Japan-Backed Fund Buys JSR To Boost Chip Supply Chain

State-backed fund Japan Investment Corp. (JIC) will acquire semiconductor material maker JSR Corp. for about 900 billion yen ($6.3 billion), JSR said, as part of efforts to strengthen the country's chip supply chain, Kyodo News reported.

Photo Insert: JSR plans to propel reorganization in the Japanese chip material industry with support from the government-backed JIC and aims to relist in several years.

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.

A photoresist is a light-sensitive polymer used in the circuit formation process of chip manufacturing. JSR has about 30% share in the global market for the material.

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.

"We need to improve the efficiency of our research and development 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.

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