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(Bloomberg) — Japan approved ¥631.5 billion ($4 billion) in additional subsidies to quicken Rapidus Corp. into the intensely competitive AI chipmaking arena, ramping up financial support for a signature project widely regarded as a long shot.
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The capital is intended to bankroll Rapidus’ work for IT firm Fujitsu Ltd., one of the initial clients that Tokyo hopes will get the signature endeavor off the ground. The new money raises the fees and investments that the government is injecting into the startup to ¥2.6 trillion ($16.3 billion) by the end of the current fiscal year to March 2027, the Economy Ministry said Saturday. An external committee inspected Rapidus’ foundry in Hokkaido in northern Japan, and signed off on its technological progress, the ministry said.
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Tokyo is offering financial support to Rapidus to help it secure customers, Japan’s Minister of Economy, Trade and Industry Ryosei Akazawa told reporters at a Rapidus event in Hokkaido on Saturday. The fledgling company aims to make cutting-edge 2-nanometer chips by 2027, a schedule Akazawa reaffirmed, and help Japan lower its reliance on industry leader Taiwan Semiconductor Manufacturing Co. Policymakers see Rapidus’ success and technological independence in AI, robotics and quantum computing as critical to the country’s security.
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The Japanese chipmaker remains far behind TSMC, which began 2nm volume production last year and is the go-to chipmaker for Nvidia Corp. and Apple Inc. In addition to technological hurdles, Rapidus — like other manufacturers in resource-poor Japan — are getting squeezed by rising costs for energy and material input during the conflict in the Middle East. Tokyo is counting on Rapidus at a time soaring demand for the chips critical to AI development is squeezing supplies of memory and other semiconductors around the world, threatening economic stability.
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Rapidus, which targets an initial public offering around fiscal 2031, aims to secure roughly ¥3 trillion in private-sector financing partly with the help of government loan guarantees, the ministry said in a statement. It has set up an analysis facility in Chitose, Hokkaido to test and diagnose Rapidus’ chips in an attempt to lift yields, and has also begun operations of a backend processes development center.
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—With assistance from Mayumi Negishi and Masatsugu Horie.
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