Toshiba and Rohm To Fund $2.7 Billion To Produce Power Chips By CIOTechOutlook Team

Toshiba and Rohm To Fund $2.7 Billion To Produce Power Chips

CIOTechOutlook Team | Friday, 08 December 2023, 06:08 IST

Toshiba and Rohm announced a 388.3 billion yen ($2.7 billion) investment to co-produce power chips, the first collaboration since Rohm's $14 billion takeover of Toshiba.

The latest partnership is what the Japanese industry ministry has hoped for out of concerns that the country's power chip industry is too fragmented to catch up with industry giant Infineon Technologies AG. The ministry separately said it would subsidise up to 129.4 billion yen, or a third of the total investment, as part of an effort to help the domestic power chip industry retain its competitiveness, as per economic times.

Electric power is efficiently controlled by power chips in automobiles, electronic devices, and industrial equipment. The ministry anticipates that the worldwide power chip market will reach 5 trillion yen by 2030. Rohm will invest 289.2 billion yen in a new plant in Miyazaki Prefecture on the southern island of Kyushu to produce silicon carbide power chips, which have proven popular with electric car makers due to their ability to handle high voltages and be more efficient.

Toshiba will invest 99.1 billion yen in a cutting-edge 300mm fabrication unit for silicon power chips in Ishikawa, central Japan. The investment is part of a 125 billion yen plan launched last year to more than treble power chip output.

The chips made at the factories will be sold under their own labels. The agreement follows Rohm's decision to spend 300 billion yen in a consortium led by private equity company Japan Industrial Partners (JIP) to take Toshiba private.

However, the two businesses stated that they had been discussing a collaboration "for some time," and that Rohm's involvement in the Toshiba takeover "did not serve as the starting point" for the latest agreement.