Are Integration Talks Between Rohm, Toshiba, and Mitsubishi Electric a Comeback Strategy or a Too-Late Life Extension?

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Conclusion:

If Rohm, Toshiba, and Mitsubishi Electric integrate their power semiconductor businesses, they could leverage government subsidies and the expansion of EV demand to compete against major overseas companies. Furthermore, investment in the domestic supply chain is expected to accelerate..
While stock prices may experience significant volatility in the short term, the expansion of demand for EVs, renewable energy, and industrial equipment is expected to boost performance and attract capital to related stocks in the medium to long term. Additionally, the integration will create economies of scale, which is expected to reduce SiC wafer procurement costs and redundant R&D expenses, leading to improved profit margins.

Outline:

Chapter 1: Background
• Objectives of domestic power semiconductor restructuring and government support
• Expanding EV demand and countering major overseas players (Infineon Technologies, STMicroelectronics)

Chapter 2: Strengths of Each Company
• Rohm: Leading in SiC mass production
• Toshiba: Large-diameter factories and extensive customer networks
• Mitsubishi Electric: Industrial inverter control technology

Chapter 3: Integration Proposals
• Comparison of joint company models and holding company models
• Practical challenges such as antitrust reviews and explanations to major customers

Chapter 4: Supply Chain Impact
• Stimulating investment in the wafer and manufacturing equipment market
• Ripple effects on the pricing strategies of Western competitors and procurement by EV manufacturers

Chapter 5: Stock Price Impact
• Power semiconductor stocks: Rohm surges, Toshiba and Mitsubishi Electric also in high price ranges
• Auto parts stocks: Denso and others are in a wait-and-see mode
• Equipment and materials stocks: Tailwind for Tokyo Electron and SUMCO

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Chapter 1: Background

The background to the start of discussions between Rohm, Toshiba, and Mitsubishi Electric regarding the business and management integration of their power semiconductor operations is not merely corporate restructuring, but ratheran aim to capture growth markets while protecting Japan's industrial base. On March 27, 2026, the three companies announced that they had reached a basic agreement tobegin discussions toward the business and management integrationof the power semiconductor businesses of Rohm, Toshiba Electronic Devices & Storage, and Mitsubishi Electric. According to reports, if the integration is realized, it could become a leading global camp in terms of sales scale, and the starting point for this move is the judgment thatbundling development, manufacturing, and procurement to increase competitivenessis more advantageous than Japanese companies fighting alone. The foundation of this restructuring is

government semiconductor support measures. From the perspective of economic security, the Ministry of Economy, Trade and Industry is promoting the strengthening of domestic semiconductor production capacity and has positionedpower semiconductors as one of the priority fields. Production plans for Rohm and Toshiba-affiliated companies have already been certified, anda framework to increase domestic production of SiC power semiconductors and SiC wafersis in motion. In other words, this integration discussion should not be seen as something that suddenly emerged from the companies' own decisions, but rather asrestructuring in line with the flow of supply chain strengthening promoted as national policy. Reducing dependence on overseas sources and establishinga consistent system from design to production within Japanhas become a major policy theme. There is also a tailwind in terms of demand. The

number of electric vehicle sales worldwide continues to increase, and the ratio of electric vehicles in new car sales is also rising. Since the EV market uses many power semiconductors for motor control and power conversion,the expansion of the EV market is directly linked to the expansion of power semiconductor demand. Furthermore, the importance of energy-saving performance is also increasing forrenewable energy equipment, industrial machinery, railways, and power supplies for data centers, and power semiconductors are strengthening their presence in fields other than automobiles. Rohm has strengths in SiC, Toshiba inmass production foundations for power devices, and Mitsubishi Electric ina thick customer base for industrial applications, and the fact that the three companies' areas of expertise do not overlap too much and areeasy to build a complementary relationshipis also a reason why the integration discussion is becoming realistic. Also, the fact that competitors are strong cannot be overlooked. Overseas, Infineon Technologies and STMicroelectronics have builtstrong positions in power semiconductors for automotive and industrial use

, and there have been phases where Japanese companies, even if they could compete in technology, werelikely to fall short in investment scale and mass production systems. SiC, in particular, carries a heavy burden of capital investment, and there are limits to attacking it alone. That is precisely why this discussion is important asa first step for Japanese players to break away from individual optimization and move to a system that can win on scale. For business people, this is not just a story about the semiconductor industry. It isa restructuring that will have a wide-ranging impact, from automobiles, industrial machinery, and electrical appliances to capital investment and regional employment, and it is a theme that cannot be overlooked when considering future corporate strategies and investment decisions. ⸻Chapter 2: Strengths of Each Company

