When people talk about the chip race, headlines focus on Nvidia, TSMC and ASML's lithography machines. But there is a link in the chain almost nobody talks about, without which no fab can operate: chemicals. And in that link, Japan rules. According to Reuters, Japan's state-backed investment fund JIC plans to sell JSR, one of the world's largest photoresist suppliers, to Mitsui Chemicals in a deal that could exceed 1.3 trillion yen, about $8.2 billion.
Photoresist is a light-sensitive material coated onto a silicon wafer before lithography. When light shines through the mask, the photoresist changes properties where it is lit, and that is how the chip's pattern is 'etched'. The more advanced the chip, the more precise the photoresist must be, and very few companies in the world can make it at the level needed for the most advanced chips. Most are Japanese, and JSR is among the most prominent.
Mitsui confirmed it is examining various options, including acquiring JSR, but stressed no decision has been made. The market did not wait: Mitsui's stock fell about 13% amid questions over how it would finance a deal of this size. Its market value is about 800 billion yen, and it already carries significant debt. In other words, Mitsui is trying to swallow a company bigger than itself in a field it considers vital.
Why does it matter? Because such deals concentrate control of critical links in the chip chain in even fewer companies and countries. JSR is already owned by a Japanese government fund, which took it over in recent years as part of an effort to preserve Japan's standing in the field. The decision to sell it to another Japanese company rather than a foreign buyer signals that Japan sees these materials as a strategic asset, just as the US sees chips themselves.
For Israel the lesson is indirect but clear. Israel's chip industry, from Nova and Camtek to Tower and Intel's Kiryat Gat fab, depends on a global supply chain in which every link is becoming a geopolitical asset. When countries start treating chemicals like strategic weapons, even companies that seem far from this game discover they depend on it.
