Copy of Discussion with Outside Directors [Part 3]

Aiming to further enhance governance to become a major global player

What issues do you think ROHM should tackle as it aims to become a major global player?

Nagumo: The world currently has a negative outlook and is tending to take unassertive way of thinking about things. ROHM must avoid doing this and do what must be done for the future. It is important to invest without fear, be more proactive toward development investments, and be so encouraging of taking on new challenges as to allow failures. When it seems that the world economy may falter is the time to have the courage to step forward and do things that competitors may not.

Kenevan: Although we tend to focus on the results in front of us, we need to take a step back and look at the industry as a whole. Because ROHM is smaller than its competitors, its position will become quite weak if the industry consolidates over time. In the world of semiconductors, scale is key. Although the Company currently handles product categories where scale is not such an issue, investments must be made in construction of manufacturing sites, human capital recruitment for development centers, and even M&A in some cases to gain an advantage in terms of scale. Because investors also ask questions about quarterly performances while silently wondering whether the company is growing and how it will develop the capital they invested, I believe that aiming to become a major global player in the medium to long term, a strategy to expand the Company, is best.

Nagumo: In the tire industry that I was a part of, the big three players are so dominant that other companies cannot even hope to compete in the market for passenger vehicles. The company I was at specialized in tires for agricultural machinery, a niche yet essential field. It acquired companies in places such as India and Sweden, and was able to build an unprecedented portfolio which led to its success. As Mr. Kenevan said, although ROHM cannot best its competitors in terms of scale, I believe it is important to utilize its distinguishing features and create advantages that are second to none.

Kenevan: Precisely. Whether it be investment in manufacturing sites or M&A, there must be a clear strategy or path to victory. Fortunately, ROHM has such clarity. It is correct to focus on power devices, devices for various applications, and SiC technology. It is also important to consider how to control the supply chain, increase the appeal of products, and clearly decide what not to do. ROHM is currently in the middle of preparing investments for organic growth and M&A, and the Board of Directors bears the heavy responsibility for investment decisions. The Company is considering M&A responsibly and strategically and will tactically conduct negotiations and implement action plans to secure the human capital needed after making acquisitions, and I hope that the Board of Directors will help to promote these efforts in a disciplined manner.

Part 1 can be read here!

Part 2 can be read here!

ROHM Integrated Report

The ROHM Integrated Report special web page also introduces other contents related to ROHM's management and financial strategies.

https://www.rohm.com/ir/library/rohm-group-integrated-report