Japan ups Rapidus funding

Japan just put another ¥631.5 billion behind Rapidus, a four-year-old chip startup that is trying to do in Hokkaido what only a handful of companies can do anywhere: make the most advanced logic chips on Earth. Bloomberg reported the new aid on April 11 and said total state support for Rapidus is set to reach about ¥2.6 trillion by the end of this fiscal year. (bloomberg.com) Rapidus is not building memory chips like the ones Japan once dominated. It is chasing logic chips, the processors that run artificial intelligence systems, data centers, and smartphones, using a 2-nanometer manufacturing process it says it wants in mass production by 2027. (rapidus.inc) (bloomberg.com) A nanometer in chipmaking is industry shorthand for a new generation, not a ruler measurement you can check with a tape measure. The smaller generation usually lets chip designers pack in more computing power while cutting electricity use, which is why 2-nanometer chips are the prize in the artificial intelligence race. (ibm.com) (rapidus.inc) The hard part is that almost nobody knows how to manufacture those chips at scale. Taiwan Semiconductor Manufacturing Company, Samsung Electronics, and Intel have spent years and tens of billions of dollars building the factories, tools, and engineering teams needed to make leading-edge logic chips. (bloomberg.com) (ibm.com) Japan used to be a semiconductor superpower in the 1980s, but it lost ground in leading-edge logic manufacturing as production shifted overseas. Rapidus was set up in August 2022 to reverse part of that decline, with backing from companies including Toyota Motor, Sony Group, SoftBank, NTT, NEC, Denso, Kioxia, and MUFG Bank. (rapidus.inc) (bloomberg.com) The company’s plan depends on borrowing someone else’s playbook fast. IBM has been transferring 2-nanometer process technology to Rapidus, and the two sides expanded their partnership in June 2024 to cover chiplet packaging, which is the method of combining several smaller chips into one high-performance package. (ibm.com 1) (ibm.com 2) Rapidus is building its main plant in Chitose, on Japan’s northern island of Hokkaido, and calls the site IIM-1, short for Innovative Integration for Manufacturing. The company says the factory is meant to serve as both a research base and a manufacturing base for next-generation logic semiconductors. (rapidus.inc 1) (rapidus.inc 2) Tokyo is funding this even though the odds are long because chips now look like energy or defense: too important to leave entirely to foreign supply chains. Japan has already poured money into Taiwan Semiconductor Manufacturing Company’s Kumamoto project and into memory-chip and materials programs, and its 2026 budget planning sharply increased support for chips and artificial intelligence. (bloomberg.com) (mof.go.jp) The new subsidy does not mean Rapidus has solved the business problem. Bloomberg said the company still aims to raise roughly ¥3 trillion from private investors and is targeting a stock market listing around fiscal 2031, which means the factory challenge is now tied to a financing challenge almost as large. (bloomberg.com) That is why this bet looks unusual even by semiconductor standards. Japan is not just helping a national champion expand an existing lead; it is trying to buy its way back into a club it left years ago, with a startup founded in 2022, a factory still ramping in 2026, and a deadline of 2027 for 2-nanometer mass production. (rapidus.inc) (bloomberg.com)