TOKYO -- How does an underdog American supplier break into a Japanese market dominated by a homegrown rival?
In the case of Freescale Semiconductor Inc., it goes racing with the most Japanese of Japanese automakers in one of the most Japanese of Japanese cars: the Toyota Prius hybrid.
Freescale, of Austin, Texas, is backing a V-8 Prius hybrid in the Super GT racing series, Japan's premier grand touring car circuit. Toyota is using the series to test the use of supercapacitors, instead of lithium ion batteries, as potential power packs for future hybrids.
Freescale hopes to leverage an opportunity created when Japan's 2011 earthquake drove home the need to dual source auto parts, right down to microchips. Japanese carmakers were shut down for months when the quake slashed output of critical chips supplied by market leader Renesas Electronics Corp., of Tokyo.
"Dual sourcing is industry policy now," Freescale Japan President David Uze said at a recent launch party for the Prius racing team. "Whom else are they going to pick beside Freescale?"
Globally, Freescale is the No. 2 supplier of automotive microchips, which control everything from power windows to gear shifting. Freescale's market share is 18 percent, behind the 43 percent held by Renesas, according to Strategy Analytics.
In Japan, its share is even smaller. But Uze expects to boost that as automakers seek double sourcing of microcontrollers so they won't be caught short again.
Demand is growing quickly as today's cars pack in more high-tech electronics. The global market for auto microcontrollers was $6.2 billion in 2013, and it is expected to post annual compound growth of 7 percent for the next five years, said Chris Webber, vice president for automotive practice at Strategy Analytics.
Freescale uses its sponsorship of the OGT! Panasonic Prius to showcase its chips. Its microcontrollers power a wireless feed of data from the car to the pit that is part of a new vehicle-to-infrastructure project Freescale dubs Intelligent Garage.
"We chose racing because it is the most severe environment in terms of speed, temperature, noise and vibration," spokesman Hiroyasu Oya said. "If the systems function in such conditions, we can easily transfer them to consumer use."
But the real value may come from marketing the company next to the world's biggest automaker. "Look at our racing suits," Uze said, gesturing to his suit lapels.
"On this side it says Freescale, and right next to it, it says Toyota Racing."