ROHM and Toshiba Eye Power Semiconductor Integration

Insiders reveal that ROHM Semiconductor and Toshiba are in talks to integrate their power semiconductor operations. While the details of the integration are still under discussion, one possibility is forming a joint venture to combine the power semiconductor businesses of the two Japanese firms.

Earlier reports suggested that Denso, the Toyota Group's automotive components arm, had proposed acquiring ROHM's remaining 95% stake. Based on ROHM's current market value, the deal could reach up to ¥1.3 trillion (around $8.2 billion). ROHM's interest in collaborating with Toshiba may be a strategic move to enhance its value in response to Denso's acquisition offer.

The discussions on industry consolidation are largely driven by the growth of overseas manufacturers, including Chinese companies. According to U.S. market research firm Omdia, Toshiba and ROHM held 2.6% and 2.5% of the global power semiconductor market in 2024, respectively. This is a significant gap compared with the industry leader, Infineon Technologies, which commands a 17.4% share. Meanwhile, Chinese firms such as Silan Microelectronics and BYD continue to expand their presence, leveraging cost advantages.

Denso could potentially acquire ROHM after the integration, forming a three-company alliance, but this would increase the financing needed for the transaction. Alternatively, Denso might consider integrating the operations of all three companies without pursuing a full acquisition, though this approach could extend the timeline for finalizing the deal.

In 2023, ROHM Group invested ¥300 billion in Toshiba through its investment fund, Japan Industrial Partners, as part of Toshiba's privatization process. Talks on power semiconductor collaboration began in 2024 but stalled as ROHM prioritized revitalizing its business amid a slow electric vehicle market.

ROHM has established a special committee to evaluate Denso's acquisition offer—including the proposed price and plans to increase company value—to determine if it benefits shareholders. The newly disclosed integration plan could influence ROHM's decision on whether to accept the acquisition.

ROHM excels in automotive power semiconductors, particularly using silicon carbide (SiC) materials known for high energy efficiency. Toshiba, meanwhile, specializes in mainstream silicon-based products and serves a broad customer base, including the energy sector.