According to a Reuters report, the Japanese government has proposed a USD 65.1 billion (JPY 10 trillion) plan to boost the domestic chip and AI industry through subsidies and other financial support.

The plan aims to provide support totaling USD 65 billion (JPY 10 trillion) by fiscal 2030, with the goal of strengthening Japan’s control over its chip supply chain in response to potential impacts from U.S.-China trade tensions, as noted in the report.

The report indicated that Japan’s government is set to submit this plan to the next parliamentary session, and the draft includes financial support for mass production of next-generation chips, specifically targeting Rapidus and other AI chip suppliers. The report highlighted that, the government anticipates an economic impact of approximately JPY 160 trillion according to the draft.

Rapidus is scheduled to begin mass production of cutting-edge chips in Hokkaido starting in 2027, in collaboration with IBM and the Belgium-based research organization Imec, as the report pointed out.

According to the report, Japanese Prime Minister Shigeru Ishiba stated that the government would not issue deficit-covering bonds to fund the chip industry support plan. However, detailed information on how the plan will be financed has not been disclosed.

Last year, the Japanese government announced that it would allocate approximately JPY 2 trillion to boost its chip industry, as the report noted.

The latest plan is part of a comprehensive economic package anticipated for Cabinet approval on November 22, calling for a total investment of JPY 50 trillion in the chip industry from both public and private sectors over the next 10 years, according to the report from the Reuters.

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• [News] Japanese Chipmaker Rapidus to Receive EUV Machine by Year-end, Boosting Hokkaido’s Economy
• [News] Sony and Kioxia Reportedly Plan Additional Investments in Chip Foundry Rapidus

(Photo credit: Rapidus)

Rapidus is building a factory in Chitose City, Hokkaido, aiming to mass-produce 2 nm wafers in 2027. According to a report from MoneyDJ, Japan’s Minister of Economy, Trade and Industry visited Rapidus’s factory under construction on October 24th, considering to offer additional assistance to Rapidus.

The president of Rapidus claimed that if the mass production of 2 nm goes smoothly, the second factory plans to mass produce 1.4 nm, according to the report from MoneyDJ.

The report from MoneyDJ, citing sources from Kyodo News, stated that Japanese Minister of Economy, Trade and Industry Muto Yoji, following the visit, announced at a press conference that the government is considering providing additional support to Rapidus. This includes exploring private sector investments and loans, as well as the possibility of submitting a bill to Congress for loans and funding for Rapidus.

According to Kyodo News, Rapidus President Atsuyoshi Koike stated that construction is progressing smoothly and is 80% complete. He also emphasized that if mass production of the 2 nm process goes well, they plan to build another plant aimed at producing 1.4 nm chips.

Regarding clients for the 2 nm process, Rapidus President Atsuyoshi Koike mentioned in a press conference on October 3rd that, in addition to the already disclosed companies, they are negotiating with 40 others, with potential announcements expected next year.

According to a report from Nippon news, on October 18th, Toyota Motor Corp. and Denso Corp. are considering making additional investments in Rapidus. The news pointed out that Rapidus has been asking shareholders and others for investments reaching 100 billion yen.

According to the report from MoneyDJ, Rapidus aims to mass-produce 2-nm chips in 2027. This mass production plan is estimated to require approximately 5 trillion yen. Currently, the Japanese government has decided to assist Rapidus with 920 billion yen, but there is still a funding gap about 4 trillion yen.

According to a report from Nikkei, the Japanese government has considered to transferring government-subsidized plants and equipment to Rapidus in exchange for company shares.

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• [News] Japanese Chipmaker Rapidus to Receive EUV Machine by Year-end, Boosting Hokkaido’s Economy
• [News] Rapidus Reportedly Pursues JPY 100 Billion in Bank Financing for Mass Production

(Photo credit: Rapidus)

According to TechNews, citing a report from Nikkei, the Chitose government stated that approximately 50% of the construction of the pilot production line at chipmaker Rapidus’s Hokkaido plant was completed in September. Construction for other processes, such as chip manufacturing, began in October. Notably, Rapidus is set to start receiving EUV machines in December.

According to the report from Nikkei, the economic growth generated by Rapidus is estimated to reach JPY18.8 trillion for Hokkaido. With approximately 4,000 construction workers at the new plant, new apartments and restaurants are being gradually built to accommodate the needs of Rapidus employees and those from other companies. Additionally, Rapidus aims to transform Hokkaido into a comprehensive hub for semiconductor manufacturing, research and development, and human resource development.

However, the situation remains complicated due to the substantial funding required. According to the report in Nikkei, it is estimated that massproducing 2nm chips requires JPY 5 trillion in funding. As per a report from Kyodo News on August 21st, the Japan-based chip manufacturer is expected to begin mass production of 2nm chips by 2027. To secure the necessary funds for semiconductor production, Rapidus is reportedly seeking JPY 100 billion in financing from banks. 

