Denso and Mitsubishi invest USD 1 billion in Coherent
Japanese companies Denso and Mitsubishi have joined forces in a new sector. It is a USD 1 billion investment in silicon carbide production. Coherent received the investment from the companies in exchange for some shares. Denso and Mitsubishi each invested USD 500 million, giving them 25% of the company’s shares.
Following the transaction, Coherent’s US business, based in Pennsylvania, will remain 75% owned and managed by Coherent. The company will continue to operate as an independent subsidiary. Following the announcement of the agreement, Coherent’s share price rose 13% to USD 31 per share on the New York Stock Exchange. This gave Coherent a market value of USD 4.7 billion.
Under the terms of the agreement, Coherent has the right to sell another part of its Silicon Mining business within six months of closing, generating an additional USD 500 million. In addition, the company can enter into new product supply agreements.
It is worth noting that the US company’s raw materials are in high demand. Silicon carbide is more efficient for electronic devices than the silicon chips traditionally used in this sector. In electric cars, for example, silicon carbide can reduce charging time and increase range. Popular electric car manufacturers, including Tesla Corporation, use this element.
Denso business overview
Denso is a Japanese manufacturer of components for the automotive industry. The company supplies the global market with:
– ignition systems;
– sensors and navigation systems;
– control and air conditioning systems;
– oil filters;
– vehicle management software.
The company was established in 1949. It has subsidiaries in various countries, including Korea, Taiwan, Brazil, the UK, India, Sweden, and the UAE. It is one of these companies, Denso Wave, that is responsible for creating the QR code.
Mitsubishi business overview
Mitsubishi is one of Japan’s first zaibatsu, the country’s largest industrial companies. It includes both manufacturing and financial companies. It’s involved in automobile, aircraft and shipbuilding. It also owns steel mills and chemical plants. The Tokyo-based company is also part of Mitsubishi.
Coherent business overview
The US company has been in business since 1966 and is a major supplier of laser technology. Its products include:
– sensors for measuring laser energy;
– radiation measurement systems;
– lasers;
– fibre optic components.
Recent interest in Coherent has come from silicon carbide production. The market for this chemical compound is forecast to grow from USD 3 billion today to USD 21 billion by 2030.
