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.

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,”