Semiconductor chip fabrication in Northern Japan.A new hands-on government approach boosts tech funding.IBM partners with local startup, backed by Sony & Toyota.
The Northernmost island in the Japanese archipelago, Hokkaido, is perhaps best known for its hot springs, cold winters, spider crab delicacies, and ski-ing. But close to Chitose airport near Sapporo, the island’s capital, a new construction site represents what many think epitomises a revitalisation of the Japanese economy.
The Rapidus Corporation is a Japanese startup that is building a new semiconductor fabrication facility in partnership with IBM. The plant will make wafers based on Big Blue’s 2nm designs which were developed in the US.
The timing of the Rapidus project means that the plant should be coming on line when international trade is being negatively affected by poor US-China relations and supply chain issues caused by the continuing conflicts in the Ukraine and Palestine. Prime time to sell much needed chips, therefore.
The supply-chain shortages stemming from the COVID epidemic sharpened focus for policy-makers all over the world, highlighting just how reliant multiple industries are on microprocessors.
Like many countries, Japan is desperate not to have a repeat of the situation when in 2021, large swathes of industry were at an effective standstill due to supply chain issues outside its control.
Japan economically re-imagined
From its heady days in the 1980s when Japan produced around half the world’s silicon wafers, the country’s market share in semiconductor chip fabrication has dropped to just 10%, a victim of a larger national economic decline and the emergence of China and Taiwan as the powerhouses of chip design and manufacture.
But Japan is not trying to recapture the glory days of its technological past by repeating the same type of economic protectionism that was the hallmark of its Asian Tiger phenomenon. Instead, its policy makers have taken the example set by US, Taiwanese, and European chip makers in forming international conglomerates that jointly design, build and distribute silicon microprocessors.
Since 2021, the Japanese trade ministry has embarked on a more hands-on approach [PDF] to boosting specific sectors of the economy, eschewing the libertarian, market-first economics that many have blamed for the country’s stagnation over the last 30 years.
The government’s policies include huge subsidies in areas of industry it wishes to promote, so medical suppliers, semiconductor chip fabrication and technology companies, and renewable energy hardware manufacturers are being offered attractive packages to locate either in Japan or in countries nearby.
The trade ministry says its commitments to revitalisation measures in these sectors will be “large-scale, long-term [and] well-planned.”
Tokyo is using carefully formulated regulatory policies to promote what it terms ‘mission-oriented projects’ such as promoting green technology, renewable energy and high-tech production facilities like that going up on Hokkaido island.
Semiconductor chip fabrication in Hokkaido
As Japan’s northernmost main island, Hokkaido’s abundant fresh water supplies and a mature renewable energy infrastructure make it a good fit for manufacturing technology that will help create a greener technological future.
It’s also the home to several world-class universities, which it’s hoped, will supply the next generation of researchers and engineers needed for Japan to return to its lost, technological powerhouse status.
The IBM 2nm chip design will, according to IBM, increase battery capacities, lower the power requirements for computers (especially important for power data centres and burgeoning demand for AI) and help improve technologies around real-time processing, such as image recognition and autonomous transport.
The Hokkaido plant is expected to employ around 1,000 people by 2027, and is backed by major Japanese companies like Toyota and Sony. Investment from the private sector is bolstered by significant government contributions. The Japanese authorities have pledged around $27bn in investment in technology development and research over the next three years.
AloJapan.com