Editor’s Note
As AI drives unprecedented data center growth, a critical bottleneck emerges: chronic power shortages. This feature examines how power semiconductors are gaining renewed attention as essential components for managing energy consumption in an increasingly power-hungry digital infrastructure.
With the development of AI and other technologies, the data center market is rapidly expanding, but behind this lies the worsening problem of chronic power shortages. In this context, power semiconductors, which suppress power consumption, are once again drawing attention.
With the advancement of digital technologies, including artificial intelligence (AI), the construction of data centers (DCs) is proceeding one after another. According to the “Information and Communications White Paper” published by the Ministry of Internal Affairs and Communications in July 2025, the market size of domestic DC services is projected to grow from 2.7361 trillion yen in 2023 to 5.0812 trillion yen in 2028. However, operating servers and other equipment requires a large amount of electricity, and behind the rapid growth of the DC market, the problem of chronic power shortages is becoming more serious. Amidst this, “power semiconductors” that control current and voltage are once again gaining attention as a technology to suppress power consumption, making related stocks worth watching.
Compared to general semiconductors, power semiconductors are electronic components designed to efficiently control and convert larger amounts of power. Because they can significantly reduce power loss, they are used in home appliances, as well as in electric vehicle (EV) motors and batteries, and solar power generation.
According to data published by the Organization for Cross-regional Coordination of Transmission Operators (OCCTO) in January of this year, Japan’s domestic electricity demand (at the point of use), which had been on a declining trend until FY2023, is expected to shift to an increasing trend from FY2024, reaching approximately 846.1 billion kilowatt-hours in FY2035, a 5.3% increase compared to FY2025. While various factors are related to the increase in electricity demand, it is pointed out that the new construction and expansion of DCs and semiconductor factories are major factors.
To achieve the rapid development of DCs, which require massive amounts of power, effective coordination between power and communications (watt-bit coordination) is crucial. The “Watt-Bit Coordination Public-Private Council Summary 1.0” published by the Ministry of Economy, Trade and Industry and the Ministry of Internal Affairs and Communications in June 2025 clearly states the policy of developing both infrastructures and creating new multiple large-scale DC aggregation hubs for the efficient operation of computing resources. Clear targets have also been set in terms of energy efficiency, requiring newly established DCs to achieve a PUE (Power Usage Effectiveness) of 1.3 or less within two years of commencing operation from FY2029 onward.
Although the business environment for power semiconductors has been tough due to the struggles in EV sales, which were expected to be a driver of demand, from a long-term perspective, demand for applications like renewable energy is expected to grow steadily due to the global trend towards decarbonization. Increased investment in DCs is also likely to provide a tailwind, with demand expected to expand for products using silicon carbide (SiC) and gallium nitride (GaN), which have high energy-saving effects.
On January 20, Torex Semiconductor <6616> [TSE Prime] announced the development of a power semiconductor resistant to inrush current and surge current. In addition to the fast switching characteristics and low-loss performance unique to SiC devices, the design is said to have ample margin during startup and inrush current events.
On January 5, Shindengen Electric Manufacturing <6844> [TSE Prime] announced the completion of the acquisition of all shares of a newly established company that will inherit the SiC power semiconductor business of Kyocera <6971> [TSE Prime] through a corporate split. The company aims to use this synergy as a driving force to enhance the group’s corporate value and achieve sustainable growth.
On December 18, Maipox <5381> [TSE Standard] revealed that it has started evaluation support for 8-inch SiC wafers with its “XS-1 Sirius” system, which visualizes the through-dislocation profile existing inside semiconductor crystal wafers with high sensitivity and in real-time.
On December 17, Samco <6387> [TSE Prime] announced the development of equipment that enables precise etching control at the atomic layer level. It is said to achieve nanometer-level precise control and ideal interface formation in processes like GaN device fabrication, leading to further performance enhancement of GaN power devices.
On December 9, Asahi Kasei <3407> [TSE Prime] revealed that its research group with Nagoya University has realized a high-electron-mobility transistor (HEMT) using GaN on an aluminum nitride substrate, demonstrating over twice the withstand voltage performance and lower resistance compared to conventional methods.
On August 20, Noritake <5331> [TSE Prime] revealed the development of a polishing pad for GaN wafers. This product, utilizing a proprietary technology that combines organic and inorganic materials, can be used in strongly acidic environments, with a polishing speed 30 times faster and a pad lifespan over 15 times longer than conventional ones.
Furthermore, stocks related to diamond semiconductors are also worth watching. Diamond is called the ultimate power semiconductor because it has many superior characteristics, such as higher indices for power semiconductor performance (Baliga performance index) and suitability for high-frequency devices (Johnson performance index) compared to SiC and GaN, and it does not lose its semiconductor properties even in high-radiation environments.
Related stocks include Sumiseki Holdings <1514> [TSE Standard], whose group company is engaged in the manufacture and sale of industrial synthetic diamonds; J-tec Corporation <3446> [TSE Standard], which offers plasma-assisted polishing equipment used in the polishing process of diamond substrates; Sumitomo Electric Industries <5802> [TSE Prime], which handles synthetic diamond single crystals; Fuji Die <6167> [TSE Prime], which sells tools used in the manufacture of synthetic diamonds; and Takatori <6338> [TSE Standard], a manufacturer of precision cutting machines for hard and brittle materials.
Recently, on the 2nd, EDP <7794> [TSE Growth] announced, as a research result with the National Institute of Advanced Industrial Science and Technology (AIST), the fabrication of a wafer for diamond devices that can be processed with general-purpose semiconductor manufacturing equipment. They found that thermal strain caused by the difference in thermal expansion between diamond and silicon can be suppressed by increasing the bonding temperature, successfully developing a diamond/silicon composite wafer that is strongly bonded with minimal warpage.