Japan moves to boost domestic AI chips

Japan approved another ¥631.5 billion, about $4 billion, for chipmaker Rapidus on April 11 as Tokyo pushes to build advanced artificial-intelligence chips at home. (reuters.com) The new subsidy came from Japan’s Ministry of Economy, Trade and Industry and is aimed at speeding research and development at Rapidus, the state-backed startup building a leading-edge foundry in Chitose, Hokkaido. (reuters.com) Rapidus is targeting mass production of 2-nanometer logic chips in 2027, after starting up its pilot line in April 2025 and installing extreme ultraviolet lithography tools at its Hokkaido site. (rapidus.inc) A foundry is a contract chip factory: designers bring blueprints, and the plant turns them into silicon wafers. Rapidus says its 2-nanometer process is being developed with International Business Machines and uses gate-all-around transistors, a newer design for squeezing more performance from less power. (rapidus.inc) Tokyo has been widening that push beyond one company. In December 2025, Japan’s industry ministry moved to nearly quadruple budgeted support for advanced semiconductors and artificial intelligence to about ¥1.23 trillion for the fiscal year that began in April 2026. (bloomberg.com) Japan is also backing foreign manufacturers on its soil. Taiwan Semiconductor Manufacturing Company, through its Japan Advanced Semiconductor Manufacturing venture in Kumamoto, said in February 2024 that a second fab is scheduled to begin operating by the end of 2027. (tsmc.com) The country’s chip strategy follows a long decline from its 1980s peak. Japan now holds about 10% of the global semiconductor market, down from 50% in 1988, according to Channel News Asia. (channelnewsasia.com) Rapidus still faces the hard part: turning a subsidized pilot line into a reliable commercial factory in a market dominated by Taiwan Semiconductor Manufacturing Company, Samsung Electronics and Nvidia-powered artificial-intelligence demand. For now, Japan is paying to make sure at least one domestic contender reaches the starting line. (bloomberg.com)