The reason this integration discussion is attracting attention is not because the three companies are similar, but because

their areas of strength are clearly divided

. Rohm leads in SiC, Toshiba has mass production foundations and sales networks, and Mitsubishi Electric has strengths in control technology, including industrial equipment. Each of the three companies has competitiveness, but by bundling them, it becomes easier to cover a wider range from materials to end-use applications. This restructuring should be seen not as mere scale expansion, but asa move to strengthen competitiveness by combining areas of expertise. First, Rohm's strength is that it isleading in SiC power semiconductors. Rohm has been accumulating mass production track records for SiC MOSFETs for EVs and automotive inverters, and has already announced mass production projects for European automotive parts manufacturers. In addition, it has signed long-term supply contracts for SiC power devices with major Chinese automotive electrical component manufacturers, strengthening its supply capacity in the automotive field. In terms of production, it is also increasing its supply capacity for SiC power devices by strengthening its domestic bases. The point that Rohm is

linking SiC, a next-generation material, to mass production and customer adoption, rather than just at the research stage, is its greatest weapon. Toshiba's strength isa mass production system centered on large-diameter factories and a wide customer network from automotive to industrial. Toshiba Electronic Devices & Storage has been handling discrete semiconductors such as power MOSFETs and IGBTs for many years, and is characterized by a wide range of applications from home appliances to industrial and automotive use. In particular, at Kaga Toshiba Electronics, a new manufacturing building compatible with 300mm wafers is in operation, and at the Himeji Semiconductor Factory, a new back-end process building for automotive power semiconductors has begun operation. This shows that not only research and development, but

factory power that can supply large quantities stablyis the core of Toshiba. While Rohm is a company that moves forward with advanced materials, Toshiba is a company that enables mass production and stable supply. Mitsubishi Electric's strength iscontrol technology covering industrial inverters, railways, air conditioning, and renewable energy equipment, as well as module deployment capabilities. The company has a track record of deploying SiC power semiconductor modules from an early stage, and recently has introduced new SiC products for EV drive inverters and renewable energy power sources. In addition, it also deploys high-voltage modules for railway vehicles and large industrial equipment, as well as a wide range of products for consumer and industrial equipment. In other words, Mitsubishi Electric has not only the semiconductors themselves, but alsothe power of mastery, knowing how to control power and turn it into value with which equipment

. This strength is something that Rohm and Toshiba do not have. Lining up the three companies, Rohm's strengths areadvanced materials and automotive SiC, Toshiba's aremass production factories and supply networks

, and Mitsubishi Electric's arecontrol technology and deep penetration into industrial applications. That is why there is meaning in the integration. It is a composition where weaknesses that cannot be filled by any one company alone are easily complemented by another. From the perspective of a business person, this discussion is not just a story of semiconductor companies gathering, butan attempt to reorganize the division of labor in research and development, manufacturing, sales, and application deployment among Japanese players. If this complementary relationship functions well, it could not only make it easier to compete with major overseas companies, but also lead to the stabilization of procurement sources for customers in the automotive, industrial machinery, and power equipment sectors. ⸻Chapter 3: Integration Proposals

The biggest focus of these talks is the form in which the three companies will integrate. Two realistic options are being considered: a joint venture model and a holding company model. While both methods offer potential integration benefits, they differ significantly in decision-making speed, separation from existing businesses, and ease of explanation to customers. This restructuring is not just about consolidating factories and personnel. Because it involves maintaining supply responsibilities to key customers in automotive, industrial equipment, and power equipment sectors, it requires practical design capabilities more than legal or financial expertise. The advantage of

a joint venture model is that it is easier to carve out and integrate only the target businesses. If Rohm, Toshiba, and Mitsubishi Electric each consolidate only their power semiconductor businesses into a new company, it minimizes the impact on other parent company operations such as home appliances, social infrastructure, factory automation, and automotive-related businesses. This is particularly realistic for Mitsubishi Electric, which has a broad business domain, and Toshiba, which also holds diverse businesses beyond devices. Furthermore, a joint venture allows for shared management rights and investment burdens through adjusted equity ratios, lowering the initial hurdles of integration.

On the other hand, a holding company model has the strength of bundling brands, factories, and sales companies to streamline capital policy for the entire group. It facilitates cross-functional management of R&D, capital investment, procurement, and sales, making it easier to maximize integration benefits in the long term. However, this approach broadens the scope of organizational restructuring, increasing the burden of explaining the changes to existing customers, employees, and financial institutions. Especially for companies like Toshiba Device & Storage, which has a wide range of existing semiconductor products, determining the scope of integration is a major challenge. From a business perspective, the joint venture model is easier to execute in the short term, while the holding company model is better for deepening integration benefits over the long term.

