Japan's state-backed chipmaker Rapidus has announced that it has closed a ¥250 billion ($1.6 billion) funding round from the Japanese government and 32 private-sector companies, including Sony, Toyota, SoftBank, Canon, Fujitsu, Denso, Kioxia, and Seiko Epson, as the company works toward 2nm mass production at its IIM-1 foundry in Chitose, Hokkaido, by fiscal year 2027.

Under the arrangement, the government will initially hold roughly 10% of Rapidus's voting shares and the majority of its stake in non-voting stock, but retains the right to convert those shares to seize majority control if the company faces financial distress, Bloomberg reports. The government also acquired "golden shares" granting it veto power over major corporate decisions, Tomoshige Nambu, an official at Japan's Ministry of Economy, Trade and Industry, told reporters.

Japan's economy ministry is also set to nearly quadruple its budgeted support for advanced semiconductors and AI development to approximately ¥1.23 trillion for the fiscal year starting in April. Takaichi's government is not relying on Rapidus alone, having also recently secured a pledge from TSMC to upgrade its technology and plants in Japan.

CEO Atsuyoshi Koike said at a press conference on Thursday, February 26, that Rapidus is in active discussions with more than 60 companies looking to design chips for AI, robotics, and edge computing. "Since the start of the year, customers' demands for cutting-edge chips have surged," Koike said, adding that interest in 2nm specifically had intensified and that the company intends to push on to 1.4nm and 1nm nodes after that.

This latest round of government funding comes on the back of real technical progress. Rapidus opened its pilot line in April 2025 and demonstrated working 2nm gate-all-around (GAA) transistors — an architecture that surrounds the transistor channel on all four sides rather than three, improving current control and reducing leakage compared to FinFET designs — shortly after, in July. The company uses High-NA EUV lithography equipment from ASML at the Hokkaido facility, and IBM is understood to have roughly 10 engineers stationed on-site as part of an ongoing technology transfer partnership.

As we reported earlier this month, Rapidus plans to start mass production at an initial rate of 6,000 12-inch wafers per month, scaling to approximately 25,000 within the first year. Total investment needed to reach that point is estimated at around ¥4 trillion; roughly ¥1.7 trillion has been committed from all sources to date.

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Luke James is a freelance writer and journalist.  Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory.