Japan's Ministry of Economy, Trade, and Industry (METI) has announced a subsidy program totaling up to JPY70.5 billion (US$470.34 million) for the SiC power semiconductor production collaboration between Denso and Fuji Electric. The joint project, valued at JPY211.6 billion, will receive one-third of the total investment in government funding.
Government support drives semiconductor expansion
On November 29, 2024, METI revealed a JPY101.7 billion funding initiative to support eight strategic projects, with the Denso and Fuji Electric collaboration for SiC power semiconductor production receiving the largest share, according to Bloomberg and Nikkei.
The ministry is also funding projects to expand capacity for semiconductor materials, equipment, and advanced electronic components used in communication technologies. The initiative is part of Japan's supplementary budget for fiscal year 2023 (April 2023 - March 2024) under the economic security fund.
Japan strengthens domestic chip production
At a November 29, 2024 press conference, Economy, Trade, and Industry Minister Yoji Muto emphasized that these measures aim to strengthen Japan's semiconductor supply chain resilience.
The Japanese government has increased support for the domestic semiconductor sector as part of its economic security strategy. Despite growing demand for power semiconductors in industries like electric vehicles (EVs), Japanese manufacturers face strong competition from global leaders such as Germany's Infineon and US-based Onsemi.
The government acknowledges that Japan's semiconductor manufacturers are fragmented with relatively low market share, prompting its focus on industry consolidation to overcome these challenges and secure future growth.
Partnership targets EV market expansion
In December 2023, Toshiba and Rohm announced a joint venture to produce power semiconductors, securing JPY129.4 billion in METI subsidies—approximately one-third of the JPY388.3 billion total investment. The new Denso-Fuji Electric collaboration follows this strategic direction, focusing on SiC semiconductor production for EVs.
In the partnership, Denso will produce SiC substrates and epitaxial wafers, while Fuji Electric will manufacture SiC epitaxial wafers and power semiconductors.
Denso is expanding facilities in Kōta, Aichi Prefecture, and Inabe, Mie Prefecture, while Fuji Electric is upgrading its Matsumoto factory in Nagano Prefecture. The project targets an annual wafer production capacity of 310,000 by May 2027.
Strengthening the supply chain, Denso invested US$500 million in Silicon Carbide LLC, a Coherent Corp. subsidiary, acquiring a 12.5% equity stake in 2023.
Fuji Electric plans to invest JPY180 billion in its semiconductor business over the next three years, a 15% increase from its previous three-year investment plan.
With rising demand for SiC products in EV and solar energy applications, Fuji Electric aims to increase its SiC-based product portfolio. The company plans to expand SiC modules from their current 1% share of semiconductor sales to 20% by March 2027.
