Not long ago, Toshiba Semiconductor announced the completion of the new 300-millimeter wafer manufacturing plant and office building for Kaga Toshiba Electronics Co., Ltd. (one of Toshiba's key group companies) located in Ishikawa Prefecture, Japan. Toshiba stated that the new factory aims to start mass production in the second half of the fiscal year 2024. Once the first phase of the project is fully operational, the production capacity of Toshiba's power semiconductors will be 2.5 times that of the investment plan established in the fiscal year 2021.
On December 20, 2023, Toshiba officially delisted, and those who have witnessed Toshiba's glory all feel that this may be the end of an era. However, the delisting is not an end for Toshiba. At that time, Toshiba's delisting was actually to get rid of the interference and control of external directors on the company's business decisions, and to completely reclaim the company's business decision-making power from foreign capital.
In 2015, Toshiba was exposed for long-term financial fraud, and its stock price plummeted, plunging the company into a severe financial crisis. In 2017, Toshiba spent a huge amount of money to acquire Westinghouse Electric Corporation in the United States, which was known as the "pioneer of nuclear power," but fell into huge losses as a result, and ultimately had to apply for bankruptcy protection, and the company's situation further deteriorated. By the end of the fiscal year 2016, Toshiba's financial situation had become so serious that its assets could not cover its liabilities, and its stock was downgraded from the main board to the small and medium board by the Tokyo Stock Exchange, with the risk of delisting looming.
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In order to save this crisis, Toshiba had to take extreme measures at the end of 2017 and introduce external funds of up to 600 billion yen (about 30 billion yuan). Although this measure temporarily saved the company from delisting, the price was that 70% of Toshiba's shares were held by foreign capital. The strong entry of foreign capital had a profound impact on Toshiba's management structure and operational strategy.
The introduction of foreign capital led to a sharp increase in the number of external directors of Toshiba.
At the worst, there were as many as 10 out of 12 directors who had the right to make business decisions, accounting for more than 80%. These external directors have different opinions and it is difficult to form a unified strategic direction, which has caused confusion within the company about "whose company this is." What's more complicated is that these external directors, while nominating directors, can even decide their own compensation, which has sparked dissatisfaction and questioning within the company.
A bigger problem is that these foreign directors are not really concerned about Toshiba's reconstruction, they are more concerned about short-term investment returns and profit improvement. According to insiders, when overseas shareholders exercise their right to speak, it often leads to chaos in Toshiba's business strategy and management order, seriously hindering the company's normal development and operation.
After choosing to delist, Toshiba said that it will focus on developing power semiconductors in the future. The semiconductor new factory mentioned at the beginning is the power semiconductor expansion announced by Toshiba in conjunction with the investment before delisting. Toshiba and Rohm will invest 99.1 billion yen and 289.2 billion yen respectively to build new factories and production lines in Ishikawa Prefecture and Miyazaki Prefecture, Japan. Toshiba is mainly responsible for the production of silicon-based power semiconductors, while Rohm is mainly responsible for the production of silicon carbide power semiconductors; Rohm's products will also be sold under the Toshiba brand.
01Layoffs of 5,000 People, Betting on Power Semiconductors
On April 17, 2024, Toshiba Corporation announced a major layoff of 5,000 employees.
Toshiba plans to integrate four business subsidiaries, including energy businesses such as power generation and nuclear power plants, infrastructure businesses such as railways, mechanical hard disk drive (HDD) businesses, and power semiconductor device businesses, as well as information technology (IT), into the parent company. By unifying redundant departments such as general affairs and finance, reducing superfluous personnel, Toshiba will be able to achieve effective integration and sharing of resources, and further improve operational efficiency and management level.
In the mid-term management plan released in May, Toshiba stated that this move is aimed at paving the way for the company's future development, putting an end to the chaotic situation of the past, while adjusting the cost structure to ensure more rational allocation of resources. Toshiba has also clarified the direction of its business resource concentration - that is, the fields of electricity and power semiconductors.
Toshiba has a total of about 67,000 employees in Japan, and this layoff scale accounts for a considerable proportion. This is also the largest scale of layoffs that Toshiba has taken since the exposure of the financial fraud incident in 2015. Such a decisive move also shows Toshiba's confidence and determination in power semiconductors.
