Japan allocates ¥631.5B to Rapidus

Japan just committed another ¥631.5 billion to a chip startup that did not exist four years ago and still has no mass-produced chips on the market. The company is Rapidus, and Tokyo approved the money on April 11 to speed its research and development for advanced semiconductors. (reuters.com) This is not a rescue of an old national champion. Rapidus was created in August 2022 by eight Japanese companies, including Toyota, Sony, Nippon Telegraph and Telephone, SoftBank, NEC, Denso, Kioxia, and MUFG Bank, as a fresh vehicle to rebuild Japan’s presence in leading-edge logic chips. (rapidus.inc) (wikipedia.org) The target is a 2-nanometer chip process, which is the class of chip used for the fastest artificial intelligence and data-center work. “2 nanometer” is industry shorthand for a new generation of manufacturing technology, and Rapidus says it wants mass production in fiscal 2027. (jiji.com) (rapidus.inc) That schedule is why the subsidy is so unusual. Bloomberg reported that the latest package lifts Japan’s total support for Rapidus to about $16 billion, turning the company into one of the biggest state-backed semiconductor bets anywhere. (bloomberg.com) (finance.yahoo.com) Jiji said cumulative state support since fiscal 2022 will reach ¥2.454 trillion, while Reuters said Rapidus’ research and development assistance alone now totals ¥2.354 trillion. The difference suggests Tokyo is using more than one bucket of support, with research money counted separately from other aid. (jiji.com) (reuters.com) Japan is paying this much because the country knows what it lost. Japan held about 50 percent of the global semiconductor market in 1988, and that share is now around 10 percent, even as chips became the basic component inside cars, phones, servers, and military systems. (channelnewsasia.com) Rapidus is also not trying to invent everything alone. It has a 2-nanometer technology collaboration with IBM, and in June 2024 the two companies expanded that relationship to chiplet packaging, which is the method of linking several small chip blocks together inside one package. (ibm.com) The factory at the center of the plan is IIM-1 in Chitose, Hokkaido. Rapidus says the site is already operating a pilot line, and in July 2025 it announced successful operation of gate-all-around transistors, the transistor design used in the newest chip generations. (rapidus.inc) That still leaves the hardest part ahead. Building a pilot line is like getting a prototype race car around one lap, while mass production means making thousands of identical cars every week without failures, and Rapidus is trying to do that against Taiwan Semiconductor Manufacturing Company, Samsung, and Intel. (reuters.com) (msn.com) Japan is hedging its chip revival with two different plays at once. In Kumamoto, it has subsidized Taiwan Semiconductor Manufacturing Company plants to secure mature and mid-advanced production, while Rapidus in Hokkaido is the moonshot aimed at the top tier of logic chips. (channelnewsasia.com) (trendforce.com) So this new ¥631.5 billion is Tokyo saying it would rather overpay for a domestic option than stay dependent on foreign fabs for the most advanced chips. If Rapidus hits fiscal 2027, Japan gets a homegrown supplier for the artificial intelligence era; if it misses, the bill will stand as one of the most expensive industrial gambles in the country’s recent history. (reuters.com) (bloomberg.com)