Billion-Dollar Subsidies in Japan For Chips and Packaging: Rapidus Receives Further Support from Japan

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In an effort to once again compete at the forefront of semiconductor manufacturing, the Japanese government is heavily investing in its domestic industry. In early April 2024, the Ministry of Commerce announced that it intends to provide billions more euros in support to semiconductor manufacturer Rapidus.

In the 1980s, Japan was at the forefront of semiconductor manufacturing, with almost 50 percent of the global market dominated by Japanese products. However, the semiconductor agreement between Japan and the USA, which was concluded in 1986 to settle trade disputes, and the rise of the South Korean and Taiwanese industry gradually diminished competitiveness.

Japanese companies and the government have now recognized, and not just since the impacts of the Covid-19 pandemic on production, supply chains and delivery reliability, that dependence on foreign manufacturers greatly influences domestic production. And that the worldwide popularity of artificial intelligence and the growing demand for semiconductor products and technologies can be capitalized on.

In 2022, the semiconductor manufacturer Rapidus was founded by the eight renowned corporations Denso, Kioxia, MUFG Bank, NEC, NTT, SoftBank, Sony, and Toyota. This company has already received several subsidies from the government in the past, and was pleased to receive another grant in early April 2024. Among other things, methods and technologies for Advanced Packaging are to be researched.

Rapidus in rapid start mode

On April 2, 2024, Rapidus announced that the New Energy and Industrial Technology Development Organization (NEDO), the largest public administrative organization for promoting research and development in Japan, has released its plan and budget for fiscal year 2024. Specifically, for the research and development of 2nm generation semiconductor integration technology and short TAT manufacturing technology based on Japanese-American cooperation. Rapidus will be provided with around 3.5 billion euros; a sixth of this will be put into the R&D of Advanced Packaging, reports Reuters.

In 2023, Rapidus launched the IIM (Innovative Integration for Manufacturing) project to establish a production base in Chitose City, Hokkaido, and develop mass production technology for 2nm generation logic semiconductors with support from IBM. For the current fiscal year, Rapidus has now received approval for the construction of a clean room and plans to introduce EUV lithography machines and other manufacturing facilities in order to operate Rapidus's pilot line from April 2025. Mass production is expected to start in 2027.

Advanced Packaging for Japan

Not only does Japan want to play a role again in its own and the global market with its domestic semiconductor production and to set up many companies with advanced technologies, but it also wants to attack leading foreign semiconductor manufacturers, as the authors of NZZ analyze. This is also emphasized by Rapidus' plans to invest the new funding money in research and development in the area of backend packaging.

High-performance applications such as AI and machine learning require modern technologies from the chips used, such as stacking semiconductor layers or combining memory and computing chips to provide performance and energy efficiency.

"Rapidus will establish itself as a domestic foundry with short production time in order to secure the domestic supply of advanced logic semiconductors, which are key to economic security, and to contribute to improving Japan's industrial competitiveness and enhancing national living comfort," the company announces. By the way, a recent rumor about TSMC subsidiary JASM suggested that not only Rapidus could be interested in Advanced Packaging in its own country. According to this, it is looking for a third JASM location in Japan, for development and research on Advanced Packaging. (sb)