Japan makes moves towards regaining its position as a leader in semiconductor manufacturing. Credit: Thichaa.

The Japanese government is investing heavily in its future as a key semiconductor manufacturer: a state-backed fund agreed to buy out chip materials producer JSR Corporation for $6.3bn on Monday (26 June), Reuters reported.

The action by the Japan Investment Corp (JIC) follows moves by Japan to put the country back on the map as a leader in chip production, marking its place as a major manufacturer of semiconductor materials as Washington pushes US tech companies to cut ties with China.

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JSR is the global leader in fabricating photoresists and one of three Japanese companies that dominate the world’s supply of fluorinated polyimide and hydrogen fluoride.  

The Japanese government’s $6.3bn plan could see Tokyo expand Japan’s capacity for manufacturing compounds that are essential for creating semiconductors.

JIC plans to offer shareholders $30.40 (¥4,350) a share in a tender offer towards the end of 2023, which will value the company as much as $6.3bn, Bloomberg reported.

The funding will be provided by Mizuho Bank and the government-backed Development Bank of Japan (DBJ), according to Reuters.

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JSR shares surged by its daily limit, growing by 22% ahead of the announcement, according to Bloomberg.

The news also prompted some to expect greater sector consolidation, raising shares in competitors Shin-Etsu and Sumitomo Chemical, which both rose by two percent.

JSR CEO Eric Johnson said “Capabilities here are superb, but there are a lot of us and all of us are spending money redundantly, so we feel the opportunities for efficiency gains are significant,”