Denso bullish on business prospects as it tackles chip shortages

TOKYO (Reuters) – Denso Corp, Japan’s most significant auto supplier, was bullish about its prospects in a company presentation on Wednesday as demand from customers for automotive chips expands and it tackles semiconductor shortages that have pissed off Toyota Motor Corp, its most important shareholder and consumer.

Main Technologies Officer Yoshifumi Kato stated Denso expects demand for car chips to be all-around a 3rd greater by 2025 than it was in 2020, as the vital component is ever more utilised in fossil-gas autos, electric powered motor vehicles and autonomous travel know-how.

That rising need has put together with COVID-19 pandemic supply-chain disruptions and enhanced competitors for chips from shopper electronic makers to lead to persistent shortages that have compelled Toyota and other important carmakers to suppress output even as auto need grows.

Toyota mentioned final week that worldwide creation in April was 9.1% lower than a 12 months earlier.

Denso, which specialises in vehicle air conditioning, electricity trains and automatic driving units, has responded to chip shortages with partnership deals aimed at securing access to important components.

In February it agreed to buy a 10% stake in a chip plant currently being crafted in Japan by Taiwan Semiconductor Producing Co (TSMC) with Sony Team that will be manufacturing 55,000 12-inch wafers a thirty day period from 2024.

That deal, Denso says, will enable it procure microcontroller chips.

The plant on Kyushu island, which Japan’s govt is serving to establish as part of a system to keep away from ingredient shortages that could hurt economic progress, will also make chips for a close by Sony impression sensor factory.

In April, Denso also explained it would collaborate with United Microelectronics Corp to create semiconductor wafers in Japan in buy to bolster output of energy and analog chips.

Denso forecast on Wednesday that sales of all those in-dwelling semiconductors would develop by a fifth to 500 billion yen ($3.9 billion) in 2025.

($1 = 129.2300 yen)

(Reporting by Tim Kelly Modifying by Jacqueline Wong)