(Aug 21): Japan’s government is allocating an additional ¥150 billion (US$944 million or RM3.81 billion) for chip startup Rapidus Corp, ramping up spending in a long-shot bid to compete against the likes of Taiwan Semiconductor Manufacturing Co (TSMC).

Japan’s Ministry of Economy, Trade and Industry (Meti) will seek more funds for the domestic contract chipmaker in its fiscal 2027 budget, according to a person familiar with the matter who declined not to be named disclosing private discussions. The person did not elaborate further on Meti’s budget request, which was reported earlier by the Nikkei. A Meti representative could not immediately be reached for comment.

The state-backed venture, founded in 2022, aims to make cutting-edge 2-nanometer chips by 2027, and help Japan lower its reliance on industry leader TSMC. Policymakers see Rapidus’ success and technological independence in artificial intelligence (AI), robotics and quantum computing as critical to the country’s security.

Rapidus, which is also facing off against Samsung Electronics Co and Intel Corp in the foundry business, would also compete against Elon Musk. Musk is partnering with Intel on the so-called Terafab project to make semiconductors for his companies including Tesla Inc, SpaceX, and xAI. 

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