The Japan Investment Corporation (JIC) has offered the $6.4 billion purchase of photoresist producer JSR. Is Tokyo trying to consolidate its position in the AI chip war?
Artificial intelligence has gained mainstream attention with the advent of tools like ChatGPT this year. Hence the demand for semiconductor chips, which is one of the computational prerequisites for training AI models, has also increased.
JSR accepts takeover deal from state-backed JIC amid AI chip wars
According to the Asia TimesJIC, a company 96.5% owned by the Japanese government, offered to buy JSR for 909.3 billion yen ($6.4 billion). JSR is a photoresist manufacturer with a global share of over 30%, serving clients such as Intel, Samsung and Taiwan Semiconductor Manufacturing Company (TSMC).
A photoresist is a chemical used in the design of on-chip printing circuits.
JIC will acquire a 100% stake in the company, and it will go private by early 2024. Following regulatory approval, the transaction will be subject to a 20-day bid-bid period in December 2023.
National hero item?
Since JSR has a strong balance sheet, many experts believe that it does not need additional funds from JIC. This development comes amid the ongoing chip wars as the US plans to stop exporting powerful AI chips to China.
financial times It was reported that semiconductor analyst Damien Thong believes there are not many details available about the acquisition. He said, “There was a sense that we weren’t supposed to get to the bottom of it.”
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Another analyst finds it unclear whether the deal concerns the privatization or nationalization of an important strategic asset. They told the FT:
“There might be some kind of national hero element to this, and once you start building an empire for non-economic reasons, anything is possible.”
However, JSR CEO Eric Johnson denied the nationalization angle. It is to explain:
“Their Charter (JIC) is to support the acceleration of competitiveness and global competitiveness of Japanese industry.”
The growing popularity of artificial intelligence in 2023 and the demand for semiconductor chips have brought the share value of chip maker Nvidia to $1 trillion.
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