Shares of Rohm witnessed a significant increase on Friday morning following media reports of a collaboration between Rohm and Toshiba for the manufacturing of power semiconductors. The stock price of Rohm rose by 6.3% to reach 2,845.0 yen, touching its highest level since October 17.
According to the reports, both Japanese companies are planning to invest a combined amount of Y380 billion ($2.64 billion) to enhance their production of power chips. The Ministry of Economy, Trade and Industry in Japan is expected to subsidize approximately Y120 billion for this initiative.
Citi analyst Takayuki Naito commented in a research report, stating that if these reports turn out to be true, it is likely to have a positive impact on Rohm's share price. Naito further added that the utilization of a government subsidy for a new silicon carbide factory or the outsourcing of silicon carbide production could potentially increase Rohm's capacity and improve its cost competitiveness.
Additionally, the potential merger of Rohm and Toshiba's operations might generate expectations of higher sales in the silicon power semiconductor market.