The Japanese government is considering a significant move to acquire shares in the domestic chip company Rapidus Corp. The main purpose of this plan is to lead the way in increasing private sector financial support for the company. According to sources, the government is currently considering exchanging part of its factory assets for Rapidus shares, but the specific timing and scale of the transaction have not yet been determined and will be decided later.

This plan comes against the backdrop of the Japanese government designating the semiconductor industry as a strategically important sector, crucial for economic growth and national security. To support Rapidus, a company aimed at producing cutting-edge 2-nanometer chips, the government has decided to provide subsidies of up to 920 billion yen (approximately $6.2 billion).

However, despite strong government support, Rapidus has received relatively limited investment from the private sector so far. To date, the company has only received a total investment of 7.3 billion yen from eight major Japanese companies, including Toyota Motor, SoftBank, and Nippon Telegraph and Telephone. This figure is insignificant compared to the company’s funding needs.

Established in 2022, Rapidus is a venture company dedicated to producing next-generation chips. It is estimated that the company needs about 5 trillion yen in investment to complete its current factory under construction in Hokkaido and begin mass production of next-generation chips in 2027 with technical support from U.S. tech giant IBM Corp.

Government investment in a venture company like Rapidus, which has no production record, is extremely rare. Such investment may be subject to strict public and expert scrutiny, as taxpayers may have to bear the financial burden if the project fails.

The construction costs of Rapidus’ factory in Hokkaido are currently paid for by government funds. This means that the venture company will eventually need to purchase these state-owned assets from the government. The government’s consideration of exchanging these assets for company shares may be an attempt to balance investment risks and potential returns.

Compared to simply providing subsidies, acquiring stocks would allow the government to participate more in the company’s management decisions. This could help ensure the effective use of public funds and provide more guidance for the company’s strategic development.

Sources also revealed that the government will consider providing additional support to Rapidus in the areas of mass production and research while closely examining the company’s business performance. This indicates that while supporting the company, the government will also maintain a cautious attitude to ensure the effectiveness of the investment and the company’s sustainable development.

Key points:

• The Japanese government is considering acquiring shares in chip company Rapidus to increase private sector support.
• The government has designated the semiconductor industry as a strategically important sector and provided large subsidies to Rapidus.
• Rapidus currently has limited investment from the private sector, which is far from meeting its huge funding needs.
• Direct government investment in venture companies is rare and may face public scrutiny.
• Acquiring shares will allow the government to participate more in corporate management while closely monitoring its business performance.
• This move reflects the Japanese government’s attempt to balance supporting high-tech industry development and controlling investment risks.