Japan’s Ministry of Economy, Trade, and Industry (METI) has agreed to provide subsidies worth up to JPY70.5bn (US$470m) to Denso Corporation, Toyota Motor Corporation's main auto components supplier, and Fuji Electric Company, to support the expansion of their silicon carbide (SiC) power semiconductor operations.

Power semiconductors are used in electrified vehicles (EVs) and other products and they are essential for the efficient supply and use of electric power. Compared with traditional silicon semiconductors, SiC power semiconductors deliver superior performance under high-temperature, high-frequency, and high-voltage conditions, while significantly reducing electricity consumption. Demand for these components is rising rapidly as governments around the world implement decarbonization policies.

The subsidies are aimed at helping to "develop and strengthen frameworks for the supply of SiC semiconductors" in Japan. Total investments by the two companies are expected to reach JPY 211.6bn (US$1.4bn) and are scheduled to be completed in the first half of 2027.

Denso plans to expand two facilities to produce substrates for next-generation SiC power semiconductors. Its facility in Kota, Aichi prefecture, will be expanded for the production of epitaxial wafers, while new facilities in Daian, neighboring Mie prefecture, will produce SiC wafers.

Fuji Electric plans to expand its plant in Matsumoto, Nagano Prefecture, to manufacture SiC epitaxial wafers and SiC power semiconductors.

Fuji Electric said in a statement: “Through this partnership, the companies will contribute to the development of semiconductor supply frameworks within Japan and to the improvement of the international competitiveness of Japan’s domestic semiconductor and automotive industries.”