A wafer prototype at a Rapidus Corp. exhibit.Photographer: Kiyoshi Ota/Bloomberg
March 31, 2025 at 1:45 AM UTC
Japan is preparing as much as ¥802.5 billion ($5.4 billion) in additional aid for chip startup Rapidus Corp., a move that reflects Tokyo’s growing resolve to secure semiconductors during a time of heightened US-China tensions.
That brings the total amount of public money earmarked for the country’s effort to build an advanced chip contractor to a maximum ¥1.72 trillion, plus another ¥100 billion that’s been proposed. Japan’s Economy Ministry is also pushing for debt guarantees to encourage more private sector investment into the fledgling company.
Most of the world’s advanced logic chips used to develop artificial intelligence are manufactured by Taiwan Semiconductor Manufacturing Co., sparking concerns about global reliance on an island that China claims as its own. Those fears, coupled with US President Donald Trump’s “America First” campaign, are also fueling a sense of urgency in Japan that’s helping Rapidus.
For the fiscal year starting April, the ministry approved as much as ¥675.5 billion of additional support for front-end processing, which fabricates silicon wafers before they’re cut into individual chips, and another ¥127 billion for back-end processing, which includes chip packaging and testing. That public aid will likely decline starting the following business year, ministry officials said.
“We are hopeful that private-sector support will emerge in the coming fiscal year,” Hisashi Kanazashi, director of the ministry’s IT industry division, told reporters on Monday. Such fundraising talks with possible corporate and financial partners are proceeding as planned, he added.
Rapidus is on track to begin operating a pilot line in April and will begin processing the first batch of wafers before summer, he said. The startup, backed by Toyota Motor Corp., Sony Group Corp. and SoftBank Corp. aims to begin mass production of next-generation chips in 2027, a highly ambitious target. Rapidus has been fielding talks with several dozen chip designers, its Chief Executive Officer Atsuyoshi Koike said last week.
In recent years, Japan has pledged about ¥5.4 trillion in an attempt to claw back some of its former leadership in chip technology. The country still has leading market share in silicon wafers, as well as in certain chip materials and gear, but has ceded supremacy in the more lucrative parts of semiconductor design and production to chipmakers in the US and Taiwan.
Prime Minister Shigeru Ishiba has promised fresh public support for the country’s chip and AI sectors, and a bill to enable loan guarantees and an issuance of government bonds tied to the energy special account is expected to be submitted to parliament during the current session set to end in June. Parliament is slated to approve roughly ¥333 billion in the fiscal year starting in April geared at boosting the country’s chip and AI sectors.