Japan allocates $5 billion to chip startup Rapidus
Tokyo injects $5.4 billion into Rapidus to boost chip production
Japan has committed up to 802.5 billion yen ($5.4 billion) in additional aid to Rapidus Corp., a chip startup backed by major domestic companies, as part of its strategic push to secure semiconductor supplies amid escalating US-China tensions.
The Ministry of Economy, Trade and Industry (METI) announced Monday that it approved 675.5 billion yen in funding for front-end chip processing and another 127 billion yen for back-end packaging and testing, reports Bloomberg.
This latest funding round raises the total government investment in Rapidus to as much as 1.72 trillion yen, underscoring Japan’s determination to re-establish its presence in the global semiconductor industry.
Ambitious Goals in a Competitive Market
Rapidus, founded with backing from Toyota Motor Corp., Sony Group Corp., and SoftBank Corp., aims to become a leading player in advanced chip manufacturing. The company plans to bring a pilot production line online in April and has set a highly ambitious target to begin mass-producing next-generation semiconductors by 2027.
The move is part of a broader effort by Japan to reduce reliance on foreign chipmakers, particularly Taiwan Semiconductor Manufacturing Co. (TSMC) and South Korea’s Samsung Electronics. TSMC remains the dominant player in advanced semiconductor production, but Japan sees Rapidus as a crucial part of its long-term strategy to regain leadership in the field.
Strategic Implications and Challenges Ahead
Japan’s investment in Rapidus aligns with broader global efforts to strengthen domestic semiconductor production and mitigate supply chain risks. As geopolitical tensions between the US and China intensify, securing a reliable chip supply has become a national priority for many economies.
However, Rapidus faces significant challenges in meeting its 2027 production goal, including the need for advanced manufacturing expertise and global partnerships. Whether Japan’s substantial investment will be enough to establish the company as a major competitor remains to be seen.
Reminder, artificial intelligence startup Scale AI is seeking a valuation of up to $25 billion through a potential tender offer, as it looks to capitalize on soaring demand for AI technology.
