JIC Remains Committed to Chip Sector Overhaul Despite JSR Losses

Japan Investment Corporation (JIC) remains focused on driving semiconductor sector consolidation through JSR, despite the chip materials maker posting a 209 billion yen ($1.45 billion) operating loss for the fiscal year ending March. JIC Capital CEO Shogo Ikeuchi reaffirmed the state-backed fund's goal of growing Japan’s global competitiveness by reorganizing the industry through strategic mergers involving JSR, which it took private in a $6 billion deal last year.

“Our goal was to take JSR private and, through a series of industry reorganizations such as mergers with rivals, significantly grow the semiconductor business and re-list the company,” Ikeuchi told Reuters. “That goal hasn’t changed.”

JSR, a key player in photoresist manufacturing, has undergone leadership changes and launched internal restructuring. However, its new CEO said the company is currently not ready for acquisitions. The company’s weak performance was mainly driven by its underperforming life sciences division, part of which is being sold to Tokuyama Corp for 82 billion yen.

The JIC-led buyout has stirred debate within the industry, with critics questioning the necessity and effectiveness of government-backed intervention in corporate restructuring. “Japan is a country where restructuring is structurally difficult,” Ikeuchi noted, acknowledging the challenge.

Founded in 2018 and overseen by Japan’s trade ministry, JIC aims to revitalize domestic industries through strategic investment. JSR maintains plans to return to the public markets within five to seven years, though Ikeuchi mentioned an earlier IPO could be possible depending on progress.

Resonac, a JSR rival, has expressed interest in participating once JIC exits. While Ikeuchi acknowledged the interest, he also cited Resonac’s high debt load as a factor to consider among various options.