Japan Backs Rapidus Chips

Japan just approved another ¥631.5 billion for Rapidus, a chip company that did not exist before 2022 and is now supposed to help put Japan back into the most advanced corner of semiconductor manufacturing. Japan’s industry ministry said the new money will speed up research and development, pushing total public research support for Rapidus to about ¥2.354 trillion. (reuters.com) Rapidus is trying to make 2-nanometer logic chips, the tiny computing parts used in the brains of data centers, phones, and artificial intelligence systems. The company says it is aiming for mass production in fiscal 2027 at its plant in Chitose on Japan’s northern island of Hokkaido. (rapidus.inc) (jiji.com) A nanometer is one-billionth of a meter, and “2 nanometer” is industry shorthand for a very advanced generation of chipmaking rather than a literal ruler measurement. The point is that these chips pack more computing power into less space while cutting electricity use, which is why they sit at the center of the artificial intelligence race. (ibm.com) (rapidus.inc) Japan used to dominate semiconductors in the 1980s, when Japanese companies supplied a huge share of the world’s memory chips, but it lost ground over decades as Taiwan and South Korea built bigger and faster manufacturing ecosystems. Rapidus is Tokyo’s attempt to jump back in at the deep end instead of climbing back through older chip generations first. (csis.org) (bloomberg.com) This is not Japan’s first chip subsidy push. Tokyo already backed Taiwan Semiconductor Manufacturing Company’s factories in Kumamoto, but those plants are focused on more mature chips than the frontier products Rapidus wants to sell, so the two projects fill different gaps in Japan’s supply chain. (reuters.com 1) (reuters.com 2) Rapidus is not building this from scratch alone. It has been working with International Business Machines, better known as IBM, on 2-nanometer process technology and expanded that partnership in 2024 to include chiplet packaging, which is a way of snapping smaller chip blocks together like high-speed Lego pieces. (ibm.com) The company says its pilot line in Chitose is already running, which means engineers are testing the manufacturing flow before full commercial production. Rapidus said in July 2025 that it had successfully operated gate-all-around transistors, a newer transistor design that wraps the switch more tightly to improve speed and power efficiency at the 2-nanometer generation. (rapidus.inc) The new subsidy is also meant to help Rapidus land actual customers, not just prove the factory works in a lab-like setting. Bloomberg reported that part of the capital will support work for Fujitsu, one of the first intended clients Tokyo hopes can help turn Rapidus from a national project into a real chip foundry business. (bloomberg.com) The scale of the bet is enormous because advanced chip factories are among the most expensive industrial projects on earth. Bloomberg reported that Japan plans to inject about ¥2.6 trillion into Rapidus by the end of the current fiscal year, while the company is still expected to raise roughly ¥3 trillion more from private investors and lenders. (bloomberg.com) That leaves Rapidus chasing a deadline that even established giants struggle to hit. If the 2027 production target slips, Japan will have spent trillions of yen on a company trying to catch Taiwan Semiconductor Manufacturing Company, Samsung Electronics, and Intel in the hardest manufacturing race in the world. (reuters.com 1) (reuters.com 2)