Japan’s unwavering support for Rapidus Corp., a government-backed venture aiming to mass produce advanced 2-nanometer logic chips, remains steadfast even if the 2027 target is delayed. According to Daishiro Yamagiwa, chairman of the ruling Liberal Democratic Party’s semiconductor group, the project is central to Japan’s semiconductor strategy.
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Rapidus is progressing steadily, with a pilot production line slated to begin operations in April 2025. This pilot program is a crucial step towards achieving the ultimate goal of mass production. While the initial target was set for 2027, Yamagiwa stated that a potential shift to 2028 would not diminish the government’s commitment. He emphasized the project’s critical role in Japan’s broader economic and technological advancement.
Rapidus chip production
This ambitious endeavor involves a multibillion-dollar investment aimed at establishing a domestic manufacturer capable of producing next-generation semiconductors. Backed by prominent Japanese companies like Toyota Motor Corp. and Sony Group Corp., Rapidus aims to compete with industry giants Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics Co., both of which are projected to commence large-scale 2nm chip production in the coming year.
Yamagiwa acknowledges the inherent risks and challenges associated with such a complex undertaking. He is cognizant of past government initiatives that failed to revitalize Japan’s chipmaking sector. However, he underscored the critical nature of this project for Japan’s economic survival and national security.
Overcoming Challenges and Securing Funding
Recognizing the significant financial requirements, the ruling party is preparing legislation to facilitate increased funding for chipmakers, including Rapidus. Yamagiwa expressed confidence in securing broad parliamentary support for this initiative, highlighting the crucial role of semiconductor technology in both economic prosperity and national security. This renewed government focus has already yielded positive results in certain regional economies.
Japanese Parliament Building
Japan has committed substantial financial resources to support its semiconductor and artificial intelligence industries, with a planned investment of ¥10 trillion ($65 billion) by fiscal 2030. Prime Minister Shigeru Ishiba’s recent economic stimulus package allocated approximately ¥1.5 trillion to jumpstart these initiatives. This new funding mechanism complements previously allocated funds of around ¥4 trillion, which includes ¥920 billion specifically designated for Rapidus.
Attracting Private Investment and Long-Term Sustainability
While public funding provides initial momentum, attracting significant private investment is crucial for the long-term sustainability of Rapidus. Yamagiwa believes that the demonstration of viable products through the pilot line in 2025 will instill greater confidence among potential investors. By showcasing the tangible connection between Rapidus’ technology and end products like automobiles, the company aims to attract the necessary private capital. He anticipates that government funding will not be required to cover the entire estimated ¥5 trillion needed for Rapidus to become fully operational. The ultimate goal is to transition to a self-sustaining business model independent of government financial support.
Conceptual image representing private investment
To foster private investment in the chip and AI sectors, the government intends to implement a comprehensive strategy encompassing subsidies, tax incentives, and loan guarantees, making investment more attractive and secure. This multifaceted approach aims to create a conducive environment for private sector participation.
Navigating Geopolitical Complexities
Amidst intensifying global competition in semiconductor technology, Japan faces the challenge of balancing its strategic alliance with the US and maintaining vital economic ties with China. Yamagiwa emphasized Japan’s commitment to prioritizing national security while avoiding actions that could escalate tensions. He reiterated the importance of pursuing policies that safeguard national interests while fostering constructive international relationships. This delicate balancing act will likely become even more critical with the return of the Trump administration.
Conclusion: A Future-Focused Endeavor
Japan’s investment in Rapidus signifies a determined effort to regain prominence in the global semiconductor industry. Despite the challenges and potential delays, the government’s unwavering commitment underscores the strategic importance of this venture for Japan’s future economic competitiveness and national security. The success of Rapidus hinges not only on technological breakthroughs but also on securing robust private investment and navigating complex geopolitical dynamics. The coming years will be pivotal in determining whether this ambitious endeavor can transform Japan’s technological landscape.