Power semiconductors play a crucial role in the supply and control of electricity and are key equipment for improving the energy efficiency of all electrical equipment. Japanese semiconductor companies have always been at the forefront of the power semiconductor market. According to the research report "Latest Trends and Technical Trends in Power Device Wafer Market" published by Fuji Keizai, a Japanese market research company, the power semiconductor market is expected to grow by 23.4% year-on-year in 2024, reaching 281.3 billion yen. The global market size of the new generation of semiconductors made from silicon carbide and other materials will reach 34.579 trillion yen by 2035, an increase of 8.8 times compared to 2023.
In the field of power semiconductors, Japanese manufacturers including Mitsubishi Electric, Fuji Electric, Toshiba, Renesas, and Rohm have strong competitiveness globally and have been competing for layout in the power semiconductor field in recent years.
In 2023, Mitsubishi Electric announced a new investment in SiC power semiconductors. The company's new high-efficiency SiC power semiconductor samples for electric vehicles will extend the driving range of electric vehicles by 5-10%. Since the mass production of electric vehicle power semiconductor modules by Mitsubishi Electric in 1997, up to the fiscal year 2022 (from April 2022 to March 2023), Mitsubishi Electric modules have been applied to 26 million vehicles.
Fuji Electric will invest 200 billion yen in the semiconductor field over the three years from 2024 to 2026. The focus will be on power semiconductors used for electric power control of pure electric vehicles (EVs), and plans to build a new production line for silicon carbide (SiC) power semiconductors in domestic factories to increase production capacity. The aim is to seize the continuously expanding demand and drive the next growth.
In April 2024, the 300mm power semiconductor production line of Renesas' Kofu factory was put into operation. Renesas Electronics invested 9 billion yen in equipment for the factory in mid-2022 and has now officially started operation. Renesas will start mass production of power semiconductors mainly based on IGBT in 2025, which will also double Renesas' current power semiconductor production capacity.It is not difficult to find that Japanese semiconductor manufacturers are accelerating the layout of power semiconductors, and behind this is their tension.
02
Who is rising in the power semiconductor market?
Part of the reason for the tension of Japanese semiconductor manufacturers comes from the rising power manufacturers in China.
According to the data from the China Business Industry Research Institute, the scale of China's power semiconductor market was about 1368.86 billion yuan in 2022, a year-on-year increase of 4.4%. It is predicted that the scale of China's power semiconductor market will grow to 1519.36 billion yuan in 2023, and will reach 1752.55 billion yuan in 2024. The rapid development of China's new energy automobile industry is the foundation of the development of China's power semiconductor market.
The automotive business of STMicroelectronics and NXP Semiconductors is an important source of the company's revenue. China is a must-compete place for automobile giants in both supply and demand, and such a soil naturally also breeds a considerable part of the local power semiconductor companies. Since 2024, China's power semiconductor companies have not stopped the pace of expansion, and there have been new developments in the power semiconductor industry chain manufacturers in May alone.
Power semiconductor epitaxial wafers
On May 18, the 8-inch silicon carbide epitaxial, chip project (life service facility area) of An Yifa Semiconductor was fully capped.
This project is a key project introduced by the Chongqing municipal government. The person in charge of Chongqing San'an said that the main plant of the project was capped in just over 5 months, and is currently undergoing interior decoration and equipment procurement. It is expected to be lit and put into production in August 2024, two months ahead of the original plan.
On May 19, the gallium nitride epitaxial wafer production project of Shaanxi Yuteng Electronic Technology Co., Ltd. has entered the production stage, and the products have been certified by Huawei Hisilicon and other customers, and is currently the only gallium nitride epitaxial wafer production enterprise in the western region. In 2021, the gallium nitride third-generation semiconductor epitaxial wafer project of Yuteng Technology was signed as a key municipal investment introduction project and settled in Tongchuan, Shaanxi, with a total investment of 680 million yuan. The project is planned to be invested in four phases, with a construction period of 4 years, and a total of 20 epitaxial production lines will be built and put into production; in October 2020, the project started construction.On May 25th, the capping ceremony of the EPC project for Chuzhou Semiconductor Epitaxial Material Industrial Park was successfully held. The Chuzhou Semiconductor Epitaxial Material Industrial Park project is a key project in the Nanqiao District of Chuzhou City, with a total investment of 5.5 billion yuan, covering an area of 250 acres, and a construction area of 180,000 square meters. After the completion of the project, it can achieve an annual output of 6.3 million epitaxial wafers.
