Japan Pumps $16 Billion into Rapidus, Eyeing Global AI Chip Supremacy
Japan has sanctioned an additional subsidy of 631.5 billion yen (approximately $4 billion) for the startup Rapidus Corp. This move escalates the total government investment to a staggering 2.6 trillion yen ($16.3 billion) by March 2027. The primary objective of this colossal funding is to expedite Rapidus’s entry into the fiercely competitive AI chipmaking market. This is a crucial part of Japan’s strategy to achieve semiconductor independence.
Rapidus, established in 2022 with financial support from major Japanese corporations such as Toyota, Sony, and SoftBank, has set its sights on mass-producing advanced 2-nanometer chips by 2027. The recent capital influx will finance projects for IT firm Fujitsu Ltd., one of the startup’s early clients. An external committee recently inspected Rapidus’ foundry in Hokkaido, northern Japan, and gave a thumbs-up to its technological advancements, as reported by Japan’s Ministry of Economy, Trade and Industry.
This ambitious project is a testament to Japan’s efforts to regain its position as a semiconductor manufacturing powerhouse and to reduce reliance on foreign suppliers. This is particularly significant given the escalating global demand for AI chips. Rapidus has set up an analytical center in Chitose, Hokkaido, for testing and diagnosing chips to enhance production yields. Additionally, it has launched a process technology development center. The company is planning an initial public offering around the fiscal year 2031 and aims to raise approximately 3 trillion yen in private financing, partly through government loan guarantees.
Despite substantial backing, Rapidus is up against stiff competition from established players like TSMC, which commenced mass production of 2nm chips in 2025, and emerging competitors such as Elon Musk’s collaboration with Intel on the Terafab project.
Source: Bloomberg