Japan Approves $3.9 Billion in Aid to Chip Venture Rapidus

(Bloomberg) -- Japan approved up to ¥590 billion ($3.9 billion) in subsidies to chip venture Rapidus Corp., committing more money to its ambition to catch up in semiconductor manufacturing.

Tokyo greenlighted the bulk of aid the Economy Ministry sought for the 19-month-old startup and its long-shot bid to compete in contact chipmaking with leaders Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. The amount is on top of billions of dollars Rapidus has already received from the government to mass produce chips in Chitose in Japan’s northernmost prefecture of Hokkaido in 2027.

Economy Minister Ken Saito confirmed the subsidy amount during a regular news conference Tuesday.

Japan Aims for $10 Billion in Subsidies for TSMC Plant, Rapidus

The sum is part of around ¥4 trillion Japan has earmarked over the last three years to regain some of its former chipmaking prowess, with Prime Minister Fumio Kishida targeting ¥10 trillion in financial support to chipmakers, along with the private sector. Japan has committed billions of dollars into TSMC’s first factory in Kumamoto, southern Japan, as well as to Micron Technology Inc.’s expansion at its Hiroshima plant to make advanced DRAM.

Rapidus is teaming up with researchers at IBM Corp. as well as its own experts in nanotechnology and materials to close the gap with TSMC in cutting-edge fabrication technology. TSMC comprises much of the world’s outsourced advanced chip production, with closest rival Samsung struggling for years to catch up.

Growing geopolitical tensions are spurring governments around the world to broaden domestic capabilities to make semiconductors, which are crucial for running cars, power plants and weapons systems, as well as consumer electronics. The US has also pledged billions of dollars to chipmakers, but delays in licensing and subsidy allocations have held back factory construction plans.

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