Mitsubishi Electric aims to merge Toshiba and Rohm’s power chip business in September, setting up a subsidiary to challenge Infineon’s leading position

Mitsubishi Electric CEO Kenji Urushima revealed that the company is working hard to finalize, before September, the merger of its power semiconductor businesses with Toshiba and Rohm and establish a joint venture, with the goal of challenging Infineon’s near 20% global market share for the top spot worldwide. Bloomberg said that behind this deal is an explosion in demand for power chips driven by the AI infrastructure buildout boom.
(Background: Japan plans to procure 27.5k Nvidia Rubin chips and build its own homegrown robot platform “sovereign AI”)
(Additional context: Don’t just look at Micron—look at global memory stock concepts all at once: Korea’s pricing, Taiwan’s supply chain, Japan’s invisible champions)

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• Mitsubishi Electric: The goal is to build a “single strong company”
• Analog chip inclusion/exclusion becomes a focal point of disagreement, and the president steps onto the front line
• The 200 billion yen subsidy threshold is too high—Urushima urges the government to treat everyone equally
• Whether a decision can be made as scheduled in September will affect the global power chip landscape

Power chips have long been the most understated roles in the semiconductor world. Unlike processors, they are not talked about as much, but they quietly determine whether current can reliably flow into data centers, electric vehicles, and industrial robots. Now, driven by the AI infrastructure buildout boom, this once-overlooked niche has suddenly transformed into a battlefield for all. This has led Mitsubishi Electric, Toshiba, and Rohm—three Japanese manufacturers—to set aside their differences and push to finalize, before September, the merger of their three power semiconductor businesses and establish a joint venture, directly challenging Infineon (Infineon) for the global market leader position.

According to statistics from market research firm Omdia, Infineon currently controls nearly one-fifth of the global power semiconductor market (about 20%); meanwhile, the market share of Mitsubishi Electric, Toshiba, and Rohm each is below 5%. Bloomberg said that once the three parties successfully consolidate, the new company’s market share could climb to become number one globally, rewriting the industry’s landscape entirely.

Mitsubishi Electric: The goal is to build a “single strong company”

In an interview with Bloomberg, Mitsubishi Electric CEO Kenji Urushima said, “Our goal is to integrate sales, manufacturing, and R&D, and create a single, strong company.” He revealed that the three parties are currently working through the fine details of the agreement and continuously tweaking the terms. “We hope that by September, we can announce the plan to establish the joint venture.”

Urushima noted that Japan currently has too many power semiconductor companies, effectively scattering resources that could have been concentrated and better utilized. Partnering with Rohm and Toshiba, he said, would make R&D more efficient and increase the added value of the chips. “By combining our strengths, we will be able to engage global competitors head-on,” he said. He added that the three parties already have a temporary consensus that Mitsubishi Electric will take the lead in running the new company after the merger.

While power chips are low-profile, they are crucial to whether autos, data centers, industrial robots, home appliances, and various electronic devices can operate stably. Bloomberg’s analysis is that if Japan faces a supply shortage, it could hinder domestic industries’ plans to improve energy efficiency and expand capacity. And the biggest driver behind this demand surge is the AI infrastructure buildout boom: as Nvidia’s next-generation Vera Rubin platform increases both complexity and power consumption, the importance of power chips responsible for power regulation rises accordingly.

Analog chip inclusion/exclusion becomes a focal point of disagreement, and the president steps onto the front line

However, Bloomberg also pointed out that this merger faces obstacles. Urushima admitted that one of the biggest challenges is deciding which products the new company will supply in the future. Toshiba and Rohm both要求 that the new joint venture must include a broad range of analog chip product lines—such as converters and drivers—so it can keep serving existing customers; Mitsubishi Electric, meanwhile, hopes the new company after the merger will focus on the core business of power chips.

Because discussions at the work-level have dragged on without reaching consensus, the three companies’ presidents have met in person to try to find a compromise. In the interview, Urushima said bluntly, “Endless discussions ultimately have their limits. At some point, you have to make the right decision and act on it.”

The 200 billion yen subsidy threshold is too high—Urushima urges the government to treat everyone equally

Beyond the internal tug-of-war over the product scope, the three parties also have to deal with the issue of thresholds in Japan’s government subsidy system. The Japanese government currently stipulates that power semiconductor companies must complete at least 200 billion yen (about $1.2 billion) and involve investments from other companies in order to qualify for subsidies. By comparison, for other semiconductor projects promoted by the Hayao Saito administration, the subsidy threshold is only 30 billion yen, meaning the difference between the two is nearly 7 times.

Urushima believes that the 200 billion yen threshold is too high. He said that although the world is racing to expand power semiconductor production capacity, Mitsubishi Electric’s chip business has not received any government support so far. At the same time, the Japanese government has allocated tens of billions of dollars to support start-ups aiming to produce advanced process chips, such as Rapidus. He emphasized that government subsidies are crucial to whether one can compete with overseas rivals that receive equal support.

“With that kind of support missing, even if we establish a joint venture, our costs will still be higher than our competitors,” Urushima said. “We just want a fair competitive environment.”

Whether a decision can be made as scheduled in September will affect the global power chip landscape

This consolidation deal involving Mitsubishi Electric, Toshiba, and Rohm has been in preparation for more than a year, and it is still stuck on two key variables: product scope and subsidy thresholds. However, Urushima’s remarks suggest that while senior management is willing to step in to resolve the work-level bottlenecks, the presidents will directly make the final decision to settle the matter.

If the three can truly complete the joint venture consolidation agreement on time before September, this would not only be an internal restructuring among the three Japanese companies, but could also be the most significant shift in the global power semiconductor market since Infineon has long dominated.