Concentrating investment on power semiconductors and power electronics (2010)

Reading again what exactly was concentrated

A president who said he “came up through devices, so I know the fear of overinvestment” pulled forward a $569.7M (¥50bn) capacity expansion, stacked equipment into the Matsumoto and Suzuka plants, and finally went as far as a $1.4B (¥212bn) partnership with Denso. What this concentration reduced was not the number of businesses. Heavy electricals, vending machines and instrumentation were all kept; only the destination of investment and technical development was tilted toward power semiconductors and power electronics. Holding the breadth of a general electrical maker while narrowing the earnings engine to one is a different kind of choice from a focus that discards breadth.

Demand at the chosen destination, though, has not risen smoothly. SiC fell short of the medium-term plan as battery-EV growth slowed, and inventory adjustment in automotive electronics persists. The company’s global share is 6.1%, and the gap with Infineon’s 25.2% has not narrowed. That record profits continued anyway appears to owe to power electronics having several outlets beyond semiconductors — a 40% domestic share in uninterruptible power supplies for data centres, and grid-scale storage batteries among them. How well concentration works depends on the altitude at which the axis is defined.