Photo/Illutration Electronic circuits on a semiconductor as seen through a microscope (Asahi Shimbun file photo)

The central government and eight major Japanese companies are joining forces to bankroll a new company expected to become the domestic production source for next-generation semiconductors.

The eight firms—Toyota Motor Corp., Sony Group Corp., NTT Corp., NEC Corp., Softbank Corp., Denso Corp., Kioxia Holdings Corp. and MUFG Bank Ltd.—will provide capital for Rapidus, a new company set up specifically to serve as a future domestic base for producing advanced chips.

Yasutoshi Nishimura, the economy minister, announced on Nov. 11 that the government will subsidize Rapidus to the tune of 70 billion yen ($493 million).

“I hope this endeavor to bring Japan’s academia together with the business sector will strengthen the competitiveness of Japan’s semiconductor sector,” Nishimura said at the news conference to announce the plan.

The company will seek to mass produce next-generation semiconductors for a wide range of uses, such as quantum computing, autonomous driving technology and artificial intelligence.

The incoming brass at the new firm will bring with them expertise from top-level management across Japan’s chip industry.

The president is Atsuyoshi Koike, who headed the Japanese arm of Western Digital Corp., a U.S.-based semiconductor manufacturer. Another top executive is Tetsuro Higashi, the former president of Tokyo Electron Ltd., a major semiconductor-production equipment manufacturing company.

Semiconductors have recently become a much more important component of national economic security.

Overseas chip plants were slammed by production stoppages brought about by the novel coronavirus pandemic. Supply soon dried up for semiconductors used in a wide range of products, from automobiles to smartphones, dealing blows to many parts of the economy.

That quickly spurred moves to strengthen domestic production and develop next-generation semiconductors in Japan.

The government has made a spate of moves to respond to this, including shoveling money into domestic projects to secure supply.

The economy ministry in June decided to provide subsidies of up to 476 billion yen to a plant in Kumamoto Prefecture being constructed by Taiwan Semiconductor Manufacturing Co. (TSMC) and Sony Group.

The ministry also announced plans to support the construction of semiconductor plants in Japan that will be run by Kioxia and U.S. company Micron Technology.

The Economy, Trade and Industry Ministry also announced on Nov. 11 the name of a new entity that will lead a joint research and development project with the United States.

It will be called the Leading-edge Semiconductor Technology Center (LSTC).

The center will be formally established before the end of the year.

Japan has lagged behind the United States, Taiwan and South Korea in production of advanced chips.

But in July, the foreign and economic ministers from Japan and the United States met and agreed to strengthen cooperation in semiconductors. They decided to establish the LSTC following that.

That project will involve the National Institute of Advanced Industrial Science and Technology, Riken, the University of Tokyo, Tohoku University as well as IBM Corp. and other American entities.

That center aims to commercialize its advanced semiconductors in the latter part of the decade.

(This article was written by Shimpei Doi and Takumi Wakai.)

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