The industry ministry said Friday it will provide aid of up to ¥70.5 billion to auto parts maker Denso and Fuji Electric for the joint production of power semiconductors.
With the world aiming to promote decarbonization, demand for power semiconductors, used in electric vehicles and other products, is expected to grow. By supporting the two companies, the ministry hopes to strengthen domestic production.
The total cost for the Denso-Fuji Electric joint power chip business is seen reaching ¥211.6 billion.
Denso will expand two facilities to produce substrates for next-generation power semiconductors using silicon carbide (SiC) that can help reduce electricity consumption significantly. One of the two footholds is in the town of Kota in Aichi Prefecture and the other in the city of Inabe in neighboring Mie Prefecture.
Fuji Electric will expand its plant in the city of Matsumoto, Nagano Prefecture, to manufacture SiC power semiconductors.
Through the collaboration, the companies aim to produce 310,000 units of SiC power semiconductors annually. They will start supplying the chips in May 2027.
Power semiconductors can control electric current and voltage. They are used in products such as consumer electronics and industrial machinery, as well as EVs.
Although Japanese companies have a large share of the global power semiconductor market, production volume per maker is smaller compared with European and U.S. peers.
The Japanese government is urging domestic companies to promote power semiconductor-related tie-ups, limiting its financial aid to projects involving investments of ¥200 billion or more.
In December 2023, it decided to provide up to ¥129.4 billion for joint power semiconductor production by Toshiba and Rohm.