Photo/Illutration A semiconductor wafer (Provided by SEMI Japan)

Japan Investment Corp., a government-backed fund, plans to acquire chip materials maker JSR Corp. for about 1 trillion yen ($7 billion) in a move that carries major significance for domestic semiconductor strategy.

JSR, which holds a 30 percent share of the global market of photoresists, a chemical agent essential for manufacturing semiconductors, will be delisted from the Tokyo Stock Exchange as early as fiscal 2024 if everything goes as planned, a government source said June 24.

Being delisted will allow JSR to flexibly make management decisions on issues such as restructuring of businesses and investments in growth sectors.

JIC is considering making a tender offer for JSR as early as this year.

The fund plans to invest 500 billion yen, while Mizuho Bank is expected to lend around 400 billion yen.

Photoresists, a liquid agent, are applied on silicon wafers, which serve as substrates for integrated circuits. They are vital for improving the performance of semiconductor products.

The government is moving aggressively to beef up the domestic supply chain for semiconductors, which Japan considers a strategic commodity for its economic security.

“It is vital to secure an industrial base of semiconductor technology in Japan, not only to strengthen industrial competitiveness but also from the standpoints of decarbonization and economic security,” Prime Minister Fumio Kishida said at a news conference on June 21.

The industry ministry revised its semiconductor and electronics industry strategy this month and set a goal of increasing annual domestic sales of semiconductor products threefold to more than 15 trillion yen.

It also decided to provide 330 billion yen in subsidies to a new factory in Hokkaido planned by Rapidus Corp., a semiconductor joint venture set up by major domestic companies, including Toyota Motor Corp. and NTT Corp.

JSR, which focuses on semiconductor materials and medical business, reported a net profit of 15.7 billion yen on sales of 409 billion yen for the business year that ended in March. It expects a net profit of 25 billion yen on sales of 442 billion yen for the current business year.

The company was originally established as Japan Synthetic Rubber Co. in 1957 to produce synthetic rubber in Japan under a national policy.

It later became a purely private-sector enterprise and has diversified its areas of business.

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