In a move to enhance its semiconductor manufacturing capabilities, Japan has allocated a staggering ¥590 billion ($3.9 billion) in subsidies to chip venture Rapidus Corp. The additional funding, approved by Economy Minister Ken Saito, is a significant step towards Japan’s ambition to catch up with global leaders in the industry, such as Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics Co.
Rapidus Corp., a 19-month-old startup based in Japan’s northernmost prefecture of Hokkaido, has already received ¥330 billion in public funding for its semiconductor production endeavors. The latest injection of funds will enable Rapidus to purchase chipmaking equipment and develop advanced back-end chipmaking processes, crucial for its competitiveness in the market.
Minister Saito emphasized the importance of Rapidus’ work, stating that the next-generation semiconductors the company is developing will play a pivotal role in shaping the future of Japanese industry and economic growth. He highlighted the significance of the current fiscal year for Rapidus, underscoring the urgency of the situation.
Japan’s commitment to revitalizing its semiconductor industry is part of a larger strategy, with the country earmarking around ¥4 trillion over the last three years to regain its former chipmaking prowess. Prime Minister Fumio Kishida has set ambitious targets, aiming for ¥10 trillion in financial support to chipmakers, in collaboration with the private sector.
The geopolitical landscape has also played a role in driving governments worldwide to bolster domestic semiconductor capabilities. Semiconductors are vital for a wide range of applications, from consumer electronics to automotive and defense systems. The U.S. has also pledged billions of dollars to support its chipmakers, but challenges such as licensing delays and subsidy allocations have hindered progress in factory construction plans.
Rapidus is partnering with Japan’s leading researchers in nanotechnology and materials to bridge the gap with TSMC in cutting-edge fabrication technology. The company plans to use a significant portion of the subsidies to install equipment for its pilot line, enlist researchers from IBM Corp., and develop advanced packaging technologies. These efforts aim to enhance production capabilities and shorten turnaround times, crucial for staying competitive in the market.
Rapidus President Atsuyoshi Koike expressed gratitude for the subsidies, noting that they are essential for realizing the company’s goal of mass producing semiconductors using 2-nanometer processes by 2027. The company aims to achieve production cycles that are twice as fast as its competitors, setting a high bar for innovation and efficiency in the industry.
Economy Minister Saito reflected on Japan’s past economic challenges, attributing three decades of stagnation and loss of international competitiveness in part to a lack of understanding about the importance of semiconductors. He emphasized that chips are the foundation for Japan’s industries and those around the world, highlighting the critical role they play in digitalization, decarbonization, and economic security.
With the substantial subsidies and strategic partnerships in place, Rapidus Corp. is poised to make significant strides in semiconductor manufacturing, contributing to Japan’s economic revitalization and global technological leadership.
(Source: Nikkei Asia | CNBC | Bloomberg)
