Japan Privatizes Chip Supplier in $6B Deal to Secure Supply Chain

JSR buyout follows plans to launch a government-supported chip company

Ben Wodecki, Jr. Editor

July 4, 2023

1 Min Read
RICHARD A. BROOKS/AFP via Getty Images

At a Glance

  • The Japanese government is buying JSR Corp, which makes light-sensitive chemicals vital to chipmaking productions.

The Japanese government is privatizing JSR Corp, which manufactures compounds used in the creation of semiconductors.

The $6.3 billion buyout would see the government take direct control to secure access to light-sensitive chemicals vital to the chipmaking process.

JSR is one of three companies that control the world’s supply of fluorinated polyimide, used in smartphone displays, and hydrogen fluoride, used for glass etching when making chips. The other companies are also Japanese - Tokyo Ohka Kogyo Co. and Shin-Etsu Chemical Co.

The chemicals JSR supplies are used for the semiconductors that power supercomputers and AI hardware used in data centers, as well as handsets like Apple’s iPhone.

Following reports of the deal, JSR’s shares shot up by 22%, the most since the turn of the century. Mizuho Bank and the Development Bank of Japan are funding the bid, with the offer to be launched in late December.

Nations move to shore up supply chains

Taking control of a compound producer vital in chipmaking would prove a boon for Japan, which joins a list of nations vying for a slice of the post-pandemic chip market pie.

Last November, the Japanese government announced it would launch its own semiconductor manufacturing company. With help from the likes of Sony, SoftBank and Toyota, the company, dubbed Rapidus, would begin manufacturing chips by the second half of the decade.

Japan’s move to sure up its supply chain comes as China imposed harsh restrictions on metals used in chipmaking. New Beijing rules would require permits for exports of germanium and gallium.

About the Author(s)

Ben Wodecki

Jr. Editor

Ben Wodecki is the Jr. Editor of AI Business, covering a wide range of AI content. Ben joined the team in March 2021 as assistant editor and was promoted to Jr. Editor. He has written for The New Statesman, Intellectual Property Magazine, and The Telegraph India, among others. He holds an MSc in Digital Journalism from Middlesex University.

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