Japan approves investment of US$3.9 billion in Rapidus – 04/02/2024 – Market

Japan approved around US$3.9 billion (R$20 billion) in subsidies for chip company Rapidus to boost semiconductor manufacturing in the country.

The financing will help Rapidus purchase equipment and also develop advanced chip manufacturing processes, Economy Minister Ken Saito said.

The amount comes on top of the $2.2 billion in public money the 19-month-old startup has already received in its unlikely attempt to mass-produce chips in Japan’s northernmost prefecture, Hokkaido, and compete with Taiwanese leaders TSMC. , and Samsung, from South Korea.

“The next generation chips that Rapidus is working on are the technology that will dictate the future of Japanese industry and economic growth,” Saito said during a press conference held this Tuesday (2) in Tokyo. “This fiscal year is extremely important for Rapidus.”

Shares of Japanese chip equipment makers rose on the news, with Tokyo Electron rising 3.4% and Disco gaining 2.1%.

The amount is part of the roughly 4 trillion yen ($26 billion) Japan has set aside over the past three years to regain some of its old chipmaking capacity, with Prime Minister Fumio Kishida targeting 10 trillion yen ( US$66 billion) in support, together with the private sector.

Japan has committed billions of dollars to TSMC’s first factory in Kumamoto, southern Japan, as well as Micron Technology’s expansion of its factory in Hiroshima to produce advanced DRAM.

Rising geopolitical tensions are encouraging governments around the world to expand domestic capabilities to manufacture semiconductors, which are crucial to running cars, power plants and weapons systems, as well as consumer electronics.

The U.S. has also promised billions of dollars to chipmakers, but delays in granting licenses and allocating subsidies have hampered factory construction plans.

Rapidus is teaming up with the country’s researchers in nanotechnology and materials to close the gap with TSMC in cutting-edge manufacturing technology.

TSMC has most of the world’s outsourced advanced chip production, with closest rival Samsung struggling for years to catch up.

About 536.5 billion yen ($3.5 billion) of the newly approved subsidies will be used to install equipment at the Rapidus factory in Chitose, hire IBM researchers, reduce response times and build a control system. production, according to the Ministry of Economy, Trade and Industry.

The remaining 53.5 billion ($350 million) will be used to develop advanced packaging technologies to help combine multiple chips to increase capabilities.

Packaging is an area that is receiving more attention as putting more transistors on a single piece of silicon becomes increasingly expensive.

The subsidies help put the company on track to achieve its goal of mass-producing semiconductors using 2-nanometer processes by 2027 and achieving production cycles that are twice as fast as competitors, said Rapidus President Atsuyoshi Koike .

“These funds are extremely important for us to make our pilot pipeline a reality.”

Three decades of economic stagnation in Japan and loss of international competitiveness have been caused in part by a lack of understanding about the importance of semiconductors for digitalization, decarbonization and economic security, Saito said.

“It is no exaggeration to say that chips are the basis of industries in this country and the world,” he said.