The Japanese authorities expect that Rapidus will continue to be supported by banks through loans

Japan’s ambitions in the field of advanced lithography technologies are concentrated in the hands of the young company Rapidus, which by 2027 expects to master contract manufacturing of 2-nm products with technological support from IBM and Imec. With financial support, things are more complicated: the Japanese government does not consider it appropriate to regularly provide subsidies for the activities of Rapidus, trying to put this mission on the shoulders of commercial banks.

Image source: Rapidus

The latter, as has been noted more than once before, are distrustful of a borrower who requires billions of dollars, but does not have any history of production and commercial activity. The Japanese authorities are ready to deviate somewhat from the practice adopted in the country and act as a guarantor for targeted loans. Thus, as representatives of the Japanese parliament explain, the goal of providing financial support to Rapidus without directly dissipating precious budget resources will be achieved. A representative of the ruling party of Japan, Yoshihiro Seki, spoke about this in an interview with Nikkei: “Usually the Japanese government does not act as a guarantor for loans for individual companies, this is an extraordinary case.”

Rapidus, according to some estimates, will need between $19 and $25 billion by 2027 to begin serial production of 2nm chips at its facility under construction on the island of Hokkaido. The bulk of these funds will come in the form of loans from banks, Seki said. The country’s authorities have already provided about $6.5 billion in subsidies to support Rapidus, but they cannot afford to do this annually in the current unfavorable economic situation. The founders of Rapidus, represented by a consortium of Japanese companies, have so far invested about $47.5 million in the company’s capital; these funds are clearly not enough to implement the project. “We want Rapidus to catch the wave and quickly get back on its feet without government support,” the parliamentarian explained the government’s point of view.

In order for the Japanese authorities to be able to vouch for Rapidus on loans, the parliament will have to adopt relevant legislation this fall, since the country’s government takes such steps only in particularly important cases. In particular, when the energy company Tokyo Electric Power, after the disaster at the nuclear power plant in Fukushima, was forced to pay compensation to its victims, the Japanese authorities also vouched for this company to the banks. In the case of Rapidus, parliamentarians will be given the argument that the production of advanced chips by this company can have a beneficial effect on the economic situation in the country, since it will make it possible to replace some of the jobs being eliminated due to demographic problems with artificial intelligence.