A Japanese computer chip maker established with government support is being tasked with developing cutting-edge semiconductor chips.

Despite massive state subsidies planned to finance the venture, there is no reason for optimism about the company’s business prospects.

It is naive to think the government’s policy support and heavy spending will ensure success in this highly competitive and innovation-driven industry. We urge the government to reconsider the project, which is based on skewed thinking about the roles of the public and private sectors in the economy.

Eight leading Japanese companies, including Toyota Motor Corp. and Sony Group Corp., jointly founded Rapidus to develop next-generation logic chips designed to power a wide range of advanced digital technologies. The principal mission of the new company is to achieve domestic production in 2027.

The government pledged to provide 70 billion yen in ($500 million) in subsidies for the undertaking. But trillions of yen in additional government spending are likely to be needed to help Rapidus accomplish its mission. Once it develops a new semiconductor device, the company will require 5 trillion yen to build a plant to manufacture the devices.

In announcing the plan, Yasutoshi Nishimura, minister of economy, trade and industry minister, stressed the growing importance of securing domestic production of these key components of digital and clean energy technologies, citing economic security.

While his argument, generally speaking, is correct, Nishimura failed to make a compelling case for government involvement in such a national project. Many serious questions remain about the purpose and viability of the initiative.

International competition to develop and manufacture state-of-the-art logic chips is fierce. Taiwan Semiconductor Manufacturing Co. (TSMC), the global leader in this field, plans to spend 5 trillion yen this year alone.

As Japanese logic chip technology is 10 to 20 years behind others in the field, Rapidus President Atsuyoshi Koike cautioned it will be impossible to create a truly competitive Japanese rival unless a leading private-sector chip maker tackles the challenge with a make or break mindset.

The eight companies that came together for the undertaking only managed to cough up 7.3 billion yen in total. Seven of them invested 1 billion yen each. This makes it hard to assess which company will take the leadership role and responsibility for the venture. It appears the companies provided money only as a goodwill gesture for government policymakers and Liberal Democratic Party politicians who harbor dreams of making Japan the semiconductor powerhouse it once was.

Many national technology projects led by the industry ministry have fallen by the wayside. The Rapidus project is likely to follow the same fate, seeing as the companies involved have shown no serious commitment.

They likely are less than enthusiastic about the project because they do not see any realistic use of the envisioned device in Japan. The cutting-edge logic chips the new company is expected to develop will be designed mainly for personal computers and smartphones. But large-scale domestic manufacturing facilities for these products no longer exist in Japan.

The industry ministry asserts that the semiconductor devices will be needed for fully self-driving vehicles in the future. But automobiles generally use tested and proven older-generation chips as priority is placed on safety in car manufacturing.

In its supplementary budget for last fiscal year, the government shelled out around 60 billion yen to support the construction of a TSMC plant in Japan. The government also earmarked 1.3 trillion yen for semiconductor-related projects in the second extra budget for the current fiscal year.

With inflation hammering household finances, there is no strong case for massive government spending to support major companies that are racking up windfall profits due to the weaker yen.

Growing social security spending due to the aging of the population is further exacerbating already strained state finances. The government is struggling to secure funds to finance policy measures to support families with young children and promote efforts to reduce the nation’s carbon footprint.

It can ill afford to commit a huge sum of taxpayer money on a technology project with poor prospects for success.

--The Asahi Shimbun, Nov. 17