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Japanese Manufacturers Boost Investment in Power Semiconductors

Courtesy of Renesas Electronics Corp.
Power semiconductors

Major Japanese manufacturers of power semiconductors are boosting investment and production to take advantage of expected growth in the global market due to the spread of electric vehicles. New materials with superior energy-saving performance are also attracting attention.

Hereafter, the focus will be on whether such companies — and Japan as a whole — can be more competitive in the international market.

Factory restart

Renesas Electronics Corp. manufactures power semiconductors for automobiles and industrial equipment. During an online shareholders’ meeting in March, company president and CEO Hidetoshi Shibata expressed confidence in the company’s future growth, saying, “Power semiconductors will be needed in many situations where electricity can help contribute to humanity.”

Next year, Renesas will resume operations at its Kofu factory in Kai, Yamanashi Prefecture, which it closed in 2014. The company will invest about ¥90 billion for the facility, which will mass-produce power semiconductors, primarily for EVs.

In recent years, automobile-related demand for the company’s power semiconductors has been growing. It logged a record high of more than ¥1.5 trillion in its consolidated sales last year. The new capital spending is aimed at further accelerating growth.

Similarly, last December, Toshiba Corp. announced a plan to construct a new building at its Himeji semiconductor factory in Taishi, Hyogo Prefecture. Construction is slated to start in June 2024, with operations scheduled to begin in spring 2025. The company plans to at least double its current production capacity of power semiconductors for in-vehicle usage.

Wide range of applications

In addition to power semiconductors, there are several other types of semiconductors, including logic semiconductors for arithmetic processing — which are often used in artificial intelligence settings — and memory semiconductors, which are used in flash memory.

These types of semiconductors circuit have small circuit line widths, which is a factor that determines their processing performance. Microfabrication is required to make advanced products and manufacturers must continue to invest heavily; Japanese companies have lagged in this regard.

In contrast, power semiconductors have relatively large circuit line widths and are used in a wide range of products, including home electrical appliances and automobiles. Their performance greatly affects the power consumption of the products in which they are installed.

Japanese semiconductor makers have maintained their presence in the market due to having many sales channels, including automobile and electrical equipment manufacturers in Japan.

The market is likely to expand with the shift to EVs and the digitization of home electrical appliances. Research firm Fuji Keizai Co. predicts that the global market for power semiconductors will increase more than fivefold, from about ¥2.6 trillion in 2022 to ¥13.4 trillion in 2035.

Focus on new materials

New materials for power semiconductors are also attracting attention. Power semiconductors that use silicon carbide (SiC) or gallium nitride (GaN) consume less power than the currently used main material, silicon.

Fuji Keizai predicts that sales of power semiconductors using SiC and GaN will reach ¥5.4485 trillion in 2035, more than 30 times last year’s level.

Mitsubishi Electric Corp. plans to construct a new factory to manufacture semiconductors using SiC at its production base in Kikuchi, Kumamoto Prefecture. The company will also increase its SiC semiconductor production capacity at its factory in Koshi in the same prefecture.

Mitsubishi Electric intends to double investment in power semiconductors for the five-years ending fiscal 2025 from that of its existing plan.

Courtesy of Mitsubishi Electric Corp.
Mitsubishi Electric Corp.’s manufacturing base for power semiconductors in Koshi, Kumamoto Prefecture

Need for restructuring

Observers are watching to see whether such investments will help increase the companies’ and Japan’s share of the global market.

According to British research firm Omdia, four Japanese companies — Mitsubishi Electric, Fuji Electric, Toshiba, and Rohm Co. — were among the top 10 manufacturers of power semiconductors in terms of global sales in 2022, indicating that Japanese power semiconductor manufacturers are doing well compared to makers of logic and other types of semiconductors.

However, the combined sales figure of the four companies is still lower than that of the top-ranking German manufacturer Infineon Technologies. Japanese makers have room for further growth.

An expert panel of the Economy, Trade and Industry Ministry stated that Japan must increase its competitiveness by restructuring the industry and fostering collaboration among domestic manufacturers.

Meisei University Prof. Masahiko Hosokawa, a specialist in economic security, says China has been increasing its presence in the field of power semiconductors, just as it is doing in other fields.

“To expand into overseas markets, it’s necessary to respond urgently by taking drastic measures, such as making large-scale investments and consolidating research and development efforts,” Hosokawa said.

The Yomiuri Shimbun