Japan Gives Green Light to $3.9 Billion in Aid for Chip Venture Rapidus

Japan has approved a whopping ¥590 billion ($3.9 billion) in subsidies to chip venture Rapidus Corp., in a bold move to bolster its semiconductor manufacturing capabilities. This additional funding will enable Rapidus to purchase chipmaking equipment and develop advanced back-end chipmaking processes, according to Economy Minister Ken Saito.

The 19-month-old startup has already received ¥330 billion in public funds, but this latest injection of capital underscores Japan’s determination to compete with industry leaders like Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. Saito emphasized the importance of Rapidus’ work on next-generation semiconductors, stating that it will play a crucial role in shaping the future of Japanese industry and economic growth.

Following the announcement, Japanese chip equipment makers saw a surge in their stock prices, with Tokyo Electron Ltd. climbing 3.5% and Disco Corp. gaining 2.5% during morning trade. This investment is part of Japan’s broader strategy to regain its former chipmaking prowess, with Prime Minister Fumio Kishida aiming to provide ¥10 trillion in financial support to chipmakers, in collaboration with the private sector.

The global push to enhance domestic semiconductor capabilities comes amid growing geopolitical tensions and the recognition of chips’ critical role in various industries, from consumer electronics to defense systems. Rapidus is collaborating with Japan’s researchers in nanotechnology and materials to bridge the gap with industry giants like TSMC in cutting-edge fabrication technology.

A significant portion of the newly approved subsidies will be allocated to installing equipment for the pilot line at Rapidus’s Chitose plant and developing advanced packaging technologies. This investment reflects Japan’s acknowledgment of the pivotal role that semiconductors play in digitalization, decarbonization, and economic security. Saito emphasized that chips are the foundation of not only Japan’s industries but also those around the world.