Japan's government said it will inject an additional 400 billion yen (about 3.347 trillion won) into Rapidus, a semiconductor company established as a public-private venture, bringing total government equity support to 650 billion yen (5.444 trillion won) including earlier investments.
The Ministry of Economy, Trade and Industry presented the additional investment plan at a meeting of the Fiscal System Council, Japan's Yomiuri Shimbun reported on the 19th. The council, which operates under the Ministry of Finance, discusses matters related to national finances and the budget system and submits opinions to the finance minister.
According to the ministry, the government has included 150 billion yen (1.256 trillion won) in additional equity funding in next year's budget request. Over the longer term, it plans to seek a further 150 billion yen in 2028 and 100 billion yen in 2029. Combined with the 250 billion yen invested this year, the total comes to 650 billion yen.
The government is adding equity to support large-scale private lending. Rapidus aims to begin mass-producing chips with 2-nanometer circuit line widths — one nanometer is one-billionth of a meter — at its plant in Chitose, Hokkaido, starting next year. It plans to borrow 2 trillion yen from commercial banks to expand production lines, but doing so requires a certain level of equity capital.
Rapidus is central to the Japanese government's effort to revive its advanced semiconductor industry. It grew out of a public-private consortium formed in August 2022 with investments from major companies including Toyota, Sony, NTT and SoftBank. Through a technology partnership with IBM of the U.S., the venture set out to leapfrog from Japan's existing 40-nanometer capability straight to 2 nanometers. Only a handful of foundry companies — Taiwan's TSMC, Intel of the U.S. and South Korea's Samsung Electronics (005930.KS) — have succeeded in mass-producing 2-nanometer products, and Rapidus is now challenging them. Under the arrangement, IBM, which lacks manufacturing capacity, provides research technology while Rapidus handles production. The two are also pursuing long-term cooperation on technology below 1 nanometer.
Rapidus is betting on fast production of small volumes. While TSMC focuses on mass-producing a limited range of products, Rapidus aims to respond to customers by quickly turning out customized products. "What matters in the semiconductor business is how fast you can bring new products to market and get customer feedback," Rapidus President Atsuyoshi Koike said. "If we assume we can launch new products three to four times faster than other companies, we can find out what customers are thinking much sooner." To that end, the company has set up what it calls Rapid and Unified Manufacturing Service, or RUMS, which completes front-end and back-end processes in a single building.
Government investment is also accelerating. Japan previously provided a combined 2.3 trillion yen last year and this year in the form of research and development commission fees. The industry ministry is seeking another 300 billion yen in next year's budget. The Asahi Shimbun reported that if the plan is approved, total government support for Rapidus will reach 3.2 trillion yen (26.807 trillion won) by 2029. The ministry also envisions an initial public offering for Rapidus in 2031. Explaining the reason for the additional investment, the ministry said the business is making progress and the outlook for returns on investment is improving relative to earlier expectations.