Resonac Holdings Corp is ready to spend hundreds of billions of yen on chip acquisitions, as the 84-year-old chemicals giant seeks to boost its role as a pivotal supplier to global giants such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co.
The Japanese company, which last year outlined a ￥250 billion (US$1.94 billion) blueprint to enhance its chip facilities by 2027, aims to capitalize on a much-needed consolidation of the US$580 billion semiconductor industry, CEO Hidehito Takahashi said.
Resonac, which changed its name from Showa Denko to reflect its changing focus, must find partners to thrive in an increasingly politicized and economically uncertain environment, he said.
Photo: AFP
Takahashi said there are not many attractive acquisition targets right now as the industry is in a state of flux, but Resonac is looking to invest, and one promising country is the US, as its major customers, from Samsung to TSMC, spend billions to build plants there.
The Japanese company remains cautious about spending in China, given Washington’s escalating campaign to curb that country’s semiconductor industry, he said.
“I’m always on the lookout for potential acquisition chances, and I wouldn’t hesitate to spend a hundred billion yen if it merits restructuring our business portfolio,” the 61-year-old executive said.
“When a deal is justified, I will go ahead and throw hundreds of billions of yen at it as there are many financial tools for us to leverage,” he said. “The problem is that no one wants to sell businesses that are growing.”
Demand for chips cratered last year after consumers and businesses turned cautious about spending on everything from servers to smartphones. Washington’s effort to curb Beijing’s ambitions in semiconductors, as well as uncertainty about a potential global recession, have clouded the sector’s prospects.
“Everyone in the industry feels uneasy going it alone,” Takahashi said. “I have no doubt consolidation is ahead for the industry, and the key is forming as many alliances as possible.”
Some could evolve into acquisition talks, he added.
Growing through acquisitions is part of Resonac’s well-established playbook.
Takahashi, a former General Electric Co executive, led one of the Japanese company’s most transformative deals. Resonac paid more than double its market value for the chemicals unit of Hitachi Ltd in 2020, a US$8.8 billion deal that made it a major supplier of a key compound used to polish the surface of silicon wafers.
Resonac leads the market in key semiconductor packaging materials such as copper-clad laminates and photosensitive film, and it aims to increase the proportion of revenue from chip materials to 45 percent of overall sales by 2030 from 31 percent in 2021.
The company is researching next-generation 3D packaging technology, anticipating a potential industry shift that could drive its next phase of growth.
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