Semiconductor materials manufacturer JSR agreed to be bought out by a state-backed fund for around JPY909 billion ($6.4 billion), a move signalling deepening investment by the government in the country’s chip industry.

In a statement, Japan Investment Corp (JIC) outlined plans to buy the company and then launch a tender offer later this year to take it private, at JPY4,350 per share.

Financing will provided by government-backed Development Bank of Japan and Mizuho Bank.

The official announcement comes two days after JSR revealed it had received a buy out offer from JIC, which it was considering.

Japan’s government’s moves in the chip sector come as various countries step-up domestic production, with the European Union and the US notably ploughing cash into the sector.

There is also focus on reducing a reliance on China, with the US, Netherlands and Japan restricting exports of chipmaking tools to the country.

In April, Japan’s industy ministry outlined plans to triple sales of semiconductors to JPY15 trillion by 2030.

JSR holds 30 per cent of the global market for photoresists, a light-sensitive material used to etch circuit patterns onto semiconductor wafers.

It counts Intel, Samsung and TSMC among its customer base.

In its statement backing JIC’s offer, JSR’s board said the deal will help the company accelerate investments, enhance global competitiveness of the domestic semiconductor sector and accelerate business expansion into Europe, the US and Asia.