Toshiba Transfers Power Module Biz to Mitsubishi

Online staff -- Electronic News, 6/17/2004

In a deal aimed at bolstering the strengths of each company, Toshiba Corp. said it is in ongoing negotiations to transfer a majority of its high capacity power module business, which accounts for a small portion of its power transistor business, to Mitsubishi Electric Corp.

With the final agreement expected in about three months' time, the transfer would include product development, design, manufacturing and marketing of high capacity power module products, but will not include products for automotive use, high voltage modules or other related products, the companies said today. The high voltage modules to be used by Toshiba's Industrial and Power Systems and Services Co. will continue to be supplied by Toshiba.

In other efforts to focus and concentrate on its core competencies, Mitsubishi Electric spun-off its system LSI and system memory businesses in its joint venture with Hitachi, to form Renesas Technology Corp.

This business strategy enables Mitsubishi Electric to concentrate resources on power semiconductors and high-frequency optical devices and to achieve synergies within its business, the company said. Specifically, Mitsubishi Electric has been concentrating on its Insulated Gate Bipolar Transistor (IGBT) module business in inverter controller equipment for consumer products and industrial equipment, and in new areas such as hybrid cars. Mitsubishi said the business transfer from Toshiba would strengthen its module business by combining the technologies.

In Toshiba's case, its semiconductor business consists of discrete semiconductors, system LSIs and memories, supplemented by its ability as an IDM with design, development and production integration capabilities. Due to Toshiba's focus on power transistors, which account for 40 percent of its total discrete business -- about $2 billion in 2003 -- contributed to the business transfer decision.

The worldwide demand for power semiconductors is expected to rise due to increasing demand for energy-saving products such as hybrid cars, solar-power generators, wind-power generators and inverter control devices for consumer electronics and industrial equipment. At the same time, worldwide market conditions are becoming increasingly severe as specialist manufacturers from Europe and North America become more competitive.

The companies said they had each been developing power semiconductor businesses independently but realized that concentrating on their areas of specialty would further both companies' competitiveness.