Yahoo Finance CEO Who Drove $7 Billion Deal Is Eyeing Japan Chip Linchpin JSR
(Bloomberg) -- Resonac Holdings Corp.’s chief executive officer is gearing up for another round of consolidation in Japan’s fragmented chip materials sector, saying the chemicals maker may raise its hand to buy a stake in linchpin JSR Corp.
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Japan Investment Corp.’s $6 billion buyout of JSR, the world’s largest photoresist maker, will catalyze much-needed change in the country’s supply chain when the state-owned fund seeks an exit, Hidehito Takahashi said. Resonac — the chemicals conglomerate created in a merger of Showa Denko KK and Hitachi Chemical Co. — is considering ways to play an active role in JSR’s future, he said.
“I believe we are the most logical partner for JSR,” said the executive, who orchestrated Showa Denko’s purchase of bigger Hitachi Chemical in 2020. “It will be expensive, so we have to think about how we’d do it, but we want to get involved.”
Japan is home to a network of little-known companies that dominate in certain key materials such as photoresists and mask blanks that are indispensable for semiconductor manufacturing. But development costs are climbing as customers demand more performance from each sliver of silicon.
The sector needs to consolidate to stay competitive against overseas rivals, Takahashi said.
“Semiconductor materials is one area where Japan can keep winning on the global stage,” he said. “It doesn’t make any sense for the industry to stay fragmented or for executives to be fixated on staying at the top of their own small fiefdoms.”
Takahashi helped create Resonac by finding financing for a ¥1 trillion ($6.9 billion) acquisition when Showa Denko’s market value was less than half that amount. The maker of materials such as silicon wafer-polishing slurry and etching gas supplies chipmakers including Taiwan Semiconductor Manufacturing Co., Infineon Technologies AG and Rohm Co., according to data compiled by Bloomberg.
The dream is to create a chip materials company with annual revenue of more than ¥1 trillion and an EBITDA margin of 20% or more that’s in the same league as global giants such as 3M Co. and DuPont de Nemours, Inc., he said.
The 61-year-old said he wouldn’t mind leaving the CEO role if it helps make that a reality. Nor does Resonac need to be the primary driver of consolidation, he said.
“I’m not interested in Resonac swallowing everything. There is an ideal the industry should pursue. Let’s think about how we can get there while keeping everyone happy,” Takahashi said. “I’d rather be able to tell my grandchildren that I helped the industry consolidate.”
Profit at Resonac’s chip materials business this year will be on par with its performance in 2022, when it scored record sales of ¥427 billion, Takahashi said. Growing use of artificial intelligence is boosting demand for more complex semiconductors such as stacked chips, helping Resonac because it supplies key materials to manufacture next-generation chips, he said without elaborating.
Resonac has been overhauling its operations to focus more of its resources on the chip sector, and Takahashi said the company would offload more units unrelated to semiconductors. That includes the company’s petrochemical materials, one of its oldest businesses. Finding a buyer won’t be easy, but the company is actively seeking ways to take the unit off its balance sheet, Takahashi said.
“I have no interest in history because it doesn’t put food on the table,” he said.
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