Japan to Invest US$640 Million in Rapidus in Push for Domestic Chip Capacity
Japan is preparing a fresh round of investment in Rapidus, the state-backed semiconductor venture tasked with rebuilding the country’s presence in advanced chip manufacturing.
The government plans to inject around ¥100 billion (about US$640 million) in equity funding, part of a broader strategy to support domestic production of cutting-edge semiconductors as global supply concerns persist.
Rapidus was created in 2022 with backing from major Japanese companies, including ToyotaDealroom has a profile for this one. Try Dealroom →, SonyDealroom has a profile for this one. Try Dealroom → and NTTDealroom has a profile for this one. Try Dealroom →, and has since become central to Tokyo’s push to reduce reliance on foreign foundries.
The company aims to begin mass production of 2-nanometre chips in fiscal 2027 at its R&D and manufacturing hub in Hokkaido—an aggressive timeline for an industry dominated by Taiwan’s TSMC and South Korea’s SamsungDealroom has a profile for this one. Try Dealroom →. Rapidus expects to achieve positive free cash flow by around fiscal 2029.
The latest funding comes through a government facility that allows the state to acquire equity in strategic technology firms. In addition to the current commitment, Tokyo plans to provide roughly ¥150 billion (US$960 million) in fiscal 2026 to help scale production capacity. Rapidus’s midterm plan estimates that it will need to raise around ¥1 trillion (roughly US$6.4 billion) from private investors by 2031 as it moves toward becoming a full-fledged contract chip manufacturer.
Japan’s renewed urgency stems from growing geopolitical tension around Taiwan, a key player in global chip supply. Policymakers argue that securing domestic access to advanced semiconductors is essential not only for economic competitiveness but also for national security, particularly as demand accelerates across sectors such as data centres, artificial intelligence, robotics and automotive manufacturing.
Looking ahead, Rapidus is targeting an initial public offering around fiscal 2031, once its production lines have stabilised and private-sector investment broadens. If successful, the venture would mark Japan’s first homegrown effort in decades to compete at the leading edge of chip fabrication—an area from which the country had largely withdrawn after the 1990s.
Sources:
Bloomberg
BBC
Kazinform
Tech in Asia
J.V.
