Government funding of semiconductor projects always causes debates as microelectronics fabs require tens of billions in upfront investments and do not promise profitability after they come online. Rapidus — which needs some $32 billion for its first 2nm-capable fab — is not an exception as opposition lawmakers to the current government debate over funding source and accountability due to the country allocating money from its COVID funds to the chipmaker, reports Nikkei.
In November, the government announced a seven-year plan worth at least $63.6 billion (¥10 trillion) to boost Japan's semiconductor and AI sectors. Of the ~$8.2 billion (¥1.3 trillion) allocated for the first phase, a portion has been directed to Rapidus. Opposition lawmakers revealed that nearly $6.2 billion (¥987 billion) of the allocation came from unspent pandemic relief funds meant for small and medium-sized businesses. Critics argue that repurposing leftover COVID-19 relief funds to help massive companies lacks transparency, which could lead to wasteful spending.
On the other hand, how else could the strategic project, which aims to bring the production of chips on leading-edge nodes back to Japan, be funded? This is especially true given that the remaining balance in Japan's relief reserves has surged to $114.42 billion (¥18 trillion) as of fiscal 2023, compared to $12.71 billion (¥2 trillion) before the pandemic in 2019. The government has promised to implement periodic third-party evaluations to ensure accountability and efficiency in the Rapidus project.
