Kartik Kohli 2023-07-06 23:46:25
A state-backed investment firm has reached agreement to acquire JSR Corp. (Tokyo) for ¥903.9 billion ($6.3 billion) in a bid to reinforce Japan’s position in the semiconductor materials sector. JSR has a global top position in photoresists, and its life sciences business provides research products and services for biopharmaceutical discovery and development.
“The investment pressure to stay on the leading edge, both in terms of capital and R&D resources is intense,” said Eric Johnson, JSR CEO. “We’ve seen significant consolidation by our customers, and we’re seeing accelerated consolidation from our global competitors. We feel that reform is critically important for long-term global competitiveness [in semiconductor materials].”
The investment firm, Japan Investment Corp. (JIC), agreed to buy JSR for ¥4,350 per share, a 34.51% premium to JSR’s closing price on Friday and a 41.42% premium to JSR’s average share price in the last six months. JIC intends to initiate a tender offer by December 2023, pending regulatory and other approvals.
JIC said that JSR approached it in November 2022.
The acquisition is “designed to enable JSR to smoothly and rapidly promote its bold, medium-to-long-term strategic investments without being bound by the short-term impact on business performance,” JIC said. Johnson said JSR eventually plans to relist on public markets.
JIC added that the initiative would provide an opportunity for industry reorganization and the sourcing of private funds to strengthen the international competitiveness of the semiconductor materials industry in Japan.
JIC is overseen by Japan’s Ministry of Economy, Trade and Industry (METI). The fund is owned jointly by Japan’s Ministry of Finance, the Development Bank of Japan and 24 private-sector companies.
In addition to photoresists, JSR’s semiconductor materials business produces advanced lithography materials, multilayer hardmask materials, topcoat materials for immersion lithography, as well as chemical and mechanical planarization (CMP) slurries. The company’s operations also include display materials and plastics, mainly acrylonitrile-butadiene-styrene (ABS) and blends. JSR divested its elastomers business last year.
According to the Specialty Chemicals Update Program (SCUP) by S&P Global Commodity Insights, JSR is the world’s biggest producer of photoresists, including the company’s broad product lines of g-line, i-line, KrF, ArF and EUV photoresists. The other major Japanese producers of photoresists are Shin-Etsu Chemical Co., Sumitomo Chemical Co. and Tokyo Ohka Kogyo Co.
JSR posted revenue of ¥408.8 billion for the fiscal year ended March 31, 2023, up 20%. Operating profit for the fiscal year was ¥34 million, down 21% on declines in display materials and plastics.
Electronic materials advantage
Japan currently has an “absolute advantage” in the global photoresists market, said Tianyi Ma, senior research analyst/specialty chemicals at S&P Global. JSR is the world’s largest manufacturer of leading-edge ArF photoresists, with a market share of about 30%, added Ma.
Ma noted that in 2021, JSR acquired Inpria Corp. (Corvallis, Oregon), a leader in design, development and manufacture of metal oxide photoresists used in EUV lithography, for $514 million. Ma said that the acquisition has strengthened JSR’s leading position in the semiconductor material supply chain. EUV photoresists are the next generation of photoresist that will be widely used in the most advanced chip (<3nm) manufacturing, Ma said.
“The semiconductor industry is under fierce competition globally. China and the US are massively investing and competing in this area and much government interference has been involved,” said Ma. “The acquisition [of JSR] is one of a number of important steps to ensure control of the materials supply chain, which is crucial in the semiconductor manufacturing industry.”
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