Mitsubishi Corp, in which Warren Buffett’s Berkshire Hathaway holds an 8.3% stake, is contemplating a bid for Fujitsu’s chip packaging subsidiary, Shinko Electric Industries, marking its potential entry into semiconductor manufacturing. Mitsubishi has assembled a team to evaluate opportunities in the ‘back-end manufacturing process,’ which encompasses mounting chips, wire connections, and packaging.
The Fujitsu division, Shinko Electric, is estimated to be worth about $2.6 billion and is currently up for sale. Interest in this bid is not limited to Mitsubishi, as buyout firms like Bain Capital, KKR, and Apollo Global Management, as well as Japan Investment Corp, have also reportedly expressed interest. Mitsubishi is considering a joint bid with one of these entities, although discussions are at an early stage and no final decision has been made.
Mitsubishi has confirmed the establishment of a division to explore opportunities in the chip and materials sector. However, they have refrained from commenting on individual deals. Fujitsu indicated its consideration of various options to maximize the value of the independent business but stressed that no decisions have been reached yet. Shinko Electric has declined to comment. Two sources familiar with the matter, who have requested to remain anonymous, cautioned that the deal’s completion is not guaranteed.
The potential sale of Shinko Electric, a key supplier to firms such as Intel and Advanced Micro Devices, could also be subject to national economic security considerations. For Mitsubishi, which has a broad business portfolio spanning natural gas, convenience stores, clothing, and more, this move into the chip sector would come amid recent energy price volatility. It would bring one of Japan’s corporate giants into the semiconductor field at a time when Japan is striving to reinvigorate its aging semiconductor industry that once led the world in the late 1980s. Nonetheless, Japan remains a strong player in semiconductor packaging, with Shinko Electric, Ibiden, and Toppan Holdings being significant contributors to the global chip supply chain.
The country has allocated substantial subsidies to bolster its capacity to produce advanced chips and retain its status as a leader in materials and manufacturing tools for ‘specified critical materials.’ This initiative is part of Japan’s broader strategy to stimulate chip manufacturing. Several chip investments have been announced recently, including a $7 billion chip plant by Taiwan Semiconductor Manufacturing Co on Kyushu island, a chip plant in Chitose funded by Japan’s state-backed Rapidus, and the provision of subsidies worth around 15 billion yen for Samsung Electronics for potential chip facilities.