Rohm shares surged 18%, the most in 26 years, after the Japanese chip parts maker said it had received an acquisition proposal from Denso.

Rohm’s stock rose to its upper daily limit of ¥3,243 at market close in Tokyo, while Denso fell 3.3%.

Rohm has received a share acquisition bid from auto parts supplier Denso but has not made any specific decisions, the company said in a Friday afternoon statement, responding to a Nikkei newspaper report.

The potential deal underscores Japanese auto suppliers’ moves to lock in chip capacity as vehicles become more software-driven and reliant on power semiconductors, which manage electric motors and batteries. A takeover of Rohm would mark an unusual customer-led consolidation in the country’s fragmented chip sector.

Denso’s takeover approach was made in February and would value the chipmaker at around ¥1.3 trillion ($8.3 billion), according to a Nikkei report citing unidentified sources from earlier Friday. If Rohm, which has created a special committee to consider the offer, rejects the proposal, Denso may proceed with an unsolicited bid, according to the report.

Denso said in a statement that it’s weighing all options in its strategic partnership with Rohm, including a purchase of its shares, but denied reports that a decision had been made.

The prospect of Rohm being taken over is “a nice surprise” for investors, said Amir Anvarzadeh, Japan equity strategist at Asymmetric Advisors. However, Denso will likely need to raise its price for the deal to go through, he added.

“Consolidation among power semiconductor companies hasn’t progressed, partly because of a standoff over who would take the lead,” said Hideki Yasuda, an analyst at Toyo Securities Co. “Now that a player from a higher layer has stepped in, it is entirely possible to see a restructuring of the power semiconductor industry effectively driven by customers.”

Major automakers were shaken late last year by a global semiconductor shortage after China moved to block Nexperia — a chipmaker based in the Netherlands — from exporting products made at its local plants. The resulting struggles to secure supply offered a sobering lesson for global brands that remain heavily reliant on China for the crucial technology.

Honda has been hit particularly hard, with the Nexperia shortage prompting it to reduce its sales forecast to 3.34 million units from 3.62 million. It had previously curbed or suspended output at some plants in North America due to the issue.

Denso raised its stake in Rohm to almost 5%, Nikkei reported in July last year.