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Mar 3rd, 2011
Mitsubishi Electric targets European markets
The Japanese conglomerate explains that the German power module manufacturer Vincotech it has acquired is highly complementary to its existing operations, and gives it access to the rapidly growing European photovoltaic market.
On November 30 2010, Mitsubishi Electric announced that it had agreed to purchase German power electronics group Vincotech. At first glance, the deal might look curious. Why is the Japanese semiconductor giant interested in a comparatively small manufacturer and distributor of power modules? The answer is perhaps the best one possible for such an acquisition: the two companies have highly complementary businesses.
“Mitsubishi Electric is currently working to strengthen its business in the European markets, particularly in the fields of low power industrial equipment and renewable energy such as photovoltaics,” a spokesperson for the company told Power Dev’. “Vincotech has strong capabilities in these fields, which we believe will greatly contribute to the implementation of our business strategy.”
For photovoltaics in particular, Europe has seen a boom in solar power installations that has swept across Germany and Spain, and which is now steadily spreading into Italy. Europe added around 15 GW of photovoltaic power generation capacity in 2010, out of a global annual total of 18 GW, according to Yole Développement. Germany alone installed more than 7 GW photovoltaic capacity in 2010, essentially matching the total installation figure for the entire world in 2009. So, for any power electronics company seeking to take advantage of rapid growth in the photovoltaics market, investing in a German base looks a very shrewd move.
Vincotech boasts at least nine different solar inverter formats, all of which exploit insulated-gate bipolar transistors (IGBT) that are a particularly strong focus of Mitsubishi Electric’s semiconductor technology. In fact, Mitsubishi Electric has been shipping its sixth generation IGBT chips since 2009 which, at the time, it claimed allowed it to produce IGBT modules with the lowest switching power loss in the industry.
This was possible because the sixth generation IGBT has a trench interval of 2.4 μm pitch, narrowed from the 4 μm pitch in the previous generation. Having more transistor cells integrated into an IGBT chip allows electrical current to flow more easily. Shrinking the IGBTs’ trench intervals allows more transistor cells to fit into a given area, therefore reducing on-resistance by approximately 20 percent. However, narrowing the trench interval also raises the threshold voltage, which is linked to the transistor’s ability to withstand shortcircuits.
However, Mitsubishi Electric introduced high-energy ion implantation technology in its sixth generation device. In this way it was able to improve the consistency of its manufacturing and therefore retain the same safe current density characteristics as its fifth generation devices.
Historically, Vincotech has used IGBTs from Infineon in its power modules, which might now be expected to change. Yet, at the moment, the Japanese owners are prepared to let its latest subsidiary keep a measure of its independence.
“There are no plans for Vincotech to become a manufacturing facility of Mitsubishi Electric brand products yet, but all kinds of possibilities will be considered,” the spokesperson said. The Japanese power device producer and its German acquisition’s diverging focuses on different areas of the industry demonstrate an especially key difference between them. Mitsubishi Electric has been almost exclusively focussed on middleand high-power markets. Meanwhile, Vincotech has specialised in niches, the Japanese company’s
Mitsubishi Electric has boosted the efficiency of its power devices by shrinking the dimensions of its IGBT cells.
“With the acquisition of Vincotech, we will be able to enrich our line-up of packages that will allow us to meet the various needs of our customers.” In many ways it would seem logical for Mitsubishi Electric to now try and exploit the benefits of its brand name to help raise Vincotech’s profile in its low-power device markets. However, even here the Japanese company’s respect for its German counterpart’s current approach holds true.
“For the time being, both the Mitsubishi Electric and Vincotech brands will be kept,” Mitsubishi Electric said. “The two companies will each sell products in their own brands. There is no particular schedule that the two brands be merged at the moment. Business negotiations will be conducted separately, but we plan to collaborate through sharing customer information and other data for the time being.”
By combining these different layers of complementarity, Mitsubishi Electric appears to believe that its investment in the German company will pay significant rewards. Although Vincotech’s revenues at December 2010 were estimated at €57 million ($77 million), the Japanese company expects this acquisition to help its power device division achieve sales of a ¥40 billion ($480 million) by 2016. “Mitsubishi Electric’s power device business intends to raise its mid-term sales target to ¥190 billion (€1.68 billion, $2.28 billion) in the fiscal year ending March 2016, from the current target of ¥150 billion,” the company’s spokesperson said. “That’s increasing from this fiscal year ending March 2011, in which the power device business plans to reach sales of ¥112 billion.”
Moving from its fifth to its sixth generation IGBTs allowed Mitsubishi Electric to improve their efficiency by around 20 percent (Courtesy of Mitsubishi Electric)
Vincotech is not the only investment that Mitsubishi Electric had made in 2010. It is also spending ¥6.5 billion to expand its wafer production capacity for power devices by approximately 2.5 times by April 2011. In parallel with that, it also invested ¥3.5 billion to increase its assembly and testing capacities. The result is an organization prepared to meet what it calls “soaring” demand for power devices. This is driven, the company says, by strengthening of environmental policies across the world that include increased deployment of renewable energy, but also an influence in many other sectors too.
“Mitsubishi Electric’s facility manufacturing 8-inch wafers is not just for the renewable energy industry,” the company spokesperson said. “Mitsubishi Electric develops and markets power modules for a variety of industrial machinery, trains, hybrid and electric vehicles, inverter-equipped home appliances – and the renewable energy industry based on solar and wind power generation technology. And all the markets are growing more every year worldwide. Therefore, Mitsubishi Electric thinks that all our power devices are important, and will continue supplying products that are valued by customers.”
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