In May, the opening ceremony of the Aetman Xiamen Epitaxial Factory of Aetman (Xiamen) Photoelectric Technology Co., Ltd. was held in the park. It was revealed that the factory will layout 14 MBE equipment, including 8 advanced 1400 model Hybrid-MBE.
Power Device IDM
On May 16th, Xinggan Technology completed the strategic shareholding investment by Beijing Jingneng Energy Technology Mergers and Acquisitions Investment Fund under Beijing Jingneng Group. Xinggan Technology focuses on the breakthrough innovation and research and development production of the third-generation semiconductor SiC power devices and power modules, and is committed to becoming a leading and internationally influential power semiconductor change leader in China. Xinggan Technology can provide support and services for 6-inch wafer special process technology.
On May 21st, Shi Lan Wei announced that it signed the "Strategic Cooperation Framework Agreement for the 8-inch SiC (Silicon Carbide) Power Device Chip Manufacturing Production Line Project" with the People's Government of Xiamen Municipality and the People's Government of Haicang District of Xiamen City in Xiamen. The three parties decided to build an 8-inch silicon carbide power device chip manufacturing production line in Haicang, with a total investment of about 12 billion yuan. The project plans a production capacity of 60,000 pieces/month, divided into two phases, and will achieve an annual production capacity of 720,000 pieces. The first phase of the project invests 7 billion yuan, with a monthly production capacity of 35,000 pieces, and is expected to achieve an annual output value of 7.5 billion yuan after reaching production; the second phase of the project invests 5 billion yuan, adding a monthly production capacity of 25,000 pieces, and is expected to achieve an annual output value of 4.5 billion yuan after reaching production. The first phase of the project can be completed and put into production before the end of 2025, and after the completion of the two phases, it will become the first 8-inch silicon carbide power device chip production line with completely independent intellectual property rights and the largest production capacity in China. The project has now completed the investment filing, and the project land has also been taken off the shelf. It will start construction in June, with the first phase expected to be in full production in 2028 and the second phase expected to be in full production in 2032.
Power Semiconductor Packaging
On May 10th, Xin Changzheng Technology's official microblog announced that its new energy electronic packaging and testing production line was successfully connected in Rongcheng, China on May 9th, and a grand opening ceremony was held. The project mainly builds a production and testing line for new energy vehicles/ photovoltaic power modules and the third-generation semiconductor material silicon carbide modules. After completion, the project can produce about 600,000 new energy vehicles and photovoltaic power modules/year, and about 500 power device testing equipment/year, achieving a value of 300 million yuan.
On May 20th, Anjian Semiconductor Power Semiconductor Module Packaging Project signed a contract with Haining, Zhejiang. The total investment of Anjian Semiconductor Power Semiconductor Module Packaging Project is 100 million yuan, which may create an automotive-grade IGBT and SiC module packaging production line. In April 2024, Anjian Semiconductor completed a C1 round of financing of more than 200 million yuan, and the funds raised in this round will be mainly used for the development and mass production of automotive-grade IGBT and SiC MOS product platforms, the expansion of automotive-grade IGBT and SiC module packaging production lines, the expansion of sales and other talent teams, and the increase of operational cash flow reserves.
On May 27th, Jiangsu Zunyang Electronic Technology Co., Ltd. held the foundation laying ceremony for the "Third-Generation Power Semiconductor Integrated Circuit Packaging Project". Zunyang Electronics' second phase project "Third-Generation Power Semiconductor Integrated Circuit Packaging Project" invests 265 million yuan to build production workshops and infrastructure; platform enterprises invest 998 million yuan to build production equipment. The project is expected to be fully operational in December 2027, with an expected annual sales revenue of about 1.1 billion yuan and an annual tax of about 70 million yuan after reaching production.
