IBM Japan has opened a new office in Chitose, Hokkaido. The city is home to the plant of Rapidus, which aims to mass-produce next-generation 2nm chips, so IBM has set up a base close to its technology partner. But Rapidus's target of starting mass production in the second half of fiscal 2027 depends on more than technology development and expanded support. It also requires secure funding for massive capital investment. Of the government's planned cumulative equity investment of 650 billion yen, 400 billion yen is contingent on approval in future fiscal investment and loan (FILP) plans.
The most important piece is the additional 150 billion yen equity investment scheduled for fiscal 2027. That equals 37.5% of the unconfirmed 400 billion yen, and about 23% of the planned cumulative government investment of 650 billion yen. Rapidus plans to raise about 400 billion yen in private loans in the same fiscal year, and the Ministry of Economy, Trade and Industry (METI) explains that it must maintain a certain equity ratio to obtain those loans. While IBM's technical support expands, strengthening equity through government investment and securing private loans are key challenges on the road to mass production.
IBM Opens Chitose Site to Support Rapidus's Mass Production Target for Second Half of FY2027
On October 26, 2026, IBM Japan announced the opening of its "Chitose Office" in Chitose, Hokkaido. The aim is to strengthen support for semiconductor-related companies such as Rapidus and to develop new customers in Hokkaido, where the semiconductor industry is clustering. IBM Japan provides Rapidus with 2nm-generation chip manufacturing technology and is working with it on joint development toward mass production. The new office is intended to expand the support structure for semiconductor-related companies, including Rapidus.
The partnership dates back to December 2022. At the time, IBM announced that it would further develop, jointly with Rapidus, the 2nm-generation chip technology it unveiled in 2021, with the aim of introducing it at a manufacturing site in Japan. In its 2021 technology announcement, IBM said its 2nm technology was expected to deliver up to 45% higher performance at the same power consumption, or up to 75% lower power consumption at the same performance, compared with the 7nm generation of the time. These were technical projections at that time and are not performance figures demonstrated in Rapidus's production chips.
To support the technology transfer, Rapidus engineers have been sent to the Albany NanoTech Complex in New York State to work with IBM researchers. According to Rapidus, about 150 engineers have been dispatched there so far. Through this joint research in the United States, the company is working to acquire manufacturing technology and build a mass production system in Japan.
IBM is both a technology partner and a prospective customer of Rapidus. According to materials presented by METI on October 19, 2026, IBM has expressed its intention to use Rapidus for manufacturing and other processes in an ultra-low-power AI chip design project. Rapidus also released a preliminary-evaluation PDK (process design kit) at the end of 2025 and is negotiating with more than 60 prospective customers. A PDK compiles the manufacturing process information and design rules needed for chip design, and customers use it to design chips tailored to the actual manufacturing technology.
In an April 2026 announcement, Rapidus set its target for starting mass production of 2nm-generation chips as "the second half of fiscal 2027." With joint development with IBM, the dispatch of engineers, and the preparation of design environments for customers underway, the opening of the Chitose office can be seen as a step to strengthen domestic support. Even so, if the company cannot secure the funds needed to expand production equipment and ramp up mass production, expanding the business as planned will be difficult. The challenges remaining before mass production extend beyond technology to fundraising.
400 Billion Yen of the 650 Billion Yen in Government Equity Is Not Yet Confirmed
In materials submitted on October 19, 2026 to the FILP subcommittee of the Fiscal System Council, METI laid out a plan to invest an additional 400 billion yen in Rapidus over the three fiscal years 2027–2029. The annual breakdown is 150 billion yen in fiscal 2027, 150 billion yen in fiscal 2028, and 100 billion yen in fiscal 2029. The investment is to be made through the Information-technology Promotion Agency, Japan (IPA), an independent administrative agency.
The government has already invested 100 billion yen in fiscal 2025 and 150 billion yen in fiscal 2026, bringing the total investment made so far to 250 billion yen. If all of the planned 400 billion yen is carried out, cumulative government equity would reach 650 billion yen. However, the additional investment is premised on approval of the FILP request for each fiscal year, so it is not yet confirmed. The unconfirmed 400 billion yen accounts for 61.5% of the planned cumulative total of 650 billion yen.
| Fiscal year | Government equity | Status |
|---|---|---|
| FY2025 | 100 billion yen | Completed |
| FY2026 | 150 billion yen | Completed |
| FY2027 | 150 billion yen | Requested |
| FY2028 | 150 billion yen | Planned |
| FY2029 | 100 billion yen | Planned |
| Total | 650 billion yen | 400 billion yen unconfirmed |
Government equity matters because of Rapidus's plan for raising private loans. The company plans to borrow a total of 2 trillion yen from private financial institutions to fund the expansion of production lines for mass production and other needs. For now, it aims to raise about 400 billion yen during fiscal 2027. METI explains that a certain equity ratio must be maintained to obtain such loans, and government investment plays the role of thickening equity to draw in private capital.
