Consortium forms Rapidus to get Japan back into chip race at 2nm

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By Peter Clarke

A consortium of eight Japanese companies have formed Rapidus, a company that the Japanese government hopes can help the country get back into advanced chip manufacturing, according to local reports.

The company was launched at a press conference held by Yasutoshi Nishimura, Minister for Economy, Trade and Industry, on Friday, November 11.

The companies – Toyota, Sony, NTT, SoftBank, Kioxia, Denso, NEC and MUFG Bank – have invested a total of 7.3 billion yen (about US$51.5 million) to create the company, the reports said. The company chairman is Tetsuro Higashi, former president of chip equipment firm Tokyo Electron.

In addition the Japanese government intends to provide Rapidus with 70 billion yen (about US$490 million) in subsidies to support a project to develop 2nm chips working with IBM.

Billions of dollars

Japan’s government will likely invest billions of dollars more going forward and wants to attract both US and European chip-related companies to the venture, according to Reuters, quoting an unnamed government official. Lithography equipment supplier ASML Holdings NV is one of few European companies that could have a contribution to make.

The plan is also aligned with an announcement reported earlier this week under which the Japanese government said it had set aside a budget of 350 billion yen (about US$2.4 billion) to create a joint R&D hub with US and European participants (see Japan budgets $2.4 billion for chip R&D hub with US, Europe).

That operation is called the Leading-edge Semiconductor Technology Center (LSTC) and Rapidus will be a participant, the reports said. LSTC is due to be established by the end of the fiscal year with the goal of putting in place the ability to make 2nm chips in the second half of the decade.

Process off the shelf

While the amounts of funding disclosed so far would appear be too small to establish a full-fledged advance chip manufacturer with a road-map to future technology, the consortium does have access to an already-created 2nm manufacturing process from IBM (see IBM announces 2nm chip, and manufacturing process).

IBM was one of the pioneers of the semiconductor industry and has continued with semiconductor research long after it had started to make use of third-party and foundry suppliers. It is possible that Rapidus may try to adopt a novel financial approach whereby it owns and develops its own process but uses partners for the capital-intensive business of planning, building and owning wafer fabs. One or multiple fabs could be built based on joint ventures between US and Japanese companies or Japanese companies working independently.

“As the rivalry between the US and China over tech supremacy has been intensifying, chips are becoming more important in terms of economic security,” Nishimura told a news conference, according to The Japan Times.

Let’s get political

The latest development is based on an agreement signed between the US and Japanese governments in May 2022 (see Japan, US make plans for independent 2nm production).

A document released by Japan’s industry ministry says Japan is ten years behind in the race to develop next-generation chips, saying this is “the last chance” to compete globally.

Japan is already subsidizing inward investors in chip manufacturing including, TSMC and Micron. “We will facilitate investment and make sure to establish chip supply chains in Japan,” The Japan Times reported Nishimura saying.

Related links and articles:

News articles:

Japan budgets $2.4 billion for chip R&D hub with US, Europe

Japan, US make plans for independent 2nm production

IBM announces 2nm chip, and manufacturing process

Sony to invest $500 million in TSMC wafer fab deal

Japan will provide Micron with $320 million subsidy

Kioxia, Western Digital to get $690 million subsidy for wafer fab


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