Tokyo ready to shell out $7 billion to nationalize one of its semiconductor stars

This Monday, the listing of JSR Corp shares had to be suspended on the Tokyo Stock Exchange following the surge in requests to purchase securities from the Japanese group. Investors were all looking to take advantage of the probable announcement, in the coming hours, of a nationalization, at a high price, of the company, which has become one of the world leaders in the manufacture of photoresists for all the major giants of the semiconductor industry.

Over the weekend, the Japanese media reported that Japan Investment Corporation (JIC), an investment fund led by the Japanese government and backed by large private groups, was preparing to orchestrate an acquisition of all of JSR in an operation estimated, according to the “Nikkei”, at 1,000 billion yen, or 7 billion dollars.

Strategic investment

The board of directors of JSR, currently valued at 674 billion yen ($4.73 billion), is due to meet on Monday afternoon to consider JIC’s offer, but seems determined to support the operation. The management, led since 2019 by the American Eric Johnson, has been seeking capital for months to boost its production and research capacities in a sector now presented as “strategic” by the Japanese government of Fumio Kishida.

Traumatized by the recent shortages of components, which have penalized its major manufacturers, and worried about the tensions around Taiwan, which concentrates most of the production of the most efficient semiconductors in the world, Tokyo mobilizes fortunes in public funds For trying to “secure” its supply of chips .

The country released 476 billion yen to subsidize the construction, in Japan, of a first foundry of the Taiwanese TSMC. He is also funding the creation of the Rapidus company, which says it wants to produce chips in the Hokkaido region. Funds have also been given to Samsung Electronics to support the development of a factory in Yokohama.

Vigilance in the face of Beijing’s ambitions

In coordination with the United States, the Japanese executive has also tightened its export controls to China of certain key materials and components, used by Beijing to accelerate the move upmarket of its own semiconductor industry.

If it were to be confirmed, the nationalization of JSR would thus be part of this strategy of development and protection of Japanese players in the sector. Based in Tokyo, JSR Corp, originally specialized in synthetic rubber, manufactures the different types of photosensitive resins deposited on the silicon wafers before the etching of the integrated circuits.

Above all, the group is the world leader, along with a handful of other Japanese companies, in the segment of high-end resins used for lithography by extreme ultraviolet radiation (EUV) of the most microscopic and high-performance semiconductors ever created. . Its resins are thus essential to the operations of lithograph made by Dutch ASML machines in the large foundries of TSMC and Samsung Electronics.