Japan’s government has earmarked an additional ¥802.5 billion ($5.4bn) to invest in chipmaking startup Rapidus.
It means the amount of public money committed to Rapidus now stands at a maximum of ¥1.72 trillion ($11.46bn).
Tokyo is keen to bolster its domestic semiconductor production capabilities in light of the ongoing trade war between the US and China, which poses a threat to the stability of chip supply chains.
For the financial year beginning in April, Rapidus will receive as much as ¥675.5 billion ($4.49bn) from Japanese taxpayers to put towards the process of making silicon wafers. An additional ¥127 billion ($846m) will go towards back-end processing, which includes chip packaging and testing.
Rapidus was founded in November 2022 by the Japanese government and industry partners, including SoftBank, Sony, and NTT, with the aim of boosting domestic chip production. At the time, it was said the company would develop sub-2 nanometer chips using technology licensed from IBM.
In December 2024, the company took delivery of an ASML TWINSCAN NXE:3800E, an EUV lithography tool needed to make advanced chips. In a statement at the time, Rapidus said the delivery of the system represented a “significant milestone for Japan’s semiconductor industry, marking the first time that an EUV lithography tool will be used for mass production in the country.”
Last year, the Japanese government committed some ¥10 trillion ($65bn) to back advanced chip production, with some of these funds earmarked for Rapidus. The move proved controversial, with some politicians criticizing the plan because it involved redirecting Covid-19 relief money that was meant to help SMEs.
Rapidus hopes to start manufacturing chips at scale in 2027. Ministers said on Monday that public support for the company would likely be scaled back in 2026.
“We are hopeful that private-sector support will emerge in the coming fiscal year,” Hisashi Kanazashi, director of Japanese tech ministry's IT industry division, said in comments reported by Bloomberg. He added that fundraising talks were ongoing with potential partners.
Japan was once a powerhouse of semiconductor production but, like the rest of the world, has come to heavily rely on advanced chips manufactured in Taiwan by TSMC. Ongoing hostilities between the US and China mean Taiwan's future is uncertain, and this has led governments around the world to take steps to reshore chip production.
