Rapidus Picks Northern Japan’s Chitose as Semiconductor Plant Location

Japan’s state-backed Rapidus said on Tuesday it would build its semiconductor plant in Chitose, a manufacturing hub on the nation’s northern island of Hokkaido.

The factory and a Taiwan Semiconductor Manufacturing Co (TSMC) plant under construction on the southern island of Kyushu are the key pillars of Japan’s strategy to boost its capability to make more advanced chips and shield itself from supply chain snarls.

Rapidus, which has announced a tie-up with International Business Machines Corp to develop and produce cutting-edge two-nanometre chips, said it plans to launch a prototype line in 2025, with mass production slated for the second half of the 2020s.

“We intend to make an unprecedented semiconductor factory that will catch the world by surprise,” Rapidus President Atsuyoshi Koike told reporters.

Chitose, a city of about 100,000 people, already hosts a wide range of factories run by major manufacturers, including silicon wafer maker SUMCO Corp and auto components maker Denso Corp.

Rapidus expects investments for commercial production and two-nanometre technology development to come to about 5 trillion yen ($36.68 billion), a company spokesperson said.

Rapidus Chairman Tetsuro Higashi told Reuters this month that the company would need about 7 trillion yen of mostly taxpayer money to begin mass producing advanced logic chips around 2027.

Industry Minister Yasutoshi Nishimura, calling Rapidus a “project symbolising U.S.-Japan cooperation”, said the government planned to extend support as the company moves towards actual production.

The Japanese government is offering up to 476 billion yen in subsidies to the TSMC plant in Kyushu, in which Sony Group Corp and Denso each have a minority stake.

($1 = 136.3200 yen)