October 15, 2024 – According to a report by Kyodo News on the 10th of this month, the Japanese government is planning to directly acquire shares in the advanced chip manufacturer Rapidus through in-kind contributions. This move aims to strengthen its participation and supervision of the company’s operations while clarifying its support for Rapidus, thereby attracting private sector investment and loans.
Currently, Rapidus has only received 7.3 billion yen in funding from private enterprises, while the majority of the investment for the construction of its IIM advanced wafer fabrication plant comes from a 920 billion yen commissioned investment provided by the Japanese government agency NEDO. This is not a simple “subsidy” as commonly understood.
This also implies that the IIM wafer fabrication plant belongs to Japan’s national assets. Under the current model, if Rapidus plans to use the wafer fabrication plant for commercial mass production, it will ultimately need to pay the Japanese government to purchase it.
The Japanese government intends to adjust its support approach for Rapidus, a critical enterprise for revitalizing Japan’s semiconductor industry. It plans to directly invest in kind, such as providing real estate, securities, and equipment, to become a shareholder of Rapidus. The specific timing and amount of the investment will be negotiated between Japan’s Ministry of Economy, Trade, and Industry and the Ministry of Finance.
Once this measure is implemented, the Japanese government will have a greater say in the daily operations of Rapidus, enabling it to better grasp the company’s research and development as well as mass production progress. This will facilitate more effective promotion of business improvements and provide additional support at the appropriate time.
Although the Japanese government has previously invested in private enterprises for public interests, it is quite rare for it to hold shares in a company like Rapidus, which currently has no performance record. Additionally, Rapidus still faces a huge funding gap of approximately 4 trillion yen before it can achieve commercial mass production.
