Japanese Government Provides Guarantee for Semiconductor Company Rapidus' Fundraising

The Japanese government has decided to provide government guarantees for loans from banks and other financial institutions to secure funding for its emerging semiconductor company, Rapidus.

According to the Nihon Keizai Shimbun (Nikkei) on the 30th, the Ministry of Economy, Trade and Industry of Japan will hold a meeting on the 31st to discuss establishing legal grounds for providing government guarantees to Rapidus. Rapidus is a semiconductor company established in November 2022 under the leadership of the Japanese government.

The Japanese government has pledged a total of 920 billion yen (approximately 8.1 trillion KRW) to Rapidus, but as it is expected that 5 trillion yen (approximately 44 trillion KRW) will be needed to produce cutting-edge 2-nanometer (nm) products by 2027 according to the business plan, this measure was prepared.

Eight major companies, including Toyota, Kioxia, Sony, NTT, SoftBank, NEC, Denso, and Mitsubishi UFJ Bank, have participated in investing in Rapidus. However, the total investment amounts to only 7.3 billion yen (approximately 640 billion KRW).

To begin mass production of products in 2027, large-scale funding is required, including ordering manufacturing equipment by 2025.

If government guarantees are provided, it could lead to loans from banks that have so far refrained from lending to Rapidus due to business risks.

Nikkei stated, "Providing government guarantees to individual companies is unprecedented," and added, "Opposition voices regarding the establishment of legal grounds are also expected."

Rapidus is currently building a factory in Chitose, Hokkaido.

Meanwhile, Samsung Electronics and Taiwan's TSMC are targeting 2025 for the mass production of 2-nanometer semiconductors.