Chemical Week • July 3/10 • Viewpoint

↘ The surprise takeover of Tokyo’s JSR Corp. by a state-backed investment fund in Japan highlights how high the stakes are in semiconductor materials (p. 9).

Japan Investment Corp. (JIC), overseen by Japan’s Ministry of Economy, Trade and Industry (METI), reached an agreement to acquire electronic materials leader JSR for ¥903.9 billion ($6.3 billion) in a bid to reinforce Japan’s position in the semiconductor materials sector.

Semiconductor market growth is expected to nearly double to more than $1 trillion by 2030, but that rapid growth plays out against a backdrop of rising geopolitical tensions as the US, Europe and Japan race to ensure chip supply security, mitigate the impacts of chip shortages, and lessen heavy reliance on advanced chip production in Taiwan.

The race to develop next-generation technologies is intensifying and semiconductor manufacturers and equipment manufacturers are expanding corporate scale and leverage with semiconductor material suppliers, JSR noted. Fragmentation and lack of scale, a common trait of both commodity and specialty chemical makers in Japan, puts Japan’s semiconductor sector at risk. “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 takeover 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. The deal “will provide an opportunity for industry reorganization ... to strengthen the international competitiveness of [Japan’s] semiconductor materials industry,” JIC said.

The US and Europe are also taking aggressive steps to reshore semiconductor production, improve resilience of supply chains and reduce external dependencies.

The deal highlights the active role that Japan’s METI can play in cooperation with private firms on policy and industry realignment. More deals are likely to follow. JSR will not only scale up in its core lithography materials business but also noted its low market share in process and packaging materials for 5G technology, and the need for other semiconductor materials. “It is necessary to strengthen international competitiveness through a bolder industry restructuring to gain a high market share in a wide range of semiconductor materials,” JIC noted.

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