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.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
Industrial production expanded 22.31 percent annually last month to 107.51, as increases in demand for high-performance computing (HPC) and artificial intelligence (AI) applications drove demand for locally-made chips and components. The manufacturing production index climbed 23.68 percent year-on-year to 108.37, marking the 14th consecutive month of increase, the Ministry of Economic Affairs said. In the first four months of this year, industrial and manufacturing production indices expanded 14.31 percent and 15.22 percent year-on-year, ministry data showed. The growth momentum is to extend into this month, with the manufacturing production index expected to rise between 11 percent and 15.1 percent annually, Department of Statistics
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald