By Ronnie Harui
Rohm’s shares climbed Friday morning following media reports that Rohm and Toshiba plan to jointly manufacture power semiconductors.
Shares of Rohm were recently 6.3% higher at 2,845.0 yen after earlier touching Y2,899.5, the highest intraday level since Oct. 17.
The two Japanese companies reportedly plan to spend a combined Y380 billion ($2.64 billion) to increase their production of power chips, with Japan’s Ministry of Economy, Trade and Industry likely to subsidize up to around Y120 billion, according to the media reports.
“If the reports are to become reality, this development is likely to bolster Rohm’s share price,” Citi analyst Takayuki Naito said in a research report.
The use of a government subsidy on a new silicon carbide factory, or the outsourced production of silicon carbide, may boost Rohm’s capacity utilization and improve its cost competitiveness, Naito said.
Also, an eventual merging of the operations of Rohm and Toshiba might spur expectations of higher sales in the silicon power semiconductor market, he said.
Write to Ronnie Harui at firstname.lastname@example.org
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