Denso’s bid to acquire ROHM, seen as a potential turning point in Japan’s reshaping of the power semiconductor sector, has fallen through. With ROHM opting to pursue a three-company alliance with Toshiba and Mitsubishi Electric, the center of gravity in the industry’s reorganization appears to be shifting away from being folded into an automaker group and toward consolidation among manufacturers. The Nikkei newspaper reported in its April 26 edition that Denso had sought to buy ROHM to prepare for the spread of electric vehicles but decided to withdraw after failing to win ROHM’s consent.
Denso in February proposed buying all ROHM shares through a tender offer valued at about 1.3 trillion yen (about 12.1 trillion won). Denso had already secured about a 5% stake in ROHM and pursued cooperation in semiconductors, but it did not obtain control. ROHM, meanwhile, had been holding separate integration talks with Toshiba and Mitsubishi Electric. The three companies began discussions in March on combining their power semiconductor businesses, and ROHM’s decision increases the likelihood that the plan will move forward in earnest.
A central issue is business balance and independence. ROHM has strengths in silicon carbide-based power semiconductors, a next-generation material, and Denso aimed to absorb that capability to quickly boost competitiveness. ROHM appears to have judged that becoming part of Denso could tilt its business toward automotive semiconductors and unsettle ties with other auto-parts makers that are existing customers. By contrast, a three-company alliance could serve a broader range of demand, including industrial, infrastructure and consumer electronics markets, enabling a more balanced growth strategy.
The global competitive landscape also looms large. Europe’s Infineon Technologies and U.S.-based onsemi rank among market leaders, while Chinese companies are intensifying low-price competition. Most major Japanese players have market shares below 5%, underscoring limits to scale as standalone firms. Automakers are also accelerating in-house semiconductor efforts: Tesla and BYD are strengthening their own chip design, and Volkswagen is working with a Chinese company on vehicle system-on-chip development. Against mounting pressure on multiple fronts, the three-company plan reflects a push to gain strength through scale.
Still, significant hurdles remain before any alliance becomes reality. One is persuading shareholders. ROHM shares rose into the 3,200-yen range on expectations of a Denso deal and have recently climbed into the 3,700-yen range. With the tender offer off the table, shareholders will focus on whether a three-way integration can deliver greater corporate value. With ROHM’s annual shareholders meeting set for June, confidence in management could also become an issue.
ROHM executives voiced confidence. ROHM President Katsumi Azuma said the three-company alliance “can maximize shareholder value and surpass Denso’s proposal.” If ROHM’s SiC technology is combined with Toshiba’s broad customer base and Mitsubishi Electric’s strengths in high-voltage infrastructure, some have suggested the integrated power semiconductor business could be discussed as reaching the world’s No. 2 tier by revenue.
Execution is another challenge. Integrating multiple companies can complicate decision-making and slow agreement on leadership. Toshiba and ROHM previously held cooperation talks that failed to take concrete shape, raising concerns that the latest effort could face similar setbacks.
The collapse of Denso’s bid is being read as a signal that Japan’s power semiconductor industry is choosing horizontal consolidation among manufacturers over automaker-led vertical integration. Whether that choice translates into stronger competitiveness will depend on execution.
* This article has been translated by AI.
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