The materials presented by METI compare the equity ratios of manufacturers in general, domestic semiconductor-related manufacturers, and major chipmakers. The average for manufacturing overall is 50.4%, the average for 66 domestically listed semiconductor-related manufacturers is 61.0%, and the average for TSMC, Intel, and Samsung is 65.5%.
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"categories": ["製造業全般（法人企業統計）", "国内上場の半導体関連製造66社", "TSMC・Intel・Samsung（2025年12月期末）"],
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}These are averages for each group of companies and do not indicate Rapidus's own equity ratio. METI explains that because semiconductor foundries require huge upfront investment in production facilities, they tend to be expected to have higher equity ratios than ordinary manufacturers. The government is planning additional investment to strengthen Rapidus's financial base and make it easier to obtain loans from private financial institutions.
That said, the private loans themselves are not finalized either. What private financial institutions submitted in 2025 were letters of intent with no legal binding force, and coordination and negotiations toward executing the loans are still continuing. The government also plans to use debt guarantees, but the use of guarantees must be distinguished from the actual execution of loans.
The funding source for the government investment has also changed. In its fiscal 2027 budget request of August 31, 2026, METI switched the source of the 150 billion yen investment from the previous budget to FILP. The ministry cited the fact that Rapidus's business is nearing the start of mass production, making the likelihood of investment returns relatively higher. In addition, equipment at the Chitose plant acquired under the research and development contract project of NEDO (New Energy and Industrial Technology Development Organization) is planned to be transferred free of charge from NEDO to IPA, which will then contribute it in kind to Rapidus.
Given this funding plan, the opening of IBM's Chitose office signals expanded technical support, but the key financial checkpoint on the way to mass production is whether the 150 billion yen FILP investment for fiscal 2027 is approved. The additional 250 billion yen for fiscal 2028 and 2029 is scheduled for years after Rapidus's targeted start of mass production, so the focus is first on the fiscal 2027 investment and progress on private loans.
Is the 400 Billion Yen Additional Investment a Decisive Condition for Starting Mass Production?
A strong counterargument is that, given the scale of overall government support, there is no need to put so much weight on the 400 billion yen additional investment alone. Approved R&D contract funding for Rapidus totals about 2.354 trillion yen cumulatively for fiscal 2022–2026, and METI is requesting roughly 300 billion yen for fiscal 2027 as well. Compared with these amounts, the 400 billion yen additional investment is relatively small, and the government's policy of continuing to support domestic advanced chip production is clear.
Whether mass production starts as planned is also not determined by funding alone. As The Register has reported, Rapidus is pursuing a strategy of winning customers by manufacturing chips in small lots without setting minimum order quantities. Questions remain over whether it can secure enough customers under this business model and whether it can improve manufacturing yields to the level mass production requires. Even if the government investment is executed as planned, that alone does not guarantee a technical mass production system or business profitability.
Still, there are grounds for treating the fiscal 2027 additional investment as a key checkpoint. METI explicitly cites maintaining the equity ratio needed to obtain private loans as the reason for the additional investment. The roughly 2.354 trillion yen in R&D contract funding supports manufacturing technology development and equipment procurement, and its financial role differs from increasing equity through investment. Large R&D support does not necessarily satisfy the capital structure conditions that private financial institutions require.
However, it has not been confirmed that the 150 billion yen investment in fiscal 2027 is an absolute condition for obtaining the roughly 400 billion yen in private loans. Loan conditions will be decided through negotiations with financial institutions, and it may be possible to secure the necessary equity through other investment or financing methods. What can be said at this point is that government investment is positioned as an important means of drawing in private loans.
Two developments are worth watching to test this view. First, if about 400 billion yen in private loans is executed within fiscal 2027 even without the 150 billion yen government investment being approved, the necessary funds could be raised without the planned investment, which would weaken the view that the investment is an important condition for loan execution. Second, if funding progresses sufficiently but mass production is delayed beyond the second half of fiscal 2027 because of problems such as yields or customer acquisition, technical and business challenges, rather than funding, would be more likely to determine the timing.
The two most important checkpoints going forward are whether the 150 billion yen investment is approved through FILP for fiscal 2027, and whether roughly 400 billion yen in private loans is actually executed within that year. If both happen, then on top of expanded technical support from IBM, the financial base supporting Rapidus's build-out of a mass production system would be further strengthened. However, starting mass production also requires improved manufacturing yields and secured customers, so progress in fundraising and actual mass production preparations will need continued scrutiny.