Japan adds 31.2 billion yen in subsidies to the startup Rapidus, betting on breakthroughs in 2-nanometer chips, with a goal of mass production by 2027

The Japanese government has approved an additional subsidy of up to 631.5 billion yen (approximately HKD 31.2 billion) to the domestic chip manufacturer Rapidus to help the company break into the highly competitive AI chip sector. This funding will primarily be used to support Rapidus in conducting research and development for Japan's IT giant Fujitsu, which is one of the first customers that Japan hopes will help drive this landmark project forward. Founded in 2022, Rapidus focuses on advanced semiconductor manufacturing and is jointly funded by the Japanese government and several large corporations, including Toyota, Sony, and SoftBank. On Saturday, the Ministry of Economy, Trade and Industry of Japan announced that, along with this new funding, the total amount of funds injected into Rapidus by the Japanese government will reach 2.6 trillion yen (approximately HKD 128 billion) by the end of the fiscal year in March 2027. At the same time, the ministry revealed that an external committee has conducted an on-site inspection of Rapidus's wafer factory located in Hokkaido, northern Japan, and has recognized its technological progress. Rapidus began developing wafers using 2-nanometer technology last year, aiming for mass production of cutting-edge semiconductors before 2027 and helping Japan reduce its dependence on industry leader TSMC. Policymakers believe that the success of Rapidus and Japan's technological independence in AI, robotics, and quantum computing are crucial for national security. Currently Still Far Behind TSMC However, reports indicate that Rapidus is still far behind TSMC. TSMC not only began mass production of 2-nanometer chips last year but is also the preferred chip foundry for tech giants like NVIDIA and Apple. At the same time, due to the impact of geopolitical conflicts in the Middle East, Rapidus is under pressure from rising energy and raw material costs, and the surging global demand for AI chips is squeezing the supply of memory and other semiconductors, threatening economic stability. In this situation, the Tokyo government has no choice but to bet on Rapidus. Aiming for an IPO in Fiscal Year 2031 The Ministry of Economy, Trade and Industry stated in a press release that Rapidus's long-term goal is to conduct an initial public offering (IPO) around the fiscal year 2031 and plans to raise approximately 3 trillion yen (about HKD 147.5 billion) from the private sector with the assistance of government loan guarantees