The Japanese government has announced a ¥70 billion ($500 million) investment in a new venture to manufacture advanced microchips. This latest initiative by the government is part of an attempt to reassert Japan as a leading manufacturer of cutting-edge semiconductor products. Announcement, but Reuters first reported (opens in new tab)describes this as an ‘initial’ investment, suggesting that the Japanese government can put more money into it over the next few years.
The project involves starting a new company called Rapidus. Rapidus will be a joint venture between existing Japanese tech companies such as Sony and NEC, as well as SoftBank, Kioxia, Mitsubishi and Toyota. There are even voices persuading companies in the United States and Europe to join, a person familiar with the matter, who spoke on condition of anonymity, told Reuters.
The Asian archipelago, which once produced more than half of the world’s semiconductors, is looking to revive its semiconductor manufacturing industry after losing ground to China and Taiwan.Concern over the looming US-China trade war (opens in new tab) and threats to Taiwan (opens in new tab) was also used as a basis for judgment.
Japan is providing financial assistance to companies planning to build new foundries in the country, along with new ventures. For example, TSMC received 400 billion yen last year to build a factory in Kumamoto prefecture in Kyushu, far southeast of Japan. The factory is contracted to supply parts to Sony and local automakers. Micron received a ¥46.5 billion pledge this year to expand production at its Hiroshima factory, while Kioxia and Western Digital received ¥93 billion in subsidies to expand production in Japan.
Rapidus plans to start producing chips later this decade. “Semiconductors will become a key factor in the development of new cutting-edge technologies such as AI, digital industry and healthcare,” said Economy, Trade and Industry Minister Yasutoshi Nishimura at a press conference.