Japan has announced its approval of up to 590 billion yen (equivalent to $3.89 billion) in extra subsidies for chipmaker Rapidus Corporation as part of its efforts to close the gap in semiconductor manufacturing compared to other nations. The new funding will allocate up to 53.5 billion yen for research and development focusing on back-end processes like chip packaging, as stated in a press briefing by Japan's Ministry of Economy, Trade, and Industry.
Rapidus Corporation was founded in 2022 by the Japanese government and eight domestic companies to develop and manufacture advanced semiconductors. Toyota Motor Corporation, Sony Group are among the companies that have invested billions of yen in Rapidus. Rapidus received 330 billion yen from the Japanese government between 2022 and 2023 to mass-produce 2-nanometer chips in Chitose, Hokkaido, from 2027.
It is set to compete with industry frontrunners such as Taiwan Semiconductor Manufacturing Company (TSMC) and South Korea's Samsung Electronics. Both TSMC and Samsung have intentions to commence mass production of 2-nanometer chips by 2025, whereas they are currently manufacturing 3-nanometer chips. Rapidus, meanwhile, is in the process of constructing an advanced semiconductor plant in Chitose. Typically, a decrease in nanometer size can result in more potent and efficient chips with a higher density of transistors integrated onto a single semiconductor.
Rapidus announced that its employees had commenced collaborative research and development with IBM. Japan has been working diligently to regain its status as a leading force in semiconductor production, a position it had previously lost to countries like Taiwan and South Korea. “Japan occupied more than half of the global semiconductor market in the 1980s, but other countries have been leading in this industry ever since. While plants in other parts of the world are currently mass producing 3-nm chips, the most advanced generation produced in Japan now is the 40-nm chip”, the Japanese government said in a report last month.
Over the past few years, the Japanese government has provided substantial investment incentives to attract both domestic and international semiconductor firms like TSMC, Samsung, and Micron. TSMC, for instance, inaugurated its inaugural chip facility in Japan in February, backed by support from the Japanese government, as part of its strategy to diversify supply chains beyond Taiwan amidst escalating trade tensions between the United States and China.
In May 2023, Micron revealed plans to introduce extreme ultraviolet technology to Japan, making it the pioneer semiconductor company to do so for producing its next generation of dynamic random access memory chips at its Hiroshima plant. Micron anticipates investing up to 500 billion yen in Japan within the coming years, with backing from the Japanese government. Additionally, Samsung is slated to receive a subsidy of up to 20 billion yen to establish a new advanced semiconductor research and development facility near Tokyo, as announced by Japan's industry ministry in December.