Japan Investment Corp (JIC), a state-backed fund established to bolster domestic industrial competitiveness, is assessing the possibility of selling JSR, according to two people familiar with the matter who spoke on condition of anonymity because the plans have not been made public. The potential divestment would come roughly two years after JIC took JSR private in a transaction valued at about $6 billion.
Those same sources said Fujifilm and Mitsubishi Chemical have expressed interest in acquiring JSR. JIC, JSR, Fujifilm and Mitsubishi Chemical did not immediately respond to requests for comment.
Investors and industry participants have bid up valuations across the semiconductor supply chain in recent months as large-scale investments tied to artificial intelligence have filtered into chipmaking-related firms. One of the people who spoke to Reuters said JIC - which had originally seen the JSR deal as a vehicle for consolidation in the materials segment of the industry - may now be looking to take advantage of elevated market conditions to monetize its stake.
JSR, founded in 1957, is a major manufacturer of photoresists, the light-sensitive materials used to transfer circuit patterns onto semiconductor wafers. Fujifilm is also a producer of photoresists, while Mitsubishi Chemical supplies chemicals used in those photoresist formulations.
At the time JIC completed the take-private of JSR, the company said moving off the public markets would reduce the need to manage a foreign investor base and create flexibility to pursue acquisitions. However, observers in the industry questioned whether JSR would be able to secure the deals necessary to reshape the materials sector as intended.
JSR's new chief executive told investors last year that his priority was to restore the company's business performance and that the company was not prepared to pursue acquisitions at that time.
It logged a net profit of 60.7 billion yen ($380 million) on 400.7 billion yen of revenue in the year ended March, returning to profitability after being pulled down by its life sciences business the year before.
Japan hosts a number of firms that make specialized but essential chipmaking materials and equipment, and many of those companies have seen their market valuations rise during the AI-led demand cycle. The shares of photoresist maker Tokyo Ohka Kogyo, for example, have tripled over the past year, giving it a market value of 1.4 trillion yen.
JIC is overseen by Japan's trade ministry and was set up in 2018 with a mandate to invest in companies that can strengthen the country's industrial competitiveness. In addition to the JSR transaction, the fund has invested in medical equipment maker Topcon alongside private equity firm KKR.
Exchange rate used in reporting: $1 = 159.5200 yen.
Context and potential implications
The reported review of JSR's ownership comes at a time when buyers in the materials and chemicals space are re-evaluating strategic options as valuations have shifted. JIC's original strategy for JSR emphasized using the company as a consolidation platform in the materials segment; the move to consider a sale suggests a reassessment of that plan in light of market conditions.
Any decision by JIC to sell would touch several parts of the market - from specialized chemical suppliers and photoresist manufacturers to broader semiconductor equipment and materials players - but no formal process or timetable has been disclosed by the parties involved.