Semiconductor Firm JSR to be Acquired for $6.3 Billion by Japan-backed Fund

A fund supported by the Japanese government has made plans for a $6.3 billion purchase of JSR, a major player in the semiconductor material industry. This highlights the growing strategic importance governments worldwide are placing on chip technology.

The proposal from the Japanese Investment Corporation is to offer 4,350 Japanese yen ($30.3) per share, representing a 35% premium on the closing price from Friday.

Hopes of the deal have already boosted JSR shares by more than 20% on Monday. JIC is expected to make a tender offer in December.

JSR holds a significant position in the photoresists aspect of the semiconductor supply chain, an area where Japan is a leading force. Photoresists are light-sensitive materials crucial to the process of engraving patterns onto wafers, eventually forming the design of a chip’s circuit.

“Japan aims to leverage its comparative advantage in materials necessary for semiconductor manufacturing,” stated Pranay Kotasthane, chairperson of the high-tech geopolitics program at the Takshashila Institution, in an interview with CNBC.

The potential acquisition comes amidst a larger technological competition between the U.S. and China, with semiconductors taking center stage.

Last year, the U.S. imposed strict export restrictions on semiconductor tools and certain chips to China. The Netherlands and Japan followed suit with similar measures, given the importance of critical chip firms like ASML.

Simultaneously, countries are striving to safeguard their own supply chains and develop their domestic chip industries, focusing on areas where they possess traditional strengths.

For Japan, this means companies like JSR operating in the chemicals and materials sector.

“JIC’s investment in JSR implies that the government may have greater influence over its decisions,” explained Kotasthane. “This creates discomfort for China on a geopolitical level, especially considering Japan’s implementation of its own version of export controls against the Chinese semiconductor industry.”