Promoting the chips: Japan's Ministry of Economy, Trade and Industry announced on Tuesday the approval of subsidies amounting to up to 590 billion yen (3.9 billion dollars) for chip foundry venture Rapidus, as part of Tokyo's strategic efforts to boost the nation's semiconductor manufacturing capabilities.

Previously, Japan had committed to providing subsidies totalling around 330 billion yen to Rapidus. The newly sanctioned funding encompasses 53.5 billion yen earmarked for advanced packaging, a crucial element in enhancing chip performance.

Rapidus, spearheaded by seasoned industry professionals, aims to commence mass production of state-of-the-art chips on Hokkaido, the northernmost island of Japan, by 2027. This initiative is being undertaken in collaboration with IBM and the Belgium-based research organization Imec.

Amidst global disruptions such as the COVID-19 pandemic and trade tensions between major economies like the United States and China, nations worldwide are intensifying efforts to fortify their semiconductor supply chains.

However, scepticism looms within the industry regarding Rapidus' potential for success, as Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker, has spent decades refining its processes and holds a dominant position in the market.

(With Reuters inputs)