Japan’s surprise state-backed buyout of chip materials maker JSR hints at further ‘protection’-minded acquisitions

The deal – which surprised many – makes sense amid growing tensions in the semiconductor sector, with other similar agreements likely, analysts say

Tokyo is aggressively protecting and developing its advanced technologies, including chips, increasingly seen as crucial as the US and China face off

Reading Time:3 minutes

Who is in charge of making vital semiconductor chips is a key question increasingly being asked by global governments, including Japan’s. Photo: Shutterstock

Published: 9:30am, 28 Jun 2023

The sudden announcement this week that major semiconductor materials maker JSR Corp is to be bought by Japan Investment Corp (JIC), a powerful government-backed fund, caught industry watchers off guard.

But Monday’s development makes sense, observers say, at a time of growing global tension in the semiconductor sector – and it may well be the first of a number of similar deals.

JSR confirmed the deal after a board meeting called to discuss the offer from JIC, which is overseen by the trade ministry. The fund’s majority shareholder is the government.

Media reports suggested JSR initially approached it with the outline of the proposal, which on Tuesday valued the company at 909 billion yen (US$6.3 billion), a significant improvement on the market’s estimation of its value – some US$4.7 billion – at the close of trading in Tokyo on Friday evening.

JSR is central to the manufacture of Japan’s semiconductors, holding 30 per cent of the global market for chemical agents known as photoresists. Photo: AFP

JSR, which operates in Japan and overseas, holds a 30 per cent share of the global market of photoresists, a chemical agent critical to the manufacture of semiconductors and an area in which Japan is a world-leader.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x