Japan is preparing as much as ￥802.5 billion (US$5.4 billion) in additional aid for chip start-up Rapidus Corp, a move that reflects Tokyo’s growing resolve to secure semiconductors during a time of heightened US-China tensions.
That brings the total amount of public money earmarked for the country’s effort to build an advanced chip contractor to a maximum ￥1.72 trillion, plus another ￥100 billion that has been proposed. The Japanese Ministry of Economy, Trade and Industry is also pushing for debt guarantees to encourage more private sector investment into the fledgling company.
Most of the world’s advanced logic chips used to develop artificial intelligence (AI) are manufactured by Taiwan Semiconductor Manufacturing Co (台積電), sparking concerns about global reliance on Taiwan. Those fears, coupled with US President Donald Trump’s “America first” campaign, are also fueling a sense of urgency in Japan that’s helping Rapidus.
Photo: Bloomberg
For the fiscal year starting this month, the Japanese ministry approved as much as ￥675.5 billion of additional support for front-end processing, which fabricates silicon wafers before they are cut into individual chip, and another ￥127 billion for back-end processing, which includes chip packaging and testing. That public aid would likely decline beginning in the following business year, ministry officials said.
“We are hopeful that private-sector support will emerge in the coming fiscal year,” Hisashi Kanazashi, director of the ministry’s IT industry division, told reporters yesterday. Such fundraising talks with possible corporate and financial partners are proceeding as planned, he added.
Rapidus is on track to begin operating a pilot line this month and would begin processing the first batch of wafers before summer, he added.
The start-up, backed by Toyota Motor Corp, Sony Group Corp and Softbank Corp, aims to begin mass production of next-generation chips in 2027, a highly ambitious target.
Japan has pledged about ￥5.4 trillion in an attempt to claw back some of its former leadership in chip technology. The country still has a leading market share in silicon wafers, as well as in certain chip materials and gear, but has ceded supremacy in the more lucrative parts of semiconductor design and production to chipmakers in the US and Taiwan.
Japanese Prime Minister Shigeru Ishiba has promised fresh public support for the country’s chip and AI sectors, and a bill to enable loan guarantees and an issuance of government bonds tied to the energy special account is expected to be submitted to the Japanese Diet during the current session set to end in June.
The Diet is slated to approve about ￥333 billion in the fiscal year starting this month geared at boosting the country’s chip and AI sectors.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
AI: Softbank’s stake increases in Nvidia and TSMC reflect Masayoshi Son’s effort to gain a foothold in key nodes of the AI value chain, from chip design to data infrastructure Softbank Group Corp is building up stakes in Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the latest reflection of founder Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence (AI). The Japanese technology investor raised its stake in Nvidia to about US$3 billion by the end of March, up from US$1 billion in the prior quarter, regulatory filings showed. It bought about US$330 million worth of TSMC shares and US$170 million in Oracle Corp, they showed. Softbank’s signature Vision Fund has also monetized almost US$2 billion of public and private assets in the first half of this year,
POWELL SUCCESSOR: US Fed Governor Adriana Kugler’s resignation gives Donald Trump an opening on the board, potentially accelerating his decision on the next chair US President Donald Trump suddenly has a chance to fill an opening at the US Federal Reserve earlier than expected, after Fed Governor Adriana Kugler announced her resignation on Friday. It might also force him to pick the next Fed chair months sooner than he had anticipated. “The ball is now in Trump’s court,” LH Meyer/Monetary Policy Analytics Inc economist Derek Tang said. “Trump is the one who’s been putting pressure on the Fed to do this and that, and Trump says he wants to have his own people on. So now he has the opportunity.” Kugler’s exit unfolds amid unprecedented public pressure
RSS