A Multi-Billion Dollar Gamble on Chip Supremacy
The construction of a new chip plant by Rapidus Corp. is underway in Chitose, Hokkaido, marking a significant step in Japan's ambitious plan to reclaim its position as a leader in the global semiconductor industry. This ambitious project is fueled by a substantial government investment, with an additional 800 billion yen ($5.2 billion) allocated to Rapidus in the supplementary budget proposal.
This latest injection of funds adds to the already committed 920 billion yen, bringing the total government support for Rapidus to an impressive 1.72 trillion yen. However, the company's ambitious goal of mass-producing 2-nanometer semiconductors by 2027 requires an estimated 4 trillion yen, highlighting the scale of the challenge ahead.
This massive investment in Rapidus is part of a broader national strategy to revitalize Japan's semiconductor industry, which has fallen behind global leaders like Taiwan and South Korea. The government's commitment extends beyond Rapidus, with a 1.6-trillion-yen package dedicated to bolstering the nation's semiconductor and artificial intelligence industries. This includes a significant 1.8 trillion yen allocated in the previous fiscal year's supplementary budget.
The government's rationale for this substantial investment is rooted in the growing importance of semiconductors for economic security. Over the past three years, a total of 3.9 trillion yen has been poured into the chip industry, demonstrating the government's unwavering commitment to this critical sector.
However, the government's approach has not been without criticism. Some argue that supplementary budgets should be reserved for urgent projects, while others question the long-term planning and strategic principles behind the support for Rapidus.
To address these concerns, the government has unveiled a new framework to provide extensive support for the semiconductor sector until fiscal 2030. This initiative will draw funding from various sources, including existing funds and revenue from government-held shares. The ambitious goal is to attract 50 trillion yen in public and private investment over the next decade, generating a ripple effect of 160 trillion yen across the economy.
Japan is determined to reclaim its place as a leader in the global semiconductor industry, and this multi-billion dollar investment is a testament to that ambition.