On Monday, the Japanese Investment Corp. proposed a $6.3 billion acquisition of JSR, a major company in the semiconductor supply chain that specializes in photoresists. The offer of 4,350 Japanese yen per share marks a 35% premium to Friday's closing price, and if successful, would give the Japanese government more influence over JSR's decisions. The acquisition underscores the importance governments place on the critical technology of chips, with countries like Japan trying to secure their own supply chains and build up their domestic chip industries. The potential deal also comes amid a broader technology battle between the US and China, with both countries putting export restrictions on semiconductor tools and certain chips.
The potential acquisition of JSR by the Japanese Investment Corp. is a reflection of the growing importance of semiconductors to national economies and the trend of governments looking to secure their supply chains. Governments around the world are investing heavily in the semiconductor industry, as the technology is an essential component of a broad range of industries, with applications in fields such as automotive, consumer electronics, aerospace, and more.
JSR is a key player in the semiconductor material supply chain and specializes in photoresists, which are materials used in the process of creating circuit patterns on wafers. With the proposed acquisition, the Japanese government would gain greater control over JSR's decision-making and could help bolster Japan's domestic chip industry. This strategic move is part of a broader trend of governments around the world seeking to gain greater control over the semiconductor supply chain and develop self-sufficiency.
The technology battle between the US and China has further intensified this trend. In 2020, the US announced strict export restrictions on semiconductor tools and certain chips to China. Other countries, including Japan and the Netherlands, followed suit with similar restrictions. At the same time, countries are trying to develop their domestic chip industries, focusing on areas where they traditionally have strengths. For Japan, this sector is chemicals and materials, with companies such as JSR playing a crucial role in the supply chain.
Going forward, we can expect more strategic acquisitions and alliances in the chip supply chain. As countries try to develop a stronger domestic chip industry, they will seek to control key parts of the supply chain. Governments will likely play a more prominent role in the semiconductor industry, particularly as chips become increasingly important in critical technologies such as artificial intelligence, 5G, and the internet of things (IoT).