Japan's power chip industry just admitted what everyone outside Japan already knew: fragmentation was a problem.
Toshiba, Rohm, and Mitsubishi Electric signed a memorandum of understanding on March 27 to begin talks on integrating their power semiconductor businesses, Toshiba said in a corporate announcement. If the combination proceeds, it would create the world's second-largest power chip group after Germany's Infineon Technologies, with a combined 11 percent of the global market versus Infineon's 24 percent, according to Reuters, which first reported the three-way talks.
The math has been obvious for years. Rohm held 2.8 percent of the global power semiconductor market in 2025, Mitsubishi Electric 3 percent, and Toshiba 1.7 percent. Individually, none of them had the volume to justify the silicon carbide substrate investment that Infineon runs at scale. Together, they might.
The target is SiC. All three companies have silicon carbide portfolios, and SiC is the material that makes electric vehicle inverters and charging systems efficient enough to extend range and reduce cooling loads. It is also the substrate of choice for industrial motor drives and renewable energy inverters, which means whoever controls SiC volume production controls part of the energy transition supply chain. Japan's government has been watching Infineon accumulate automotive power customers while its own chipmakers stayed too small to compete globally.
Toshiba and Rohm had already been circling each other. In December 2023, the two companies submitted a joint plan to Japan's Ministry of Economy, Trade and Industry covering collaboration and investment in power device volume production. The plan was recognized under the government's secure semiconductor supply program. The three-way deal supersedes that bilateral track.
Here is the complication nobody in the MoU is talking about: Denso. The Toyota-affiliated parts giant proposed acquiring Rohm for an estimated $8.3 billion in early March. Denso holds 1 percent of the global power semiconductor market and already acquired a 5 percent stake in Rohm before proposing the full takeover. If Denso succeeds, Rohm goes to Toyota. If the three-way merger proceeds, Rohm goes to a neutral entity controlled jointly by the three. These talks can coexist, collapse under the acquisition's weight, or render it moot. The Japan Fair Trade Commission will have something to say about at least one of those scenarios.
For automotive and industrial buyers, the real question is not which structure eventually wins. It is whether a consolidated Japanese group can close the gap with Infineon on volume, process technology, and customer relationships fast enough to matter in the 2030s. Infineon has a 13-point market share lead and decades of automotive and industrial customer trust. The combined entity starts at 11 percent and has to earn the rest.
Watch for whether the three enter exclusive negotiations. That signal will tell you whether Denso's bid is still in play.
