Denso Mulls Withdrawing Acquisition Offer for Chipmaker Rohm

Nagoya, April 26 (Jiji Press)–Major Japanese auto parts supplier Denso Corp. is considering withdrawing its acquisition proposal for major Japanese chipmaker Rohm Co., informed sources have said. Denso, part of the Toyota Motor Corp. group, is finding it difficult to gain support from Rohm for the acquisition offer, the sources said. If the offer is withdrawn, industry consolidation in the Japanese power semiconductor industry is likely to proceed mainly through talks on business integration between Rohm, Toshiba Corp. and Mitsubishi Electric Corp. In early March, it came to light that Denso, which regards the chip business as a growth area amid expectations of long-term EV market growth, had offered to acquire Rohm. Rohm later set up a special committee to examine the proposal. Demand for power semiconductors is expected to grow not only for EVs but also for a wide range of applications such as home appliances and industrial machinery. For this reason, some within Rohm are cautious about the possibility that its operations under Denso could focus too much on automotive chips. Following Denso’s acquisition proposal, Rohm announced on March 27 that it had reached a basic agreement to begin discussions on integrating its semiconductor business with Toshiba and Mitsubishi Electric. Rohm is also believed to be concerned about the possibility of being swallowed up by the Toyota group, industry sources said. As the business scale of each domestic power semiconductor maker is small, it is important for them to strengthen their international competitiveness at a time when Chinese and other manufacturers are increasing their presence. However, the form of the integration of the semiconductor operations by the three Japanese companies remains uncertain, including who will take the lead in realizing a three-way alliance. END [Copyright The Jiji Press, Ltd.]