(Bloomberg) -- Japan’s support for Rapidus Corp. won’t waver even if the government-backed venture has to delay its goal of mass producing advanced logic chips by 2027, according to the chairman of the ruling party’s group for semiconductors.
Rapidus is on track to start a pilot line of its products in April 2025, moving steadily toward the mass production target, the Liberal Democratic Party’s Daishiro Yamagiwa said, citing feedback he’s received from the company and government officials.
“We’ve carried out our semiconductor strategy with determination and the Rapidus project is a core part of the strategy,” Yamagiwa said in an interview with Bloomberg News on Tuesday. Even if the target changes to 2028 from 2027, “that won’t matter to us,” he said.
Japan is engaged in a multibillion-dollar venture with Rapidus to develop a domestic manufacturer of next-generation semiconductors. The startup, backed by local industry leaders like Toyota Motor Corp. and Sony Group Corp., aims to deliver 2-nanometer chips within three years. It’s an ambitious plan to catch up to leaders Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., both of which intend to start 2nm production at scale next year.
Yamagiwa said he is fully aware of risks associated with the ambitious project, and ongoing concerns over its fate given how past government efforts to help the private sector failed to revive the nation’s once-renowned prowess in chipmaking.
“We will keep trying until we succeed, which is the only way for us to survive,” the 56-year old said. “This is a battle for our nation’s survival.”
The party will aim for a smooth passage of legislation in a parliamentary session next year that will enable the government to boost funding in new ways for chipmakers including Rapidus, Yamagiwa said.
“I’m not expecting opposition for this,” the former economic revitalization minister said, adding that chipmaking technology is crucial for the nation’s security and economy, and renewed government efforts have already helped some regional economies.
The LDP and its junior partner Komeito need support from opposition parties after losing their majority in October’s election. In November, Yamagiwa took over the chip czar post from Akira Amari, a LDP heavyweight who championed Tokyo’s renewed push for chips until he lost his parliamentary seat in the election.
Japan aims to give ¥10 trillion ($65 billion) of fresh public support for its semiconductor and artificial intelligence sectors by fiscal 2030. To start, Prime Minister Shigeru Ishiba has earmarked roughly ¥1.5 trillion in his economic stimulus package last month.
The new funding mechanism will be in addition to funds previously set aside worth roughly ¥4 trillion, including ¥920 billion for Rapidus. Investments from private companies remain small for the venture.
Japan hopes that the fresh public funds would serve as a catalyst to generate public and private investment of more than ¥50 trillion over the next 10 years.
Once Rapidus’ products debut on the pilot line next year, companies may find it easier to see how they are tied to end products such as cars, according to Yamagiwa. That should help the company attract more private investments, and the government won’t cover all the ¥5 trillion that’s expected to be necessary for Rapidus to be fully launched, he said.
“Eventually, we will get to a point where the business will be run without any money from the government,” he said. “That is the goal we are aiming for.”
Until then, the government will continue to make it safer and easier to invest into the chip and AI sectors via subsidies, tax support and loan guarantees, according to Yamagiwa.
Over the past few years, Japan has been under pressure from the US to toe the line with Washington in stepping up restrictions on China’s access to vital components for chips and AI. The super powers compete for global dominance on those technologies, which are critical for both economic growth and military capability.
Rapidus is partnering with US startup Tenstorrent Inc. on the design of advanced AI chips, with the American firm recently raising another $700 million as it tries to break Nvidia Corp.’s stranglehold on the AI business.
Pressure on Japan may now intensify as Donald Trump returns to the White House in January, with his new team including officials known for hawkishness toward China. The two nations are also Japan’s most important trading partners.
Yamagiwa said Tokyo needs to strike a delicate balance between aligning itself with Washington and maintaining business opportunities for Japan Inc. in China.
“We have never done anything to blindly provoke the other side, and I don’t think we ever will,” he said. “But guaranteeing our national security is the first priority. We are doing what we need to do to achieve this, and we will continue to do so after the Trump administration begins.”
--With assistance from Yuki Hagiwara.
(Updates with additional detail on Rapidus’ partner Tenstorrent.)
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