“We have to think about whether the time will come when we sell semiconductors, alone, externally,” said CTO Yoshifumi Kato in an interview at Denso’s headquarters in Aichi Prefecture on Friday. “It is worth investigating whether such a structure is possible,” he said.
Today, the semiconductors that Denso makes in-house go into auto parts that it then sells to automakers or other suppliers. In exploring the possibility of self-supplying semiconductors, Denso will consider whether its semiconductor division is better positioned outside the company, Kato said.
To date, nothing has been decided on a split, Kato said, adding that Denso is focused on meeting internal demand for chips for now. The company is also not currently considering using a potential spin-off from its chip business to raise new funds for other investments, he said.
A shortage of chips used in cars first started in late 2020, when Covid-induced lockdowns of millions of people around the world sparked a huge surge in consumer electronics purchases, diverting semiconductors away from automakers. Their lack quickly became symptomatic of a wider supply chain crisis that has turned the smooth delivery of goods worldwide upside down.
Chip supply now appears to be returning to normal in some places, amid concerns about how well consumer demand can hold up against a backdrop of rising inflation and higher interest rates.
According to Kato, the demand for automotive semiconductors, which is on the decline amid the industry’s shift to electric, Internet-connected and autonomous cars, is only likely to grow.
Denso said at a briefing earlier this month that it is targeting yen 500 billion in revenue from its internal power and analog chip businesses, up from about 420 billion yen today.