Japan to invest $1.6b in Rapidus to boost semiconductor production

Japan will invest 250 billion yen (US$1.6 billion) over the next two financial years in Rapidus Corp., a state-backed chipmaker, to boost domestic semiconductor production.

The funding brings Japan closer to its goal of providing 3 trillion yen (US$19.3 billion) in total support to help Rapidus mass-produce 2-nanometer logic chips and potentially challenge industry leader Taiwan Semiconductor Manufacturing Co. (TSMC).

Tomoshige Nambu of Japan’s Ministry of Economy, Trade and Industry said the government will initially hold about 10% of Rapidus’s voting shares and the majority of its non-voting stock, with the right to convert these into voting shares to seize majority control if the company faces financial distress.

He added the government will acquire “golden shares” granting ultimate veto power over major corporate changes.

Prime Minister Sanae Takaichi views domestic chipmaking as vital for economic security, with the economy ministry planning to nearly quadruple support for cutting-edge semiconductors and AI to about 1.23 trillion yen (US$7.9 billion) for the fiscal year starting in April.

Rapidus has also secured a total of 167.6 billion yen (US$1.08 billion) from some 30 private companies to support mass production by March 2028.

Takaichi has secured a pledge from TSMC to upgrade its technology and plants in Japan.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Rapidus’s timeline depends on IBM

Public funding targets the rollout of IBM’s 2-nanometer technology rather than building it from zero 1.
Rapidus engineers work alongside IBM researchers at a facility in Albany, New York, to learn the manufacturing steps and bring that know-how back to Japan 1.
The method uses gate-all-around (GAA) transistors, an architectural change from today’s designs that makes yield improvement a tough hurdle 2.
Rapidus expects mass production in the second half of fiscal year 2027, then plans to lift capacity by more than four times within the first year. That pace carries risk for a new entrant 2.
At its Chitose site in Hokkaido, the company intends to keep fabrication plus back-end work such as dicing and packaging in one place to reduce handoffs and cut time between wafer processing and final packaging 2.

Japan is rebuilding a full semiconductor ecosystem

Backers treat Rapidus as part of a national push to revive domestic chips, with a plan for ¥3 trillion in total support to help mass-produce 2-nanometer logic chips 2.
New specialized hubs are meant to grow a local supply chain that can serve both Rapidus and Taiwan Semiconductor Manufacturing Co. (TSMC) 3.
TSMC has pledged technology upgrades plus plant improvements in Japan, which strengthens access to advanced chips used in AI workloads.
Two foundries operating in Japan could improve supply security for local industry, including Toyota, which invests in TSMC’s Japan venture 4.
These state-backed foundries still need global customers. Steady orders will decide whether the strategy works 2.