While Japan’s Ministry of Economy, Trade and Industry has provided subsidies totaling JPY 920 billion, there is still a shortfall of approximately JPY 4 trillion. The central government plans to submit a legislative proposal to parliament to increase subsidies for Rapidus, as noted by the report in Nikkei.

The report from Nikkei indicated that the Japanese government is also considering transferring government-subsidized plants and equipment to Rapidus in exchange for company shares. Masakazu Tokura, president of the Japan Keidanren (Japan Business Federation), stated that the government should provide long-term support to achieve Japan’s goal of revitalizing its semiconductor manufacturing capabilities.

(Photo credit: Rapidus)

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• [News] Rapidus Reportedly Pursues JPY 100 Billion in Bank Financing for Mass Production

As per a report from Kyodo News on August 21st, that the Japan-based chip manufacturer Rapidus is expected to begin mass production of 2nm chips by 2027. To secure the necessary funds for semiconductor production, Rapidus is reportedly seeking JPY 100 billion in financing from banks.

Reportedly, Rapidus has requested financing from Japan’s three major banks—Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking Corporation, and Mizuho Bank—as well as from the Development Bank of Japan.

Additionally, Rapidus has asked existing shareholders, including Toyota, for additional investment. The response of these shareholders is now a key point of interest.

Rapidus, established in August 2022, is a joint venture funded by eight Japanese companies: Toyota, Sony, NTT, NEC, SoftBank, Denso, NAND Flash maker Kioxia, and Mitsubishi UFJ.

The report further indicates that Rapidus currently relies mainly on government subsidies to advance its projects. To achieve its goal of mass-producing 2nm chips by 2027, a total investment of approximately JPY 5 trillion from both public and private sectors is expected.

If Rapidus secures the requested 100 billion yen in financing, it would mark the first major funding from financial institutions, representing a significant step forward for the company.

Per an earlier report from Nikkei, the Japanese government has so far decided to provide JPY 920 billion in subsidies to Rapidus. Additionally, the eight private Japanese companies, including Toyota, have invested JPY 7.3 billion in the venture.

However, there remains a funding gap of about JPY 4 trillion. Establishing production technology and acquiring customers are challenging tasks, and some banks are cautious about providing financing, which may pose obstacles to meeting the funding requirements.

Nikkei’s report on August 10 also pointed out that Rapidus, which began construction on its 2nm wafer fab in Hokkaido last September, plans to start mass production of 2nm chips by 2027.

The external construction of the facility is expected to be completed in October this year, with the installation of Japan’s first extreme ultraviolet (EUV) lithography equipment scheduled for December. The plan includes introducing several additional EUV machines in the future.

Koike expressed confidence in achieving the 2027 mass production goal and emphasized that Rapidus aims to produce semiconductors at least twice as fast as its competitors, with potential speed increases for smaller batches.

He also addressed that the company will collaborate with Japan’s top material and equipment suppliers to lower costs and produce globally competitive products.

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• [News] Rapidus to Fully Automate 2nm Fab, Claiming Chip Delivery Times at One-Third of Its Competitors
• [News] Japanese Government Reportedly Plans to Offer Guaranteed Loans to Chip Startup Rapidus

(Photo credit: Rapidus)

According to a report by Nikkei, Japanese chip manufacturer Rapidus plans to establish a fully automated production line using robots and AI in northern Japan to produce 2nm chips for advanced AI applications, with mass production anticipated as early as 2027.

Reportedly, Rapidus claims that automated production will significantly accelerate production times, reducing chip delivery time to just one-third of that of its competitors. The company’s fab is expected to complete its external structure by October, with EUV lithography system set to arrive in December.

Compared to other companies already operating fabs, building a fully automated plant could give Rapidus a significant advantage. While the front-end of chip manufacturing are already highly automated, the back-end processes, such as packaging and testing, remain labor-intensive.

Rapidus CEO Atsuyoshi Koike stated that this approach will deliver higher performance and faster turnaround times for the same 2nm products compared to other competing chipmakers.

Per a report from Tom’s Hardware, Rapidus is currently two years behind TSMC and Samsung, both of which are expected to begin 2nm chip production in 2025. If Rapidus can deliver chips faster without compromising on price or quality, it may secure a place in the market.

Despite the optimistic outlook, Rapidus faces operational challenges. The company revealed that it will need JPY 2 trillion (approximately USD 14 billion) to begin operation in 2025, and at least JPY 5 trillion in total for the start of mass production.

Although Rapidus has received JPY 920 billion in subsidies from the Japanese government, private companies remain hesitant to invest due to the company’s lack of track record.

Atsuyoshi Koike added that, given the current situation, it is difficult for Rapidus to secure private financing. The company is discussing ways to make financing easier, such as implementing a government loan guarantee system.

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• [News] Japanese Government Reportedly Plans to Offer Guaranteed Loans to Chip Startup Rapidus
• [News] Rapidus Partners RISC-V Player Esperanto, Targeting Low-Power AI Chip

(Photo credit: Rapidus)