Japan Ropes In IBM To Beef Up Advanced Semiconductor Presence

Japan Ropes In IBM To Beef Up Advanced Semiconductor Presence
  • International Business Machines Corp IBM will partner with a new semiconductor company backed by Japan's most prominent corporations to develop advanced chips, the Financial Times reports.
  • The agreement is part of a multibillion-dollar effort by Japan to revive its languishing semiconductor industry, reduce its reliance on chip production in Taiwan and boost economic security. 
  • The Japanese government will invest ¥70 billion ($493 million) in Rapidus, joining eight corporate backers, including Toyota Motor Corp TMSony Group Corp SONY, chipmaker Kioxia, telecoms provider NTT, and Softbank Group Corp's SFTBF SFTBY mobile arm. 
  • Also Read: IBM Introduces 433 Qubit 'Osprey' Processor At Its Quantum Summit 2022
  • Rapidus will develop next-generation chip technology with IBM and a Japanese research institute, likely for set up before the end of the year. 
  • The new institute will involve the country's top universities and other publicly funded research groups.
  • The trade ministry separately sought ¥450 billion in its supplementary budget for the current fiscal year to establish manufacturing facilities for advanced chips at home.
  • The ministry doled out subsidies to Taiwan Semiconductor Manufacturing Company Ltd TSM, U.S. chipmaker Micron Technology, Inc MU, Kioxia and its U.S. partner Western Digital Corp WDC to expand their chip production in Japan.
  •  "As the battle for technological supremacy between the US and China intensifies, semiconductors are becoming even more important from an economic security perspective," said Yasutoshi Nishimura, minister of economy, trade, and industry.
  • Tetsuro Higashi, former chair of Tokyo Electron, and Atsuyoshi Koike, former head of Western Digital in Japan, led the talks to create Rapidus. The two men will oversee the management of the new company. 
  • Rapidus will work to get a license from IBM to manufacture sub-2-nm chip technology in Japan once they develop the capability.
  • The report added China's largest chipmaker Semiconductor Manufacturing International warned investors that Washington's tightened U.S. export curbs would have an "adverse impact" on the company's production. 
  • Price Action: IBM shares closed higher by 2.79% at $141.23 on Thursday.
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