State-backed fund Japan Investment Corp. will acquire semiconductor material maker JSR Corp. for about 900 billion yen ($6.3 billion), JSR said Monday, as part of efforts to strengthen the country's chip supply chain.
The acquisition is aimed at accelerating growth at one of the leading producers of photoresists, a material crucial for chip production, as semiconductors have increasingly taken on strategic importance to ensure economic security and prosperity in the age of digitalization.
JIC intends to launch a tender offer in December for JSR, offering 4,350 yen per share, and take the chip material company private, JSR said.
"Consolidation is happening all around us," JSR CEO Eric Johnson said at an online press conference. "We need to improve the efficiency of our research and development activity and we need to drive scale in order for us to be truly competitive globally."
The company plans to propel reorganization in the Japanese chip material industry with support from the government-backed JIC and aims to relist in several years, Johnson said.
JIC will finance the deal with help from financial institutions such as Mizuho Bank and the Development Bank of Japan, JSR said.
The move comes as the Japanese government is trying to ensure a stable supply of chips amid the escalating technological rivalry between the United States and China over semiconductors.
Japan has persuaded Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, to build a factory in the country.
It has also decided to offer sizable subsidies to domestic chip venture Rapidus Corp., set up last year by eight major Japanese companies including Toyota Motor Corp. and Sony Group Corp.
A photoresist is a light-sensitive polymer used in the circuit formation process of chip manufacturing. JSR has about a 30 percent share in the global market for the material.
JSR, formerly known as Japan Synthetic Rubber Co., was set up in 1957 as a public-private enterprise to manufacture synthetic rubber, became a private company in 1969 and listed on the stock market the following year.
The company, which started to sell photoresists in 1979, has focused its resources on the chip material business in recent years. It bought its U.S. peer Inpria Corp. in 2021 and sold the synthetic rubber business in 2022.
The company posted a net profit of 15.8 billion yen on sales of 408.9 billion yen for the year ended March.
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