Japan to inject an additional 400 billion yen between fiscal 2027 and 2029
Total government investment to scale up to 6500 billion yen
Japan is injecting massive state funds to reclaim its status as a premier semiconductor manufacturing nation. The Japanese government plans to invest an additional 400 billion yen (approx. 3.4 trillion won) over the next three years into Rapidus, which is pushing to mass-produce 2-nanometer (nm) chips. If realized, this latest plan will bring the government’s cumulative investment to 6500 billion yen.
According to Japanese media reports including Jiji Press and Kyodo News on the 20th, the Ministry of Economy, Trade and Industry (METI) unveiled the additional investment plan the previous day during a meeting of the Ministry of Finance's Fiscal System Council.
METI plans to inject 150 billion yen in fiscal 2027, 150 billion yen in fiscal 2028, and 100 billion yen in fiscal 2029. If executed as scheduled, the Japanese government’s cumulative investment in Rapidus will increase from the existing 2500 billion yen to 6500 billion yen (approx. 5.5 trillion won).
The Japanese government is fostering Rapidus as the cornerstone of its domestic advanced semiconductor manufacturing revival. Once a dominant force in the global memory chip market, Japan saw its manufacturing competitiveness wane due to the rise of South Korean and Taiwanese rivals, but it has recently been expanding its industrial base by simultaneously attracting cutting-edge production facilities and nurturing domestic players.
Developing 2nm technology with IBM, targeting mass production in the second half of fiscal 2027
Rapidus is an advanced Japanese foundry venture established in 2022. Collaborating with U.S.-based IBM, the company is developing 2nm process technology and targets mass production in the second half of fiscal 2027 at its Chitose plant in Hokkaido.
Rapidus launched a 2nm test production line at the Chitose plant in April last year and confirmed the operation of next-generation gate-all-around (GAA) transistors in July. In December of the same year, it released early versions of the process design kit (PDK) required for clients' chip designs, steadily advancing preparations for mass production.
Investments from the private sector are also continuing. In February of this year, Rapidus secured a total of 167.6 billion yen from 32 companies, including Sony Group, SoftBank, NTT, Canon, and Fujitsu. The Japanese government also made two capital injections totaling 2500 billion yen in February and June of this year.
This additional investment is also aimed at strengthening the financial foundation required to secure large-scale private loans. Rapidus is currently in talks with financial institutions for roughly 2 trillion yen in financing to expand its production facilities. METI explained that maintaining a certain level of capital adequacy ratio is necessary to obtain loans from private financial institutions.
METI assessed that as Rapidus' business progresses, the likelihood of securing investment returns has also increased compared to before. Financial institutions have submitted non-binding letters of intent regarding the 2 trillion yen loan, and negotiations for actual loan execution are underway.
In the current cutting-edge foundry market, TSMC and Samsung Electronics are locked in a fierce competition for the 2nm process. While Japan boasts strengths in semiconductor materials and equipment, its production base for advanced logic chips remains limited. Should Rapidus succeed in mass production as planned, Japan will secure a production foothold capable of competing with South Korean and Taiwanese giants in the ultra-advanced foundry market.
