Mitsui Chemicals is planning to acquire semiconductor materials maker JSR from state-backed Japan Investment (JIC) in a deal potentially worth more than JPY1.3 trillion (US$8.2 billion), which would rank as the largest acquisition in Japan's chemicals sector, according to reports by Nikkei Asia and Reuters on November 4, 2026.
JIC has reportedly selected Mitsui Chemicals as the preferred bidder. A decision could come as early as November.
Mitsui Chemicals said it was considering various options, including acquiring JSR, to enhance its corporate value, but stressed that no decision had been made. JIC and JSR did not respond to Reuters' requests for comment.
A bigger foothold in photoresists
The potential acquisition would strengthen Mitsui Chemicals' position in the semiconductor supply chain by adding JSR's expertise in photoresists, materials used to transfer circuit patterns onto silicon wafers. JSR is the world's second-largest photoresist producer, behind Japan's Tokyo Ohka Kogyo.
JIC acquired JSR and took it private in 2024, initially paying approximately JPY900 billion. The fund subsequently sold off unprofitable businesses to refocus JSR on semiconductor materials, while seeking to promote consolidation in Japan's chip materials industry.
The proposed sale comes as demand for semiconductor materials grows alongside investment in AI infrastructure. "The materials market is getting bigger and bigger, particularly thanks to AI," said Akira Minamikawa, an analyst at Omdia, adding that smaller companies could struggle to serve the expanding market.
JSR's financial performance has also improved following its restructuring. Its revenue for the fiscal year ended March rose 13% year-over-year to JPY440.7 billion, while net profit reached a record JPY60.7 billion, reversing a loss of JPY217.7 billion a year earlier.
Funding concerns weigh on shares
Despite the strategic rationale, the transaction could pose a substantial financial challenge for Mitsui Chemicals, whose market capitalization stands at approximately JPY800 billion.
The company held JPY217.8 billion in cash and cash equivalents and JPY876.4 billion in interest-bearing debt at the end of June, with a debt-to-equity ratio of 0.75.
Mitsui Chemicals' shares fell 13% following Reuters' report. Tsutomu Yamada, an analyst at Mitsubishi UFJ eSmart Securities, said that concerns over the substantial funding required appeared to have weighed on investor sentiment.
If completed, the acquisition would surpass Showa Denko's approximately JPY1 trillion purchase of Hitachi Chemical in 2020. The two businesses subsequently integrated to form Resonac Holdings in 2023.
Article edited by Jerry Chen
