Japan to pour additional $5.4 bn into chipmaker Rapidus

Japan announced on Monday that it would inject over $5 billion into Rapidus, a semiconductor venture aiming to mass-produce next-generation chips in the country by 2027. The country’s industry ministry revealed it would provide 802.5 billion yen ($5.4 billion) to Rapidus, a joint venture involving major companies like Sony, Toyota, and IBM.

This new funding brings Japan’s total assistance to Rapidus to 1.7 trillion yen. The company, which is set to begin test production at its Hokkaido factory in April, plans to mass-produce logic chips using cutting-edge two-nanometer technology, representing the next phase in semiconductor advancements.

As global demand for advanced semiconductors continues to rise, driven by the growing use of artificial intelligence, securing a stable supply of chips has become a major concern for Japan, which once dominated the hardware industry in the 1980s. Despite Japan’s decline in the global semiconductor market, now accounting for just 10 percent, it remains a leader in chip-making equipment and materials.

Rapidus chairman Tetsuro Higashi referred to the project as Japan’s “last opportunity” to reassert itself in the global semiconductor market. While Japan faces significant challenges to catch up, the move reflects the increasing importance of semiconductors, which power technologies ranging from mobile phones to cars.

In the context of rising geopolitical tensions, including concerns over potential disruptions in Taiwan’s chip production, companies like Taiwan’s TSMC are diversifying their operations, with TSMC opening new factories in Japan, including a $8.6 billion facility and plans for a $20 billion plant.