Japan Approves $3.9 Billion in Subsidies for Semiconductor Manufacturer Rapidus

Japan has approved up to USD 3.9 billion in subsidies for the semiconductor manufacturer Rapidus Corporation. This decision is part of Japan's broader strategy to regain its position in the semiconductor market. The subsidy will include up to USD 350 million for research and development of back-end processes such as semiconductor fabrication. This move is expected to enhance chip performance, a critical aspect of semiconductor technology.

Rapidus Corporation, founded in 2022 by the Japanese government and eight domestic companies, including Toyota Motor Corporation and Sony Group, aims to develop and manufacture advanced semiconductors. The company received USD 2.1 billion from the Japanese government between 2022 and 2023 to mass-produce 2-nanometer chips in Chitose, Hokkaido, in 2027.

The Japanese government has extended significant investment support to attract both domestic and foreign semiconductor companies, such as TSMC, Samsung, and Micron. TSMC recently opened its first semiconductor plant in Japan in February, with support from the Japanese government.

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Rapidus plans to compete with global semiconductor companies by starting to mass produce 2-nanometer chips by 2025. Currently, TSMC and Samsung produce 3-nanometer chips, while Rapidus is constructing an advanced semiconductor plant in Japan.

Furthermore, the company is teaming up with researchers at IBM Corp. and its own experts in nanotechnology and materials to close the gap with TSMC in cutting-edge fabrication technology.

The Japanese government's commitment to Rapidus and the semiconductor industry reflects its ambition to catch up in semiconductor manufacturing. The subsidies will help Rapidus buy chipmaking equipment and also develop advanced back-end chipmaking processes.

Objectives of the Subsidy

Reviving Japan's Semiconductor Industry

The subsidy is part of Japan's broader strategy to regain its position as a semiconductor powerhouse, which it lost to countries such as Taiwan and South Korea. The government's commitment to Rapidus and the semiconductor industry reflects its ambition to catch up with global semiconductor manufacturing.

Boosting Domestic Manufacturing

Rapidus is a joint venture that the Japanese government and eight domestic companies founded to create and manufacture advanced semiconductors. The subsidy will help Rapidus buy chipmaking equipment and also develop advanced back-end chipmaking processes.

Competing Globally

Rapidus plans to compete with industry leaders Taiwan Semiconductor Manufacturing Company (TSMC) and South Korea’s Samsung Electronics, which plan to start mass production of 2-nanometer chips by 2025. The subsidy will support Rapidus in its goal to mass-produce 2-nanometer chips by 2027.

Securing Supply Chains

Countries around the world are looking to strengthen their control over chip supply chains after global shocks, including the COVID-19 pandemic and trade tensions between the United States and China. The subsidy will help Japan secure its chip supply chain by boosting domestic production.

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