Longtime Japan watchers could be forgiven for getting a bad feeling upon learning that a government-backed fund is shelling out $6 billion to take control of a domestic technology company.
History is littered with examples of past investments that amounted to bailouts for struggling firms in their twilight years. Elpida Memory was once a global leader in memory chips before industry dynamics changed and management was caught flat-footed.
Around ¥160 billion ($1.7 billion) in fresh investments and loans back in 2009 amounted to naught when it filed for bankruptcy three years later. Then there’s Japan Display, the government-coordinated amalgam of the flat-screen divisions of Sony Group, Hitachi and Toshiba, which was formed in 2011 at the peak of the liquid-crystal display boom. It has posted accumulated operating losses north of $1.6 billion since 2017.