Japan’s semiconductor materials giant is born: Mitsui Chemicals to acquire JSR for 16 trillion won

【Financial News Tokyo correspondent Seo Hye-jin】Mitsui Chemicals will acquire semiconductor materials giant JSR for a total investment of 1.84 trillion yen (about 15.7504 trillion won), together with the Development Bank of Japan Inc. (DBJ). The deal brings together the world’s leading maker of pellicles, which protect semiconductor photomasks, and the world’s second-largest photoresist maker. Mitsui Chemicals also plans to spin off its automotive materials business and focus its resources on semiconductors and healthcare.
According to the Nihon Keizai Shimbun (The Nikkei) on the 9th, Mitsui Chemicals announced that day it would acquire JSR from the government-backed fund Japan Investment Corporation (JIC). The share purchase price is 1.3921 trillion yen (about 11.9164 trillion won), of which DBJ will contribute 200 billion yen (about 1.712 trillion won). The acquisition is targeted for completion in the second half of fiscal 2027.

Chinese companies’ push into even high-value-added materials is one reason Mitsui Chemicals is pursuing a major acquisition. Competition is intensifying not only in petrochemicals, which are mired in a structural downturn, but also in growth areas such as automotive resins and composite materials, prompting the company to accelerate its business restructuring.
Mitsui Chemicals had previously identified three growth pillars: information and communications technology (ICT), healthcare and mobility. In light of the acquisition, however, it has decided to include its mobility business—which includes automotive composite materials—in the businesses to be spun off, along with petrochemicals. Going forward, it will focus growth on ICT, including semiconductor materials, and healthcare.
JSR is the world’s second-largest photoresist maker, behind TOKYO OHKA KOGYO CO., LTD.; photoresists are used to form semiconductor circuits. Mitsui Chemicals is the world’s leading supplier of pellicles, the film materials that protect photomasks from contamination, but its product lineup had not included other key materials with large markets, such as photoresists.
Adding JSR’s photoresists and polishing materials to its existing pellicles and resin tapes would broaden Mitsui Chemicals’ range of materials for semiconductor manufacturing. Last year, Mitsui Chemicals also joined JIC and Dai Nippon Printing Co., Ltd. in acquiring semiconductor package substrate maker Shinko Electric Industries. The strategy is to strengthen its core materials and advanced packaging-related businesses and expand its business ties with global semiconductor customers.
The two companies coming together have each worked with SK hynix on HBM manufacturing and the development of materials for next-generation DRAM.
Mitsui Chemicals ICT Material, a subsidiary of Mitsui Chemicals, helped address technical challenges in HBM manufacturing through products such as its E-Cross Tape process protection tape, and received SK hynix’s “AI First Mover Award” last year. JSR subsidiary Inpria has also announced a joint development project with SK hynix for metal-oxide photoresists using extreme ultraviolet (EUV) technology for next-generation DRAM.
For South Korea’s semiconductor industry, the significance is that a materials supplier with which companies already work will become a major supplier with a broader product range. DBJ cited stronger competitiveness by leveraging the two companies’ technologies and customer bases, as well as a stable supply of materials, as expected benefits of the deal. Competition with domestic materials suppliers will also hinge on whether research and development investment and joint development with customers expand after the acquisition.
JIC, which is selling JSR, acquired the company in 2024 for about 1 trillion yen (about 8.56 trillion won) and took it private. After restructuring its business, JSR recorded revenue of 440.7 billion yen (about 3.7724 trillion won) and a record net profit of 60.7 billion yen (about 519.6 billion won) in the fiscal year ending March 2026. The sale will be the first substantial recovery of investment funds from among JIC’s major investments since the organization was established.

The market reacted first to the financial burden rather than the prospect of business expansion. When news broke on the 4th that Mitsui Chemicals was pursuing an acquisition of JSR, its share price fell 14% intraday from the previous trading day, hitting its lowest level in about seven months.
Mitsui Chemicals also acquired U.S. dental materials maker Ultradent last August. Its free cash flow is expected to show a deficit of 112.5 billion yen (about 963 billion won) from April to September this year. It had posted a surplus of 69.6 billion yen (about 595.8 billion won) in the same period a year earlier.
At the end of June this year, Mitsui Chemicals had 217.8 billion yen (about 1.8644 trillion won) in cash and cash equivalents. Having also gone ahead with the acquisition of Ultradent since then, it will need to raise substantial external funding to acquire JSR. DBJ’s co-investment will ease some of the burden, but how Mitsui Chemicals secures the remaining funds will be key.
Kazuaki Shimada, chief strategist at IwaiCosmo Securities Co., Ltd., said, “The acquisition price is large relative to Mitsui Chemicals’ financial strength, and the share price is at a level that reflects concerns about the risk of a capital increase.” Masami Sawato, a senior analyst at SBI SECURITIES Co., Ltd., also raised the possibility of combining borrowing with preferred shares, subordinated financing and asset sales.
In Japan’s chemical industry, Showa Denko set a precedent in 2020 by acquiring Hitachi Chemical for about 1 trillion yen (about 856 billion won). The company, now renamed Resonac Holdings, boosted its market valuation after selling noncore businesses and restructuring its operations around semiconductor materials.
[email protected] Seo Hye-jin Reporter