Mitsubishi Electric Corp.’s CEO, Kei Uruma, is urging domestic rivals to collaborate on power chip production. He believes that Japanese companies need to form alliances to compete with global leaders like Infineon Technologies AG. Uruma highlighted the increasing urgency for cooperation as Japanese firms fall behind in the rapidly evolving power semiconductor market.
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The Need for Consolidation in a Competitive Landscape
According to Uruma, the Japanese power chip industry is fragmented, with “too many competitors.” He argues that this internal competition hinders the continuous innovation required to succeed in the demanding power semiconductor market. He advocates for a united front, emphasizing that collaboration is crucial for gaining market share and avoiding further decline. Uruma believes that by pooling resources and expertise, Japanese companies can achieve the technological advancements needed to compete effectively.
Global Power Chip Race and Japanese Subsidies
The global demand for power semiconductors is surging, driven by the growth of electric vehicles, renewable energy, and other power-intensive applications. These sectors require smaller, lighter, and more efficient chips to manage high-voltage electronics in increasingly compact and mobile devices.
Japan, a major automotive manufacturing hub, is witnessing its automakers struggle to expand in the burgeoning electric vehicle market. To address this, the government is offering substantial subsidies to incentivize investments exceeding ¥200 billion ($1.3 billion) in next-generation power chip technologies, including silicon carbide. These subsidies have already facilitated joint ventures between Toshiba Corp. and Rohm Co., and between Denso Corp. and Fuji Electric Co. These partnerships underscore the growing recognition of collaboration as a critical strategy for success in the power semiconductor industry.
Mitsubishi Electric’s Stance and Market Position
Uruma strongly believes that collaboration should extend beyond manufacturing capacity to encompass product development and sales. He stressed that a comprehensive approach is necessary for Japanese companies to “win” in the global market.
Currently, Mitsubishi Electric holds a 5.5% share of the global power semiconductor market, significantly trailing Infineon’s 22.8% and ON Semiconductor Corp.’s 11.2%, according to Omdia. Power semiconductors represent a key growth area for Mitsubishi Electric, contributing significantly to its projected operating profit in its semiconductors and devices segment.
Beyond Power Chips: Expanding Digital Capabilities
Besides advocating for industry collaboration, Uruma also highlighted Mitsubishi Electric’s ambition to expand its digital platform, Serendie. This platform analyzes data from the company’s diverse businesses, ranging from air conditioning and factory automation to power grid equipment. Uruma indicated the company’s willingness to consider acquisitions worth hundreds of billions of yen to achieve the necessary talent acquisition and technological advancements for Serendie’s growth. This signifies Mitsubishi Electric’s commitment to leveraging digital technologies for future expansion and innovation.
Conclusion: Collaboration as the Key to Success
Uruma’s call for collaboration highlights the critical juncture faced by the Japanese power semiconductor industry. In a global landscape dominated by larger players, strategic alliances may be essential for Japanese companies to regain competitiveness. By embracing cooperation and investing in next-generation technologies, Japanese firms can position themselves for growth in the expanding power chip market. The government’s financial support further reinforces the importance of this strategic shift towards collaborative efforts.
