Eight major Japanese firms have established a new company to produce next-generation semiconductors in Japan by the end of the decade.
Formed by Toyota Motor Corp., NTT Corp., Sony Group Corp., NEC Corp., SoftBank Corp., Denso Corp., KIOXIA Corp. (formerly Toshiba Memory Corp.), and MUFG Bank, the new firm will also be part of efforts to secure Japan's economic security.
The name of the new firm is "Rapidus," which means "rapid" in Latin.
The total investment to set up the new company is likely to be more than 7 billion yen. Investment and participation by other companies will be encouraged.
The new company will develop next-generation semiconductors, which are indispensable to sectors in which it is necessary to instantly process large amounts of data, such as artificial intelligence and smart city development.
The government announced Friday that it will invest about 70 billion yen, mainly to establish a research and development base for the new company. In the second supplementary budget proposal for fiscal 2022, the government has allocated about 1.3 trillion yen to promote and support the domestic semiconductor sector.
Japan and the United States reached an agreement to cooperate in research and development on next-generation semiconductors at a meeting in July of the Japan-U.S. Economic Policy Consultative Committee, which comprises the two countries' foreign and economic ministers and is also known as the economic two-plus-two talks.
The new company will closely cooperate with the research and development base with the participation of other entities, including the University of Tokyo and the National Institute of Advanced Industrial Science and Technology, aiming to mass-produce the technology in Japan.
Currently, Taiwan has an about 90% share of the global market for semiconductors with a circuit line width of under 10 nanometers. (A nanometer is one-billionth of a meter.) In case of an emergency in the Taiwan Strait, there is concern that the procurement of the semiconductors could be delayed. Under such circumstances, it has been a pressing issue for Japan to strengthen its domestic production base.
Although the Japanese government has supported the realignment of the Japanese semiconductor industry, its efforts have not gone smoothly.
Elpida Memory Inc., which was born through a merger of some of the semiconductor operations of Hitachi Ltd. and NEC, went bankrupt in 2012.
Meanwhile, Renesas Electronics Corp., which was formed through a merger of the semiconductor sectors of Hitachi, Mitsubishi Electric Corp. and NEC, has strength in semiconductors for automobiles but has not been able to make its presence felt in the global semiconductor industry.
It is said that the thinner the circuit lines of semiconductor chips are, the higher their processing ability becomes. The new company is considering producing semiconductors with a circuit line width of about 2 nanometers.
Production technology has yet to be established for chips of this standard. Huge amounts of funds will be necessary for Japan to compete with the United States, South Korea and Taiwan.
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