By Shuntaro Murase / Yomiuri Shimbun Staff Writer

Major Japanese semiconductor companies have begun reviewing their investment strategies on power semiconductors, which have various applications such as being used in electric vehicles.

The move reflects the rapid deterioration of market conditions, caused by factors such as falling prices due to an increased semiconductor manufacturing push by Chinese companies.

The Japanese government is urging the semiconductor industry to realign itself to strengthen its competitiveness. This has spurred recent moves by manufacturers.

Renesas Electronics Corp. has suspended its development of next-generation power semiconductors featuring silicon carbide (SiC), a material which allows for greater energy efficiency. The company has withdrawn a plan to start mass-producing these semiconductors in 2025 at a factory in Takasaki, Gunma Prefecture. It has dissolved a team in charge of SiC products and is set to reconsider its mass-production schedule.

Silicon carbide has a greater capacity than conventional silicon materials to withstand high voltages and large currents, so using it in propulsion parts can give electric vehicles greater driving range.

However, the market for EVs in Europe and other regions has grown less than semiconductor makers expected, and prices for SiC products have begun trending downward because of increased production by Chinese manufacturers. Chinese automakers are also procuring more parts from within their own country, creating another headwind for Japanese manufacturers.

A growing number of domestic semiconductor companies are responding to the situation by decreasing their investment in power semiconductors. Mitsubishi Electric Corp. will start operating a power semiconductor plant in Kumamoto Prefecture this autumn, but it has postponed its plan to expand the plant's capacity to fiscal 2031 or later. The company had planned to invest 300 billion yen over five years from fiscal 2026, but it is now considering reducing that amount.

Rohm Co., in its consolidated financial results for the fiscal year through March 2025, posted a net loss for the first time in 12 years, influenced by sluggish market conditions for power semiconductors. The major semiconductor company had planned to invest 280 billion yen in SiC semiconductors over three years from fiscal 2026, but ultimately decided to trim the amount to 150 billion yen.

"We expect (the SiC semiconductor market) to grow in the medium to long term, but I believe that the oversupply in the market will continue and competition will intensify further," said Rohm President Katsumi Azuma.

Industry realignment

In recent years, Chinese companies have made significant strides in the power semiconductor market. In an industrial policy formulated in 2015, the Chinese government set a goal of increasing the self-sufficiency rate for semiconductors to 70% by 2025. The government's huge subsidies are believed to have helped the advancement of technological capabilities on power semiconductors and reduced costs in manufacturing them.

Meanwhile, the Japanese government has designated semiconductors as a "specified critical product" under the Economic Security Promotion Law. It is now stepping up its efforts to support semiconductor manufacturers. The government has stipulated that subsidies for capital investment in power semiconductors will in principle only be issued for projects that are worth at least 200 billion yen. As it is difficult for a single company to meet this requirement, the rule is intended to encourage the realignment of the semiconductor industry.

Tie-ups have been formed between Toshiba Corp. and Rohm, as well as between Fuji Electric Co. and major auto parts maker Denso Corp. Both pairs are set to receive government subsidies. Companies connected to the semiconductor business are exploring further realignment moves behind the scenes.

"China's subsidies are disrupting the (power semiconductor) market," said Akira Minamikawa, a semiconductor industry expert at U.S. research firm Omdia. "There is a risk of (Japanese makers) losing competitiveness if swift action is not taken. The need to realign (the industry) is growing."

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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June 10, 2025 05:24 ET (09:24 GMT)

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