage electronics that are space-constrained and mobile in an emissions-conscious world.
Japan, home to automakers struggling to expand in the EV market, is offering subsidies to help companies planning to invest ?200 billion ($1.3 billion) or more in next-generation power chips such as those made from silicon carbide. That¡¯s spurred joint manufacturing tie-ups between Toshiba and Rohm as well as between Denso and Fuji Electric.
When asked if companies need to team up in product development or sales, in addition to production capacity, Uruma said, ¡°I think we have to if we want to win.¡±
Mitsubishi Electric comprised 5.5% of global power semiconductor sales in 2023, compared with Infineon¡¯s 22.8% and ON Semiconductor¡¯s 11.2%, according to research firm Omdia.
Power semiconductors are a key growth area for Mitsubishi Electric, whose businesses span data center cooling systems and factory automation. The Tokyo-based company expects power chips to help its semiconductors and devices segment earn an operating profit of ?36 billion this fiscal year, up about 20%. It¡¯s building a new 8 inch silicon carbide wafer plant in Kumamoto Prefecture and has invested in Coherent¡¯s silicon carbide business.
The company may also need to conduct an acquisition to bolster its digital platform Serendie, set up to analyze data from its air conditioning, factory automation and power grid equipment businesses, Uruma said. Mitsubishi Electric needs to triple headcount around Serendie to 20,000 by the business year to March 2031, and would consider a deal worth hundreds of billions of yen if necessary, he said.
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