Japan was one of the leading suppliers in the semiconductor industry a few decades ago, but over time it has long since lost its leading position in the relevant market. To remedy the situation, Japanese tech giants including Sony and NEC will spend around $500 million on a new company to restore Japan’s leadership in microchip manufacturing.
“Semiconductors should be a crucial component in the development of new advanced technologies such as AI, digital industry and healthcareMinister of Economy, Trade and Industry Yasutoshi Nishimura said at a recent briefing. According to the Nikkei Asian Review, the nascent Rapidus will develop a new generation of semiconductors that will use manufacturing processes down to 2nm. Contract manufacturing could begin as early as 2030.
As the US-China trade war escalates and Washington restricts China’s access to semiconductor technology, Japan is rushing to revive its semiconductor industry, which has been stagnant in recent years, in order to provide its own automakers and IT companies with modern solutions in this area. Japan does not rule out that China will try to take control of Taiwan, which is now the largest center for the production of advanced semiconductors.
As part of the new strategy, Japan plans to encourage foreign semiconductor manufacturers to build factories in the country, specifically providing more than $2.7 billion in funds to set up a plant in Kumamoto Prefecture TSMC – The plant will Semiconductors to Sony and automotive component maker Denso Corp. deliver.
In July, Japan pledged $635.5 million in subsidies to help chipmakers Kioxia and Western Digital ramp up production in Japan. Funds will also be made available to American Micron Technology to expand production in Hiroshima.
The formation of the new company marks the beginning of a new phase in Japan’s semiconductor strategy. In addition, the country continues to deepen technological cooperation in the relevant field with the United States – in July, Japan and the United States agreed to establish a joint research center to develop fast and energy-efficient semiconductors down to 2nm. The center should be ready for occupancy by the end of this year.
Japan has a lot of catching up to do. The country’s most modern production lines are capable of producing 40nm chips – it has had no comparable opportunity to invest in the industry as competing states, which have been actively investing in the development of the industry since the 2010s.
Rapidus has already secured funding from the New Energy and Industrial Technology Development Organization, Japan’s national research center. Companies such as Toyota, Nippon Telegraph and Telephone Corp, as well as Kioxia Holdings, are also investing in the company.