In practical terms, antitrust law review will be a major point of contention. Even in restructuring between Japanese companies, if market share becomes high in specific fields like automotive or industrial equipment, domestic and international competition authorities may carefully scrutinize market dominance. Power semiconductors, in particular, are directly linked to procurement by automakers, parts manufacturers, and industrial equipment makers. Therefore, changes in price and supply conditions due to integration are extremely important to major customers such as Toyota, Nissan, and Honda, parts giants like Denso and Aisin, and industrial equipment manufacturers like Yaskawa Electric and Daikin Industries. The integrating parties must explain that the restructuring is aimed at stable supply and enhanced competitiveness, not at raising prices.

Another practical challenge is explaining to key customers and transferring contracts. In the automotive sector, quality assurance and long-term supply contracts carry significant weight, and ambiguity regarding supply responsibility after integration is unacceptable. For example, it is crucial to determine how much of Rohm's automotive SiC projects, Toshiba's mass-production supply projects, and Mitsubishi Electric's industrial module projects will be transferred to the new company, and how quality assurance, maintenance, and sales contacts will be maintained. What matters to customers is not the integration itself, but that delivery times, quality, prices, and support during failures remain unchanged. Failing to address this could lead to customer attrition before any integration benefits are realized.

Furthermore, the relationship with Denso's acquisition proposal for Rohm also casts a shadow over these talks. According to reports, Denso has made an acquisition proposal to Rohm, and Rohm has established a committee to compare that proposal with its own growth strategy and other options. In other words, for Rohm, there is a structure where two paths exist in parallel: strengthening ties with Denso or forming a domestic alliance with Toshiba and Mitsubishi Electric. In this sense, this integration proposal is not just industry restructuring, but a management decision element to determine who to partner with to maximize competitiveness.

Overall, a realistic practical landing point is to start with a joint venture model that limits the scope of target businesses and expand the integration range in the future. However, regardless of the method chosen, tasks such as antitrust compliance, customer explanation, contract transfer, factory restructuring, and adjustment of equity ratios are unavoidable. The success or failure of the integration depends more on the detail of the concrete plan than on the philosophy. Business people should focus not on the news of the integration itself, but on the subsequent realization of equity ratios, integration targets, customer explanations, and capital investment plans. That is where the seriousness of this restructuring will be revealed.

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Chapter 4: Supply Chain Impact

The impact of these integration talks is not limited to Rohm, Toshiba, and Mitsubishi Electric. In reality, there is the possibility of a ripple effect across the entire supply chain, including wafers, manufacturing equipment, materials, and even automotive procurement. According to reports, if the integration of the three companies is realized, they could rival leading global companies in sales scale, making this not just a topic of conversation for domestic related companies, but an important theme involving investment plans and order forecasts. Power semiconductors are not a market where success is determined solely by miniaturization competition like cutting-edge logic chips. It is a field where stable material procurement, yield, and mass production systems easily influence profitability. Therefore, if production and investment are consolidated through integration, it is likely to provide a tailwind for peripheral companies as well.

First, the investment stimulus for the wafer and materials sector is significant. Among power semiconductors, SiC requires not only device performance but also stable supply of materials, and securing wafers is essential to expand mass production. The Ministry of Economy, Trade and Industry has positioned power semiconductors as critical materials and is supporting the strengthening of domestic production capacity. In this trend, plans from Rohm and Toshiba-related entities have also been certified. Consolidating production plans to some extent after integration rather than having the three companies procure separately makes it easier to forecast orders. As a result, for companies handling materials, substrates, and related components like SUMCO, Shin-Etsu Chemical, and Resonac, this leads to stronger grounds for production increase decisions and capital investment. This integration is both a restructuring of semiconductor manufacturers and an improvement in demand forecasts for material manufacturers.

Next, we want to pay attention to the ripple effect on the manufacturing equipment market. In power semiconductors, not only lithography but also film deposition, etching, cleaning, inspection, and back-end assembly equipment are directly linked to stable production. Toshiba-related entities are advancing the operation of new 300mm-compatible buildings, and Rohm has also strengthened its SiC mass production system. If production restructuring and site consolidation proceed after integration, equipment companies like Tokyo Electron, SCREEN Holdings, Disco, and Advantest can expect not only direct new orders but also increased demand for maintenance, upgrades, and peripheral processes. Power semiconductors, in particular, have the characteristic that equipment investment is hard to finish in one go because the importance of quality control is high in both front-end and back-end processes. If the scale of investment decisions increases due to integration, continuous business opportunities will also be created for equipment manufacturers.

On the other hand, overseas competitors are also expected to counter. Infineon Technologies has a presence in the power semiconductor market, and STMicroelectronics, onsemi, and Wolfspeed are also increasing their competitiveness in the SiC field. Overseas majors are trying to gain an advantage not only in price but also in production efficiency and long-term supply contracts, and if the restructuring of Japanese companies progresses, that movement is sure to intensify. In other words, while the integration of the three Japanese companies will be a tailwind domestically, in the international market, it could also be a trigger that intensifies price-cutting pressure and lock-in competition. From a business person's perspective, while integration is a reassuring factor, it is necessary to keep in mind that it could simultaneously invite an intensification of the competitive environment.

