Denso entered the shares of TSMC, and wanted to seek the dominance of the car CASE| Yue Reading Global

Reading Global(2022.03.02)

Denso entered a stake in TSMC Electronics and seeks to dominate the automotive CASE

Nihon Keizai Shimbun reported on the 2nd that Denso will invest in the first semiconductor plant built by TSMC in Japan. The aim is to purchase cutting-edge semiconductors with a power line width of about 10-20 nanometers in Japan. Through cooperation with TSMC, Denso will grasp the hegemony of the era of "CASE (Connected Cars, Autonomous Driving, Shared Cars, Electric Vehicles)" in automobiles.

Denso will invest JPY 40 billion in the capital increase of TSMC's semiconductor subsidiary in Kumamoto Prefecture. After Sony Group, which is preparing to contribute 57 billion yen, it became the third largest shareholder of the subsidiary of TSMC, holding about 10% of the shares. The new plant will be operational in 2024 to produce cutting-edge logic semiconductors for image sensors and MCUs. The total investment is expected to be JPY 980 billion.

Denso is the world's second-largest auto parts manufacturer, operating a wide range of products from engine parts to automotive air conditioners. He is also proficient in semiconductors for various automotive applications. Because the ECU (electronic control unit) that controls the engine and driver assistance functions is inseparable from semiconductors.

In 2020, Denso and Toyota jointly funded the establishment of a semiconductor research and development company and acquired Toyota's Hirose plant, which manufactures semiconductors. Denso also manufactures power semiconductors and sensors for inverters used in electric vehicles (EVs) and hybrid vehicles (HVs).

In addition, driving aids that automatically maintain a distance require a high degree of calculation. Logic semiconductors responsible for high-level computing are mainly purchased from semiconductor specialists. Denso invested 7.87% in Renesas Electronics in order to build relationships with professional manufacturers, and also invested a small amount in Infineon Technologies of Germany.

In the future, if autonomous driving and electric vehicles become widespread, the demand for more sophisticated semiconductor products, mainly logic semiconductors, will expand. Japan's Ministry of Economy, Trade and Industry predicts that with this technological advancement, the market for cutting-edge semiconductors for automobiles will expand to 1.39 trillion yen by 2030, three times that of 2019.

Game investment transactions will nearly triple in 2021, and blockchain games are in the ascendant

Forbes reported on the 2nd that the statistics of the commercial organization DDM Games Investment Review show that investment, IPOs and mergers and acquisitions around video games have set a new record for the second consecutive year in terms of transaction volume and transaction value, and behind the wave of transactions, investors hope to get a piece of the emerging blockchain game field.

The report shows that total game-related investments jumped from 406 deals in 2020 ($13.2 billion in total) to 765 deals ($38.5 billion in total), while IPOs even outpaced other types of deals, jumping from 10 IPOs and $20.6 billion raised in 2020 to 35 IPOs and $109.4 billion in 2021.

Joe Minton, president of DDM, said that DDM needs to add an additional 800 investors to the database of dealmakers due to the influx of investment in blockchain-related games, and caused the report to be released later than usual, but even without blockchain funding, 2021 is still a record year for the industry.

Another notable note is that today each transaction involves a much larger number of investors. In the 13 years that DDM tracked, traditional game investments averaged just 1.9 investors per transaction, compared to "about 15" for blockchain projects.

Minton believes that trading in the gaming space will almost certainly remain high in 2022. Large deals (or deal plans) that have emerged over the past few months include Take Two's acquisition of Zynga for $12.7 billion, Sony's acquisition of Bungie for $3.6 billion, and Microsoft's intention to buy Activision Blizzard for $69 billion. However, given the potential regulatory hurdles, these deals will not be completed until at least the second half of this year or 2023, or even at all. But the size of its deals already means that the overall market is heating up, and as competing companies try to scale up, it could spawn more similar deals.

South Korea's Hyundai Motor plans to invest $16 billion to promote the development of electric vehicles

Reuters reported that South Korea's Hyundai Motor Company said on the 2nd that it plans to invest about 95.5 trillion won ($79.21 billion) by 2030, of which about 19.4 trillion won ($16.1 billion) will be used in electric vehicle (EV)-related business.

Hyundai Motor said at a virtual investor day event that the company, along with subsidiary Kia, is among the top ten automakers in the world, with a goal of achieving a 7% market share in the global electric vehicle market by 2030, with an annual sales target of 1.87 million units.

The Seoul-based automaker said its goal is to achieve operating margins of 10 percent or more in its electric vehicle business by 2030.

However, analysts said Hyundai's $16 billion investment in the electric vehicle business would not be seen as a "radical" approach compared to competitors, adding that the investment could easily dwarf that of larger competitors, including Toyota Motor Corporation. Toyota plans to invest 8 trillion yen ($69.43 billion) in electrification by 2030.

Hyundai CEO Jang Jae-hoon said the company was considering building a new dedicated electric vehicle production plant, but did not disclose details of the new plant, including location and timeline.

Analysts say Hyundai will focus on building a dedicated electric vehicle factory in the U.S. because the company sees the U.S. as its key electric vehicle market.

Netflix proposed to buy a Finnish game studio

Reuters reported that Netflix has proposed to acquire the publicly listed Finland's Next Games, a mobile game company said in a statement on the 2nd.

"We are thrilled that Next Games has joined Netflix as a core studio in strategic areas and key talent markets, expanding the capabilities of our in-house game studios," said Michael Verdu, Netflix's vice president of games.

Shares of Next Games surged 119 percent to 2.04 euros.

After entering the mobile gaming market last November, the streaming giant is now planning to invest 65 million euros ($72.08 million) in Next Games, the statement said. Next Games' Board of Directors unanimously recommended that shareholders accept the offer.

The bid means Next Games shareholders will receive €2.10 per share in cash, more than double the share's closing price of €0.93 on the North First North stock exchange on the 1st.

The two companies said they expected the deal to close by the end of June.

(This article is compiled from Nihon Keizai Shimbun, Forbes, Reuters)

Economic Observation Network intern reporter Zhou Yuqing sorted out