Semiconductor materials maker JSR Corp says it has agreed to be bought by a government-backed fund for about 909.3 billion yen ($6.35 billion), as Tokyo revs ups its efforts to revive the country’s chip industry.
The move by Japan Investment Corp (JIC), overseen by the powerful trade ministry, is the latest in a series of increasingly muscular government steps to regain Japan’s lead in advanced chip production and maintain its edge as a maker of materials and tools used in their manufacture.
JSR’s market capitalisation was 677 billion yen ($4.73 billion) at Friday’s market close. Its shares rose by 21.7%, their daily limit, ahead of the official announcement.
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JIC plans to launch a tender offer in late December offering 4,350 yen per share and taking the company private. Mizuho Bank and the government-backed Development Bank of Japan (DBJ) will provide financing.
JSR said in securities filings that it contacted JIC in November to discuss its capital strategy because it felt that domestic materials makers had not consolidated and needed to boost their competitiveness. JIC can provide long-term capital on a big scale, JSR said.
The deal comes amid deepening tensions between the US and China as President Joe Biden’s administration builds domestic chip manufacturing capacity. Japan and the Netherlands have joined the US in restricting exports of chipmaking tools to China.
JSR is a top supplier of photoresists, which are light-sensitive chemicals used to etch patterns on wafers.
Japan, which has seen its share of the global semiconductor market fall from 50% in the late 1980s to about 10%, aims to treble sales of chips made in the country to 15 trillion yen by 2030 by encouraging investment and offering various forms of support.
On top of the JSR deal, Taiwan Semiconductor Manufacturing Co (TSMC) announced in November a plan to build a $7 billion chip plant on Kyushu island, with production of 12 and 16 nanometre chips slated to begin in 2024.
Sony Group and auto parts maker Denso, which will use the chips TSMC makes, are also investors.
US memory chipmaker Micron Technology said in May it planned to invest up to 500 billion yen ($3.5 billion) in extreme ultraviolet technology (EUV) over the next few years with support from the Japanese government. It said it would be the first chipmaker to bring EUV technology to Japan for production.
And Samsung Electronics is considering setting up its first chip packaging test line in Japan near its existing research and development centre in Yokohama, sources told Reuters in March.
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Also, Japan’s state-backed Rapidus said in February it would build a chip plant in Chitose, a manufacturing hub on the nation’s northern island of Hokkaido.
The state-backed JIC, backed by $20 billion of government money, was set up in 2018 to invest in Japanese companies to boost the nation’s competitiveness.
It took over the role from the Innovation Network Corp of Japan (INCJ), which was created in 2009 as a temporary scheme to promote new industries and business consolidation.
INCJ largely focused on cash-strapped or ailing firms but JIC has so far focused mostly on investing in startups and venture capital funds.
It also participated in the bidding to take Toshiba private jointly with private equity firm Japan Industrial Partners, but later dropped out due to disagreements over post-buyout strategies.
- Reuters with additional editing by Sean O’Meara
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