Toyota, Sony consortium sets up firm for advanced chip production

TOKYO, Nov. 10 Kyodo - A group of eight leading Japanese firms, including Toyota Motor Corp. and Sony Group Corp., has set up a new company to ramp up the domestic production of next-generation semiconductors, sources familiar with the matter said Thursday. The joint effort by the consortium, which also includes SoftBank Corp. and Nippon Telegraph and Telephone Corp., comes amid intensifying global competition to develop advanced chips to be used in quantum computers and artificial intelligence as well as military weapons such as missiles. The government plans to extend 70 billion yen ($478 million) in subsidies to the new company while the eight firms will invest a total of around 7 billion yen in it, the sources said. The rest of the companies are semiconductor maker Kioxia Corp., auto parts supplier Denso Corp., electronics maker NEC Corp., and MUFG Bank. The move also coincides with a worldwide chip shortage that has hit industries ranging from automaking to appliance production and spurred debate within Japan about economic security as the race has been led by companies in Taiwan, South Korea and the United States. The new company, named Rapidus, will develop and manufacture chips as well as advance the cultivation of human resources in the semiconductor industry, the sources said. Industry minister Yasutoshi Nishimura will announce its establishment on Friday. Rapidus is aiming to develop and produce sub 2-nanometer semiconductors by the late 2020s, said the sources. Currently, Japanese companies can only produce chips with a circuit line width of about 40 nanometers. The project came to light after the industry ministry in July announced a plan to set up a new organization to take charge of a joint research between Japan and the United States on next-generation semiconductors. Rapidus will likely team up with the organization, according to the sources. The establishment of Rapidus was led by Tetsuro Higashi, a former president at chip equipment maker Tokyo Electron Ltd., they said. ==Kyodo