(Bloomberg) -- Japan’s trade minister pledged the government will hike its financial support for chipmaker Rapidus Corp. as it works to develop cutting-edge semiconductors, arguing domestic production of such components is essential for the country to excel in artificial intelligence and autonomous driving.
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“I have high hopes that Rapidus can mass produce 2-nanometer chips and beyond in Japan, and the government is ready to continue and beef up financial support to the company as it will need to spend trillions of yen to make that happen,” Yasutoshi Nishimura, minister of economy, trade and industry, said in an interview.
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Tetsuro Higashi, former chairman of Tokyo Electron Ltd., and Atsuyoshi Koike, former president of Western Digital Corp., established Tokyo-based Rapidus last year with the goal of making the cutting-edge, two-nanometer chips in Japan by 2025. The duo drew investment from companies including Toyota Motor Corp., Sony Group Corp. and Nippon Telegraph & Telephone Corp.
The project is seen as a quasi-public sector effort, with Rapidus becoming a potential national champion as the country tries to develop a strong local chip sector. The government contributed ¥70 billion ($530 million) in financial aid for its launch.
Japan’s efforts come as countries around the world are seeking to build their own semiconductor capabilities, a strategic priority after the Covid pandemic shut down global commerce and as the US-China conflict threatens the old standards of free trade. The US, China, South Korea and Europe are all pouring billions into the sector to secure supplies.
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Japan was once a semiconductor superpower with a dominant share of the memory chip market, but it ceded that position in part because of its own clash with the US over what constituted fair industrial policy. Former trade minister Akira Amari told Bloomberg in January that Japan lost its edge because individual companies made development choices independently and the government failed to work well with the US administration of the time.
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