Japan's industry minister said Tuesday the government will offer up to 590 billion yen ($3.9 billion) to domestic chip venture Rapidus Corp. in additional financial aid as the country ramps up efforts to strengthen its domestic semiconductor supply chain.
Combined with the 330 billion yen already earmarked by the ministry, the amount of government aid going into the firm will total almost 1 trillion yen.
The move underscores the country's commitment to reviving the semiconductor industry as chips increasingly become important in ensuring economic security amid growing rivalry between the United States and China.
"Next-generation semiconductors will be a key factor for the future growth of the country's industry," industry minister Ken Saito told a news conference. "The ministry will do its utmost to ensure (Rapidus's) success."
Rapidus aims to start mass production in 2027 of 2-nanometer chips, a next-generation technology expected to be used for 5G communications, quantum computing, and self-driving vehicles. The venture is building a plant in Hokkaido.
The company has said it will need roughly 5 trillion yen for the project, including research and preparation for mass production.
Demand for chips is expected to grow worldwide as digitalization accelerates. The recent artificial intelligence boom is also prompting governments and private firms to invest more in chips as more high-end semiconductors are needed to support the technology.
Rapidus was formed in 2022 with investment from eight major Japanese companies, such as Toyota Motor Corp. and Sony Group Corp.
