Japan announces $3.9bn subsidies to chip joint venture Rapidus

Japan will provide further subsidies of up to 590 billion yen ($3.9 billion) to the semiconductor joint venture Rapidus, the economics ministry announced Tuesday.

The news comes as Japan competes with the United States and Europe for chipmakers, offering tens of billions of dollars in public backing.

Rapidus, which includes a number of Japanese technology companies as well as the US behemoth IBM, plans to manufacture cutting-edge two-nanometer logic chips in the northern province of Hokkaido later this decade.

“The Rapidus project is extremely important (as it concerns) state-of-the-art semiconductors that can influence the competitiveness of Japan’s industry as a whole,” economy ministry official Hidemichi Shimizu told reporters.

To assist treble the sales of chips made in Japan to more than 15 trillion yen by 2030, the government has already said that it will make up to four trillion yen in state sweeteners accessible.

Public funds of several hundred billion yen have already been obtained by Rapidus.

The government wants to return the Japanese tech industry to its heyday in the 1980s, when companies like Toshiba and NEC controlled the microprocessor industry.

Japan’s market share fell from over 50% to about 10% globally due to competition from South Korea and Taiwan.

The $8.6-billion semiconductor giant Taiwan Semiconductor Manufacturing Company (TSMC) inaugurated a new facility in February on the island of Kyushu in southern Japan.

The Japanese government pledged to pay more than 40 percent of the costs for the facility.

Lured by more Japanese government support, TSMC has announced a second facility, which will make more advanced chips, and is reportedly eyeing a third and possibly a fourth.

Others getting state funds include Japan’s Kioxia and Micron of the United States.

TSMC’s new facility is also part of a push by the firm to diversify production away from its home base in Taiwan.

China claims the self-ruled island as its own territory and has not ruled out taking it by force.

Lured by public money elsewhere, TSMC is building a second factory in the US state of Arizona and plans another in Germany, its first in Europe.

But despite US President Joe Biden’s administration offering subsidies of $52.7 billion for the sector, the Arizona TSMC plant has been delayed and has seen disputes with unions.

The new TSMC plant in Japan took a relatively short 22 months to build, earning praise from the firm’s founder Morris Chang, 92, who made a rare trip to open the plant.