Tokyo – JIC’s Private Equity Arm Plans to Continue Chip Sector Consolidation Despite Weakness
[Headline]: "JIC’s Private Equity Arm’s Strategy Unblunted by JSR’s Operating Loss"
In a move that highlights its commitment to the semiconductor sector, Japan Investment Corp (JIC), an arm of the state-backed JIC, stated that its goal of consolidating Japan’s chip industry remains unaltered. Despite JSR, the photoresist manufacturer, ending the year in a $2.09 billion loss, JIC retains its vision for strategic acquisitions and industry reorganization.
"The goal was to take JSR private and… through a series of industry reorganisations, such as mergers with similar companies or rivals… to significantly grow the semiconductor business and enhance international competitiveness and lead to re-listing," said JIC Capital CEO Shogo Ikeuchi. "That goal hasn’t really changed at all even now," he added.
However, JSR underwent a management change and began restructuring, with new management having expressed that they are not ready to make acquisitions. The struggling life sciences division has further weakened the company’s earnings, as it agreed to sell off part of its business to Tokuyama Corp for $8.2 billion.
"This is controversial in the industry with some questioning the need for such intervention and prospects for successfully reshaping the sector," Ikeuchi noted. "Japan is a country where restructuring is structurally difficult."
JIC was established in 2018 to invest in companies aimed at boosting Japan’s competitiveness and operates under the supervision of the trade ministry. "JSR previously said it aims to relist in five to seven years. That’s still the plan, though an earlier listing is possible," Ikeuchi informed, a former executive at staffing firm Recruit.
Takahashi, the CEO of JSR’s peer company Resonac, revealed his company’s interest in joining JSR when JIC exits, noting the chip materials maker’s debt burden. This indicates that the strategic approach of JIC remains intact, despite challenges posed by JSR’s current operating losses.
