Japan backs Rapidus

Japan just approved another ¥631.5 billion for Rapidus, a chip company that did not exist before August 2022 and now sits at the center of Japan’s plan to get back into the most advanced end of semiconductor manufacturing. The industry ministry said the new money is for research and development tied to advanced chips and stronger domestic supply chains. (reuters.com) Rapidus is trying to make 2 nanometer logic chips by fiscal 2027, which puts it in the same race as the handful of companies chasing the smallest and fastest processors for artificial intelligence data centers. Japan’s government said cumulative state support for Rapidus since fiscal 2022 will reach about ¥2.454 trillion with this latest package. (jiji.com) A logic chip is the part that does the thinking, not the memory that stores data, and Japan lost ground in this category decades ago even while staying strong in chip materials and production equipment. Rapidus was built to close that gap by doing the hardest step at home instead of shipping the most advanced work abroad. (thediplomat.com) The company started with backing from eight Japanese firms, including Toyota, Sony, SoftBank, NTT, NEC, Denso, Kioxia, and MUFG Bank. That lineup tells you Rapidus is not a normal startup so much as a national consortium with a factory attached. (wikipedia.org) (thediplomat.com) The factory is in Chitose, on Japan’s northern island of Hokkaido, where Rapidus has been running a pilot line called Innovative Integration for Manufacturing 1. In July 2025, the company said it had successfully operated 2 nanometer gate-all-around transistors there, which is one of the key building blocks for this generation of chips. (rapidus.inc 1) (rapidus.inc 2) Gate-all-around is a transistor design where the switch is wrapped by its control gate on all sides, like gripping a hose from every direction instead of pressing it from one side. Chipmakers use that structure because older designs leak too much power when features get this small. (rapidus.inc) Rapidus is not doing this alone. It has been working with International Business Machines on 2 nanometer process technology, and in June 2024 the two sides expanded that partnership into chiplet packaging, which is the method of linking several smaller chips together inside one package. (ibm.com) That packaging step matters because many artificial intelligence chips are no longer one giant slab of silicon. They are more like a set of smaller engines bolted together, and the wiring between them can decide how fast the whole system runs. (ibm.com) The money also arrives after Rapidus said in February 2026 that it had completed a ¥267.6 billion funding round from the Japanese government and private companies. Rapidus said that round would help move it from research into mass production of 2 nanometer logic semiconductors by 2027. (rapidus.inc) Japan is making this bet because advanced chips have turned into economic infrastructure, the way oil refineries or power grids used to be. If the processors that train and run artificial intelligence systems are designed abroad, fabricated abroad, and packaged abroad, then the country buying them has very little control when shortages or export restrictions hit. (reuters.com) (thediplomat.com) The hard part is that money can speed up construction, but it cannot guarantee yields, which is the share of chips on a wafer that actually work. Rapidus now has government cash, corporate sponsors, an IBM technology bridge, and a live pilot line in Hokkaido, but it still has to prove it can turn a laboratory process into a factory business by 2027. (rapidus.inc) (jiji.com)