Is Rohm closer to acquiring Toshiba’s power chip business?

As Rohm Semiconductor deepens its ties with Toshiba Electronic Devices & Storage, industry watchers wonder if Rohm is getting closer to acquiring Toshiba’s power chips business. It all began late last year when the two companies announced a joint investment of $2.7 billion to collaborate on manufacturing power electronics devices.

But what made this news more noteworthy was that the announcement followed Rohm’s becoming part of a private equity group that was planning to take Toshiba private. However, when the two companies joined hands to boost the volume production of power devices, they stated that they had been considering this collaboration for some time and that it wasn’t a starting point in Rohm acquiring Toshiba’s power semiconductors business.

There is a third player in this $2.7 billion investment plan: the Japanese government, which adds another dimension to this hookup between Rohm and Toshiba Electronic Devices & Storage. Japan, aiming to strengthen the resilience of its semiconductor supply chains, recognises the strategic importance of power electronics and wants to double the power chip production in the country.

Moreover, Japan sees the local power chip industry as too fragmented, which makes it hard for them to compete with companies like Infineon. So, the Japanese government will subsidize one-third of this $2.7 billion investment in power semiconductor production on part of Rohm and Toshiba.

A closer look at this dimension also adds merits to the possibility of Rohm subsequently acquiring Toshiba’s power semiconductors business. It’s worth mentioning that Rohm was the first company to mass produce silicon carbide (SiC) MOSFETs, and it’s been continuously investing in this wideband gap (WBG) technology since then.

Figure 1 The Miyazaki Plant No. 2, based on assets acquired from Solar Frontier in July 2023, is dedicated to manufacturing SiC power devices. Source: Rohm

In the $2.7 billion joint investment plan announced late last year, Rohm will invest ¥289.2 billion in its new plant in Kunitomi, Miyazaki Prefecture, to produce SiC power chips. Toshiba will invest ¥99.1 billion in its newly built 300-mm fab in Nomi, Ishikawa Prefecture, to produce silicon-based power chips.

After delisting late last year, Toshiba faces an uncertain future. However, it still possesses highly valuable assets, and its power electronics business is one of them. There has also been chatter about splitting Toshiba into three units.

Figure 2 Vehicle electrification and automation of industrial equipment have led to strong demand for power devices like MOSFETs and IGBTs at 300-mm fab in Nomi. Source: Toshiba

When you see this potential divesture in the wake Japan’s desire to have a power electronics company that can compete with the likes of Infineon, Rohm taking over Toshiba’s power semiconductors business seems like a no-brainer. Among Japan’s current power chip firms, Rohm is known to have a stable power electronics business.

And the company is keen to affirm its management vision: “We focus on power and analog solutions and solve social problems by contributing to our customers’ needs for energy savings and miniaturization of their products.” Given this backdrop, Rohm taking over Toshiba Electronic Devices & Storage is probably a matter of time.

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