The Japanese Ministry of Industry has pumped an additional ¥631.5 billion (that's about $4 billion) into the semiconductor startup Rapidus to accelerate research and development (R&D) in the company. Rapidus is a Japanese semiconductor company founded in 2022 with a mission to produce next-generation 2-nanometre chips by 2027.
The Japanese government's new funding to the company is for the purpose of accelerating domestic production of advanced semiconductors and strengthening chip supply chains, making the total support from the government exceed ¥2.354 trillion (between $15 and $16 billion). You can always think of Rapidus as Japan’s attempt to compete with giants like TSMC, Samsung, and Intel.
However, Rapidus is not working alone. Japan’s government-backed agency, the New Energy and Industrial Technology Development Organization (NEDO), is also supporting related semiconductor initiatives, including design projects involving Fujitsu and IBM Japan.
Japan is rebuilding a lost industry
Japan used to dominate semiconductors in the 1980s (~50% global share) but fell to ~10% by 2019. The country is now investing heavily to get back its position. The country thinks if Rapidus can meet the mass production target of 2-nanometre chips by 2027, it'll be less dependent on foreign chipmakers and have more domestic control.
2-nanometre chips are semiconductor chips that are faster, more energy-efficient, and critical for AI, data centres, robotics, and advanced computing, making the chips one of the hardest engineering problems on Earth. The production is part of a global tech race, and companies like TSMC have decades of experience and a massive scale advantage over Rapidus. This is why experts say the production may be impossible for Rapidus.
In collaboration with major technology partners, Rapidus plans to begin the mass production of the next-generation logic semiconductors at the 2-nanometre scale in the 2027 fiscal year. IBM contributes to pioneering 2nm fabrication techniques, while Fujitsu focuses on designing high-performance chips for real-world applications such as computing systems and digital infrastructure.
Together, these companies' efforts form part of the push to position Japan at the forefront of the most advanced technology in the world. In February, the company secured a combined investment of about 160 billion yen from private companies, with a planned 250 billion yen from the government. Rapidus is also backed by Toyota, Sony, and SoftBank.