Furthermore, this impact extends to procurement by EV manufacturers and automotive parts manufacturers. Denso has a deep relationship with Rohm, and reports also conveyed the existence of an acquisition proposal by Rohm. If these integration talks progress, Toyota, Honda, Nissan, Denso, Aisin, and Hitachi Astemo may need to review where and under what conditions they procure. What customers care about most is not the philosophy of integration, but price, delivery time, quality assurance, and clarity of supply responsibility. If the contact point is streamlined and the supply system is strengthened through integration, there are major benefits, but in the initial stage, there is a risk that the burden on the field will increase due to approval procedures and re-verification of quality. Even if there are adjustment costs in the short term, in the medium to long term, it will likely be a restructuring that is easy to evaluate as it improves the outlook for domestic procurement networks and enhances the stability of the entire supply chain.

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Chapter 5: Stock Price Impact

The most clearly reactive stocks to these integration talks were power semiconductor-related stocks, but the reaction differs by ticker even for the same news. It is important that Rohm's stock price is being evaluated not only for integration expectations but also in a tug-of-war with the speculation of an acquisition proposal by Denso that had been continuing until just before. In early March, it was reported that Denso had proposed acquiring Rohm, and Rohm's stock rose significantly. However, when the entry into integration talks between Rohm, Toshiba, and Mitsubishi Electric was reported on March 27, Rohm's stock fell back. In other words, the market did not perceive the integration itself as a one-sided positive factor, but is thought to be trading while also factoring in the possibility that expectations for an acquisition premium have receded somewhat. Rohm's stock is currently in a state where it is easy for price movements to be driven by both restructuring benefits and acquisition speculation.

Toshiba and Mitsubishi Electric do not have as extreme price movements as Rohm, but they are in a position where they are easily seen as stocks that can factor in integration benefits over the medium to long term. Toshiba's strength is its mass production system, and Mitsubishi Electric's is its penetration into industrial applications; if integration is realized, it is expected to lead to the acquisition of projects that were difficult to take on alone and to improvements in investment efficiency. However, at this point, details such as the formal integration scheme, equity ratios, and which businesses will be carved out to what extent have not been disclosed. Therefore, the market has not entered the stage of factoring in the full-scale impact on earnings, and it can be said that they are a group of stocks that are easily perceived based on expectations but whose evaluation could change depending on the details. Depending on future disclosures, expectations for integration effects could strengthen, while on the other hand, there is also a possibility that the upside will become heavy due to uncertainty.

Among automotive parts stocks, the one in the most difficult position is Denso. When the acquisition proposal was reported, Rohm's stock price soared, while Denso's stock price fell. This is thought to be because the market was wary of the size of the acquisition amount and the investment burden, even though the acquisition of Rohm makes strategic sense for Denso. With the emergence of these three-company integration talks, the view that part of the growth scenario Denso had envisioned might be shaken has also become easier to emerge. Denso emphasizes the semiconductor field as a core parts company of the Toyota group, but what the market is focusing on is not the growth strategy itself, but how much capital will be used and how much control can be secured. For this reason, a situation where all automotive parts stocks are bullish is not expected, and a development where wait-and-see continues, centered on Denso, is anticipated.

On the other hand, equipment stocks and material stocks are more likely to be conscious of medium- to long-term tailwinds. Stocks like Tokyo Electron and SUMCO are easily evaluated in that if integration progresses, power semiconductor production plans will be organized, making it easier to forecast capital investment and material procurement. In power semiconductors, unlike the miniaturization competition of cutting-edge logic semiconductors, stable mass production, yield, and quality control including back-end processes influence profitability. Therefore, benefits could extend to a wide range of companies, from front-end equipment and inspection devices to substrates and materials. Of course, Tokyo Electron's or SUMCO's earnings will not change significantly immediately just from this report. However, as a market theme, the view that even if the main players in the integration are the three semiconductor manufacturers, profit opportunities also extend to the equipment and materials sectors is natural.

Overall, the impact on stock prices this time is not unidirectional. The composition is that Rohm has mixed acquisition and integration expectations, Toshiba and Mitsubishi Electric are waiting for details, Denso is wary of investment burdens, and equipment and materials are seeing medium- to long-term expectations take the lead. What is important for business people and investors is not to judge by headlines alone. Depending on how the form of integration, equity ratios, capital investment amounts, and the organization of relationships with customers are shown in future disclosures, the stock price evaluation will change significantly. This news should not be considered the goal, but the entrance where the selection of related stocks will begin in earnest.

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