Japan Announces $3.9bn Subsidies To Chip Joint Venture Rapidus

Japan announces $3.9bn subsidies to chip joint venture Rapidus

Tokyo, (APP - UrduPoint / Pakistan Point News - 2nd Apr, 2024) Japan will make available additional subsidies of up to 590 billion Yen ($3.9 billion) to the semiconductor joint venture Rapidus, the economy ministry said Tuesday.

The announcement comes as Japan competes with the United States and Europe to attract chipmakers with tens of billions of Dollars in state support.

Rapidus involves a host of Japanese tech firms as well as US giant IBM and aims to make state-of-the-art two-nanometre logic chips in the northern region of Hokkaido later this decade.

"The Rapidus project is extremely important (as it concerns) state-of-the-art semiconductors that can influence the competitiveness of Japan's industry as a whole," economy ministry official Hidemichi Shimizu told reporters.

Japan's government has already announced that it is making up to four trillion yen in state sweeteners available to help triple the sales of domestically produced chips to more than 15 trillion yen by 2030.

Rapidus has already secured several hundred billion yen in public money.

The government is hoping to bring back the Japanese tech sector's 1980s glory days, when Japanese firms like Toshiba and NEC dominated the microchip market.

Competition from South Korea and Taiwan saw Japan's global market share slump from more than 50 percent to around 10 percent.

In February, chip behemoth Taiwan Semiconductor Manufacturing Company (TSMC) opened a new $8.6-billion factory on the southern Japanese island of Kyushu.

The Japanese government pledged to pay more than 40 percent of the costs for the facility.

Lured by more Japanese government support, TSMC has announced a second facility, which will make more advanced chips, and is reportedly eyeing a third and possibly a fourth.

Others getting state funds include Japan's Kioxia and Micron of the United States.

TSMC's new facility is also part of a push by the firm to diversify production away from its home base in Taiwan.

China claims the self-ruled island as its own territory and has not ruled out taking it by force.

Lured by public money elsewhere, TSMC is building a second factory in the US state of Arizona and plans another in Germany, its first in Europe.

But despite US President Joe Biden's administration offering subsidies of $52.7 billion for the sector, the Arizona TSMC plant has been delayed and has seen disputes with unions.

The new TSMC plant in Japan took a relatively short 22 months to build, earning praise from the firm's founder Morris Chang, 92, who made a rare trip to open the plant.