To begin mass production of advanced logic chips in around 2027, the state-backed chip venture Rapidus will need around 7 trillion yen $54 billion of mostly taxpayer money, according to its chairman, Tetsuro Higashi, told Reuters on Thursday.
Japan and the United States set aside old industrial rivalries to take over China as a result of growing geopolitical tension, and that plan may be Japan's last chance to revive its aging semiconductor industry.
In the past, the United States has hindered Japan's chip industry growth. Now we have America's support, according to Higashi in an interview.
The concern has escalated as China has increased pressure on the global chip hub of Taiwan, with nearby military exercises after Chinese anger over visits by U.S. politicians to the self-ruled island.
In December, after an agreement between Japan and the United States to cooperate in semiconductor technology, Rapidus announced a partnership with IBM Corp to develop and produce two-nanometre chips.
A nanometre is a billionth of a metre and the smaller the number, the more cutting-edge the chip is. Japan's most advanced semiconductor factory is a 40 nanometre plant owned by Renesas Electronics.
The location of its first factory will be announced in March, Higashi said.
The former boss of chip machinery maker Tokyo Electron declined to say where but said it wouldn't be close to the site on Kyushu island that Taiwan Semiconductor Manufacturing Company Ltd TSMC recently picked for its first Japan factory.
Rapidus needs to invest in Japan's government, which announced in December 70 billion yen $544 million of initial funding to pay for the factory and buy production equipment.
The eight corporations that have small stakes in Rapidus, including Toyota Motor Corp and Sony Group Corp, are unlikely to stump up any money soon, Higashi said.
The decision to invest will be taken when they are able to assess our technology and production plans.