Japan Approves $3.89 Billion Subsidies for Rapidus Corporation's Semiconductor Development

Japan Boosts Subsidies for Rapidus Corporation

On Tuesday, Japan announced its approval to provide up to 590 billion yen (about $3.89 billion) in additional subsidies for chipmaker Rapidus Corporation. This move comes as Japan endeavors to close the gap with other countries in the semiconductor manufacturing sector.

Support Breakdown

The latest allocation of subsidies includes approximately 53.5 billion yen designated for the research and development of back-end processes like chip packaging. This information was shared during a press briefing by Japan's Ministry of Economy, Trade and Industry.

Background of Rapidus Corporation

Established in 2022 by the Japanese government and eight domestic companies, Rapidus Corporation focuses on the development and production of advanced semiconductors. Among the major investors in Rapidus are Toyota Motor Corporation and Sony Group, with both companies having invested billions of yen into the corporation.

Past Funding

Between 2022 and 2023, Rapidus has already received 330 billion yen in funding from the Japanese government. This financial support was aimed at enabling the mass production of 2-nanometer chips in Chitose, Hokkaido, starting from 2027.

Competition and Progress

Rapidus is set to compete with industry giants such as Taiwan Semiconductor Manufacturing Company and South Korea's Samsung Electronics, both of which have plans to commence mass production of 2-nanometer chips by 2025. While TSMC and Samsung are currently producing 3-nanometer chips, Rapidus is in the process of constructing an advanced semiconductor plant in Chitose.

Technological Advancements

A reduction in nanometer size typically results in more powerful and efficient chips, with the capability to accommodate more transistors on a single semiconductor. In April 2023, Rapidus announced that its workforce had initiated collaborative research and development endeavors with IBM.

Efforts to Regain Prominence

In light of losing its semiconductor dominance to countries like Taiwan and South Korea, Japan is striving to reclaim its position as a semiconductor powerhouse. The Japanese government reported that while other regions are currently mass producing 3-nm chips, the most advanced chip generation in Japan currently stands at 40-nanometers.

Attraction of Semiconductor Companies

In recent years, Japan has been making significant investment efforts to attract both domestic and foreign semiconductor companies such as TSMC, Samsung, and Micron. TSMC, for instance, opened its inaugural chip plant in Japan with support from the Japanese government to diversify supply chains away from Taiwan amidst escalating U.S.-China trade tensions.

Micron, on the other hand, disclosed in May 2023 its intentions to introduce extreme ultraviolet technology to Japan for the production of its next generation of dynamic random access memory chips at its Hiroshima plant. The company plans to invest up to 500 billion yen in Japan over the coming years, with backing from the Japanese government.

Furthermore, Samsung is set to receive a subsidy of up to 20 billion yen for the construction of a new R&D facility for advanced semiconductors near Tokyo, as confirmed by Japan's industry ministry in December.