Japan backs Rapidus with ¥631.5bn

Japan just added another ¥631.5 billion to Rapidus, a chip startup that did not exist four years ago and is now supposed to put Japan back into the race for the world’s most advanced semiconductors. Reuters reported the new approval on April 11, 2026, and Bloomberg said it lifts Japan’s backing for the project to roughly ¥2.35 trillion to ¥2.4 trillion, or about $15 billion to $16 billion. (reuters.com) (bloomberg.com) Rapidus is trying to make logic chips at the 2-nanometer generation, which is the class of processors used for the fastest artificial intelligence servers, smartphones, and data-center hardware. Only Taiwan Semiconductor Manufacturing Company, Samsung Electronics, and Intel are seriously competing at that edge of manufacturing today. (reuters.com) (trendforce.com) Japan used to dominate chips in the 1980s, when Japanese companies produced more than half of the world’s semiconductors. Then manufacturing leadership shifted to Taiwan, South Korea, and the United States as costs exploded and Japanese firms lost ground in the most advanced logic processes. (reuters.com) (japan.kantei.go.jp) Rapidus was set up in 2022 with backing from eight Japanese companies, including Toyota, Sony, SoftBank, Kioxia, Denso, NEC, NTT, and MUFG Bank. The idea was simple: build a domestic foundry, which is a factory that manufactures chips designed by other companies, so Japan is not fully dependent on overseas plants. (rapidus.inc) (reuters.com) The factory is called Innovative Integration for Manufacturing 1, or IIM-1, and it is in Chitose, Hokkaido. Rapidus said the site had a working pilot line by 2025 and announced successful operation of its 2-nanometer gate-all-around transistors in July 2025. (rapidus.inc) (globalsmt.net) That transistor design matters because gate-all-around is the new switch structure the industry uses when the old design starts leaking too much electricity at tiny sizes. IBM developed a 2-nanometer process technology that Rapidus licensed and is helping transfer into manufacturing. (rapidus.inc) (reuters.com) The timing is brutal. Taiwan Semiconductor Manufacturing Company is already producing advanced chips at scale, Samsung has years of foundry experience, and Intel is spending heavily to win outside customers, so Rapidus is trying to enter the hardest manufacturing business in the world after its rivals have already built giant ecosystems. (reuters.com) (bloomberg.com) Japan is not funding Rapidus just to make money on one factory. The government has spent the past few years subsidizing a broader domestic chip base, including support for Taiwan Semiconductor Manufacturing Company’s plant in Kumamoto and memory-chip investment at home, because carmakers, defense planners, and electronics groups all learned during the supply crunch that chip shortages can shut down entire industries. (reuters.com) (japan.kantei.go.jp) The new money is also tied to customers. Bloomberg reported that part of the push is meant to support work for Fujitsu, giving Rapidus a real chip design to build instead of a factory waiting for orders. (bloomberg.com) (europesays.com) Rapidus has said it wants mass production in 2027, which leaves about a year to move from pilot-line proof to repeatable manufacturing with acceptable yields, meaning enough good chips per wafer to make the economics work. In chipmaking, that step is usually where physics problems turn into financial problems. (globalsmt.net) (reuters.com) So this was not just a subsidy announcement on April 11, 2026. It was Japan saying that advanced chips are now treated like energy, defense, or food supply: too strategic to leave entirely to the market, and too important to source from one island and a handful of foreign companies. (reuters.com) (bloomberg.com)