Denso, a major supplier to Toyota, has made a bid to acquire Japanese chipmaker Rohm in a deal that could be worth about $8.3 billion. If completed, the acquisition would strengthen Denso’s position in power management semiconductors, which are widely used in electric vehicles, electronics and data centers.

The companies confirmed that discussions are underway, but said no final decision has been made. Denso currently owns around 4.8% of Rohm and had already formed a strategic semiconductor partnership with the Kyoto-based company in 2023 to develop integrated circuits for EVs.

Power chips are a key area where Japan remains competitive in the global semiconductor industry, though the sector is fragmented and consolidation has been encouraged by policymakers.

Automakers have also been trying to secure chip supplies following the global semiconductor shortages during the COVID-19 pandemic.

The potential takeover, first reported by the Nikkei, comes amid heightened attention on semiconductor supply chains after disruptions at firms such as Nexperia affected production at automakers including Honda and Nissan.