Japan said Monday it had decided to inject more than $5 billion into semiconductor venture Rapidus. Rapidus aims to mass-produce next-generation chips in the country by 2027.
The Ministry of Industry announced it would allocate 802.5 billion yen ($5.4 billion) to a company that is a joint venture between Sony, Toyota, IBM, and others.
According to the ministry, this funding brings the total government support for Rapidus—set to begin test production at its Hokkaido factory in April—to 1.7 trillion yen.
With the growing importance of artificial intelligence in daily life, global demand for advanced, energy-efficient semiconductors is expected to surge.
Securing a reliable supply of chips has become both a business and national security issue for Japan, which was a dominant force in the hardware industry during the 1980s.
Rapidus plans to mass-produce logic chips using cutting-edge two-nanometer technology, the next frontier in semiconductors, which will feature an even greater density of tiny transistors.
Japan once commanded half of the global microchip market from the 1980s into the early 1990s, with companies like NEC and Toshiba leading the way. However, it now holds about 10 percent of the market, though it still leads in chip-making equipment and materials.
Rapidus chairman Tetsuro Higashi told AFP last year that the project is Japan’s “last opportunity” to restore its semiconductor sector’s prominence on the global stage.
“Japan is more than a decade behind others. It will take enormous investment just to catch up,” he remarked.
Semiconductors, which power everything from mobile phones to cars, have become a crucial trade issue in recent years.
Meanwhile, Taiwan’s TSMC, a major chip producer, is under pressure to diversify its production due to concerns from customers and governments about the potential threat of a Chinese invasion of the island.
TSMC opened an $8.6 billion factory in southern Japan last year and is planning a second facility, worth $20 billion, to produce more advanced chips.
