Additional 250 Billion Yen to Be Invested This Year
Only 10% of Shares Have Voting Rights
But Can Be Converted to 60% in a Downturn
Experts: "Need to Clarify Whether the Public or Private Sector Leads"
The Japanese government is set to become the largest shareholder of semiconductor company Rapidus. As it is pushing semiconductor localization as a key policy task, this move appears aimed at securing control over the project.
Nihon Keizai Shimbun (Nikkei) reported on the 27th that Japan’s Ministry of Economy, Trade and Industry plans to invest 100 billion yen (918.5 billion won) in Rapidus through its affiliated incorporated administrative agency, the Information-technology Promotion Agency. Separately, it has also earmarked an additional 150 billion yen (1.3777 trillion won) in this year’s draft budget for further investment. As a result, the total amount the Japanese government will invest in the current fiscal year will reach 250 billion yen (2.2962 trillion won). This exceeds the 160 billion yen (1.4696 trillion won) to be invested by more than 30 private companies. Nikkei analyzed that, to date, the government’s investment will account for 60% of Rapidus’s total capital.
The government has stated that it will cap its voting rights at around 10% in order to maintain a private-sector-led management structure. Through this largest investment, the government will hold (i) common shares with voting rights, (ii) class shares (which do not have voting rights but can exercise them in the event of business deterioration), and (iii) golden shares (which can exercise veto power over resolutions at shareholders’ meetings). Among these, the common shares with voting rights will amount to just over 20 billion yen (183.7 billion won), limited to 10%. The stated intent is to guarantee private-sector-led management.
However, despite these institutional safeguards, concerns are being raised that corporate-led management could still be undermined. If the government converts the class shares into common shares with voting rights, its voting rights ratio could increase to as high as 60%, matching its equity stake. In addition, through the golden shares, it can exercise veto power over key management decisions such as the appointment of the chief executive officer, as well as mergers and alliances. Golden shares are generally introduced in the process of privatizing state-owned enterprises.
Nikkei analyzed that these mechanisms are designed to prepare for a management crisis at Rapidus or attempts by foreign capital to acquire the company, but expert opinions were divided. Takeo Doi, a professor at Keio University, told Nikkei, “There are many cases where joint public-private investment has led to an irresponsible governance structure,” adding, “It is necessary to clearly define whether the private sector or the government holds the leadership.” Minoru Shimamoto, a professor at Hitotsubashi University, said, “Even if the government takes the lead, that does not mean it can control every aspect of corporate management,” and added, “In the end, success or failure will depend on the company’s own decisions.”
Rapidus is a consortium established with the participation of major companies to revive Japan’s semiconductor industry. It aims to begin mass production of 2-nanometer (nm) semiconductors in Chitose City, Hokkaido, in 2028. The Japanese government has designated this as a core economic security project and is providing full-scale support, including directly persuading companies to invest.
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