By Ronnie Harui

Toshiba and electric-parts company Rohm will invest $2.69 billion in a venture to produce power devices, a move aligned with Tokyo's drive to ensure a stable supply of semiconductors in Japan.

The Japanese companies said Friday they will spend a combined 388.3 billion yen ($2.69 billion) to boost production capacity of silicon carbide and silicon power devices, components used for supplying and managing power in parts such as electric-vehicle powertrains.

The move is the first collaboration of the companies since Rohm took part in $13.5 billion buyout of Toshiba earlier this year.

Rohm, a maker of integrated circuits, semiconductors and other components, will cover Y289.2 billion of the investment along with subsidiary Lapis Semiconductor. Two companies under the Toshiba umbrella, Toshiba Electronics Devices & Storage and Kaga Toshiba Electronics, will invest Y99.1 billion.

The plan is supported by the Japanese Ministry of Economy, Trade and Industry, with the government to provide a subsidy of up to Y129.4 billion, the companies said.

The companies projected the market for power devices to grow amid rising demand from electric-vehicle makers for more efficient and lighter power electric powertrains, and for other companies seeking higher efficiency is in industrial applications.

Media reports of the plan ahead of its announcement sent Rohm shares higher earlier on Friday. They closed up 6.25%.

Citi Research analyst Takayuki Naito said the use of a government subsidy for a new silicon carbide factory, or the outsourced production of silicon carbide, could boost Rohm's capacity utilization and improve its cost competitiveness.

Write to Ronnie Harui at

(END) Dow Jones Newswires

12-08-23 0312ET