Resonac Holdings is exploring potential deal structures for the acquisition of JSR, a government-owned key player in the semiconductor industry, as part of its strategy to dominate the Japanese market for artificial intelligence semiconductor materials. Currently under the control of the state-backed Japan Investment Corp. (JIC) after a $6 billion acquisition, JSR is the leading global manufacturer of photoresists, which are essential light-sensitive materials used in lithography to transfer circuit patterns onto silicon.
Resonac Holdings’ CEO, Hidehito Takahashi, mentioned in an interview, “We have established a strong position in various chip chemicals, but we lack a product for lithography. Securing this would allow us to position ourselves as a Japan-based specialty chemicals company with a significant presence in the global market.” Last year, Takahashi expressed Resonac’s interest in getting involved when JIC decides to divest JSR. On Wednesday, he revealed that he is currently engaged in “mental exercises” to simulate potential deal structures and identify necessary partners for such a transaction. Following the announcement, Resonac’s shares dropped 3%, erasing previous gains. Japan is home to the majority of the world’s photoresist production, with JSR facing competition from companies like Tokyo Ohka Kogyo, Fujifilm Holdings, and Sumitomo Chemical. The acquisition of JSR, approved by Japan’s Ministry of Economy, was intended to facilitate much-needed industry consolidation. Bloomberg Intelligence analyst Masahiro Wakasugi noted, “Japan should have significantly fewer photoresist manufacturers, as the market size is insufficient to support all of them profitably.”
Takahashi stated he is prepared to make a significant investment in JSR if the opportunity arises, although he may not pursue it as aggressively as he did with the $7 billion acquisition of Hitachi Chemical in 2020, when Hitachi Chemical was valued at double that of Resonac’s predecessor, Showa Denko. JIC has indicated that it plans to sell JSR shares within five to seven years. “As long as the price is justifiable to our shareholders, I am open to exploring various options to facilitate a deal,” Takahashi said. Based in Tokyo, Resonac is a supplier of essential materials for advanced semiconductors that are fundamental to AI technology. The company, which was traditionally known for materials like graphite, is restructuring its business focus towards chip-related products, including nonconductive films and thermal interface materials that ensure the reliable production of high-bandwidth memory.
“I want JIC and the Japanese government to recognize that we are the ideal partner for JSR and for strengthening the country’s semiconductor materials industry,” Takahashi added.
