Recently, Bloomberg reported that Mitsubishi Electric CEO Kei Uruma revealed that the company is in discussions with domestic competitors about potential collaboration in power chip manufacturing. This initiative aims to strengthen Japan's competitiveness in the global power chip market and counter the growing influence of international giants.
Uruma highlighted that Japan's power chip industry is overly fragmented, with excessive internal competition weakening its global standing. He emphasized that in the face of escalating global semiconductor competition, innovation is crucial, and collaboration is the smartest path forward. "We should not fight among ourselves; we need to unite to secure market share," Uruma said. However, despite strong support from management, the proposal faces significant administrative hurdles, and progress has been slow.
Power chips, as core technologies driving the growth of electric vehicles and renewable energy, have seen a surge in demand. Companies worldwide are racing to develop more efficient and compact power semiconductors. According to research firm Omdia, Mitsubishi Electric's share of the global power chip market in 2023 was 5.5%, far behind Germany's Infineon (22.8%) and the U.S.-based ON Semiconductor (11.2%). Despite these challenges, Mitsubishi Electric anticipates its power chip business will deliver operating profits of 36 billion yen this fiscal year, a 20% increase from the previous year.
To catch up with leading global competitors, the Japanese government has ramped up support for the semiconductor industry, offering subsidies to drive technological innovation and capacity expansion. For instance, companies planning to invest 200 billion yen or more in power chip R&D are eligible for substantial government funding. This policy has already facilitated partnerships between major players like Toshiba, Rohm, Denso, and Fuji Electric, forming a more unified production framework. Denso and Fuji Electric announced plans this year to invest 210 billion yen to expand silicon carbide (SiC) power chip production, supported by a one-third government subsidy.
Silicon carbide, a critical technology in the power semiconductor sector, is seen as a key to future market competition. SiC chips offer superior efficiency and performance, meeting the demands of electric vehicles and high-voltage energy systems for miniaturization, weight reduction, and energy efficiency. Japanese companies hold strong technical expertise in SiC and continue to drive innovation and industrial deployment. For example, Rohm began SiC R&D as early as 2000 and has since launched multiple generations of high-performance SiC products, with plans to introduce its fifth generation by 2025. Mitsubishi Electric is constructing a new 8-inch SiC wafer plant in Kumamoto Prefecture, set to open in 2026. Meanwhile, Fuji Electric aims to capture approximately 20% of the global SiC market by 2025-2026, and Toshiba plans to mass-produce SiC power chips starting in 2025.
While Japanese firms possess technical advantages in power semiconductors, they face challenges such as limited domestic demand and intensifying global competition. These factors have eroded Japan's leadership in the field over the years. Against this backdrop, Mitsubishi Electric's proposal to establish a Japanese power chip alliance seeks to consolidate resources, enhance technological capabilities, and respond more effectively to international competition.
The success of this alliance will play a significant role in shaping Japan's position in the global power chip market. By fostering collaboration and pooling resources, Japanese companies may break free from their fragmented approach and regain a competitive edge. However, significant administrative and operational challenges remain. As a pivotal moment for Japan's power semiconductor industry, the outcomes of this initiative could lead to substantial industry upgrades and market breakthroughs, deserving close attention from global stakeholders.
