Japan has approved an additional subsidy of 631.5 billion yen ($4 billion) for Rapidus Corp. to accelerate its entry into the competitive field of AI chip manufacturing. The funding is intended to support services that Rapidus will provide to IT company Fujitsu Ltd., one of the first customers the Japanese government hopes will help launch this flagship project. Japan's Ministry of Economy, Trade and Industry stated on Saturday that this new funding will bring the total government-infused subsidies and investments into the startup to 2.6 trillion yen (approximately $16.3 billion) by the end of the current fiscal year in March 2027. The ministry also mentioned that an external committee inspected Rapidus's foundry in Chitose, Hokkaido, and recognized its technological progress. The emerging company began developing wafers using 2-nanometer technology last year, aiming to achieve mass production of cutting-edge semiconductors by 2027 and help Japan reduce its reliance on industry leader Taiwan Semiconductor Manufacturing. Japanese policymakers believe Rapidus's success and technological independence in areas like artificial intelligence, robotics, and quantum computing are crucial for national security. A significant gap remains between the Japanese chipmaker and Taiwan Semiconductor Manufacturing, which started mass production of 2nm chips last year and is the preferred supplier for NVIDIA and Apple. Beyond technological hurdles, Rapidus—like other resource-constrained Japanese manufacturers—faces pressure from rising energy and raw material costs during conflicts in the Middle East. Tokyo is counting on Rapidus at a time when soaring demand for key chips in AI development is straining global supplies of memory and other semiconductors, threatening economic stability. According to a statement from Japan's Ministry of Health, Labour and Welfare, Rapidus plans an initial public offering around fiscal year 2031, targeting approximately 3 trillion yen in public financing, with some funds expected to come from government loan guarantees. The company has established an analysis center in Chitose, Hokkaido, for testing and diagnosing its chips to improve yields; furthermore, its back-end process development center has also commenced operations.
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