Honda said to invest in Japan's Rapidus for chip supply

Honda Motor Co. is planning to invest in Tokyo-based chipmaker Rapidus Corp., according to sources.

The move aims to boost domestic production of advanced semiconductors for automated driving systems and strengthen Honda’s supply chain.

Rapidus has previously received funding from Toyota Motor Corp. and Sony Group Corp.

The chipmaker plans to begin mass production of 2-nanometer chips at its Chitose plant in Hokkaido by 2027.

The Japanese government has pledged up to 1.7 trillion yen (US11.8 billion) in financial support.

However, the total cost is estimated at 5 trillion yen (US$34.8 billion), so Rapidus is seeking more support from shareholders and financial institutions.

🔗 Source: The Nation

🧠 Food for thought

1️⃣ Japan’s automotive sector leads the nation’s semiconductor revival strategy

Honda’s planned investment in Rapidus follows Toyota’s earlier commitment, revealing how Japanese automakers are taking a leading role in revitalizing the country’s semiconductor industry.

This coordinated approach marks Japan’s most significant attempt to regain semiconductor manufacturing prowess since its peak in the 1970s, when Japan held 25% of the global semiconductor market share compared to America’s 48% 1.

Rapidus represents Japan’s first new semiconductor fabrication facility in 25 years, backed by substantial government support totaling up to 1.7 trillion yen (approximately $6.1 billion) 2.

The automotive-led semiconductor revival strategy marks a shift from Japan’s previous semiconductor strength in consumer electronics, focusing instead on securing critical technology for autonomous vehicles and national security.

2️⃣ The 2011 tsunami fundamentally changed Japanese automakers’ supply chain strategy

Honda’s investment in Rapidus reflects a shift in how Japanese automakers approach supply chain resilience following the catastrophic disruptions caused by the 2011 Tohoku earthquake and tsunami.

That disaster severely impacted automotive electronics suppliers, resulting in production losses exceeding 4 million vehicle units globally, with 90% of those losses affecting Japanese manufacturers 3.