On Monday, Japan declared its decision to spend an extra $5 billion in Rapidus, a semiconductor startup that intends to start mass-producing next-generation chips in the country in 2027.
The industry ministry will provide the company, which is a joint venture with Sony, Toyota, IBM, and others, 802.5 billion yen ($5.4 billion).
The ministry said it increases government funding to 1.7 trillion yen for Rapidus, which is set to start trial production at its Hokkaido factory in April.
Global demand for advanced, energy-efficient semiconductors is expected to explode as artificial intelligence technologies play an increasing role in people’s daily lives.
Securing consistent supplies of semiconductors has been a financial and national security issue since Japan dominated the hardware industry in the 1980s.
Rapidus aims to mass-produce logic circuits using two-nanometer technology, the most recent development in semiconductors with an even more amazing number of small transistors.
With Toshiba and NEC at the lead, Japan dominated half of the global semiconductor market from the 1980s until the early 1990s. Even though it still dominates the market for equipment and materials used to create chips, its share of the market is currently only about 10%.
Rapidus chairman Tetsuro Higashi told AFP in an interview last year that the project was the “last opportunity” to put the country’s semiconductor sector back on the global map.
“Japan is more than a decade behind others. It will require enormous money just to catch up,” he said.
Semiconductors, which power everything from cell phones to autos, have become a significant trading area in recent years.
Meanwhile, Taiwanese semiconductor giant TSMC is facing pressure to diversify its production as customers and governments worry about a Chinese invasion of the island.
TSMC, which opened a new $8.6 billion factory in southern Japan last year, plans to build a second, $20 billion unit for more advanced semiconductors.
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