Emerging Japanese Chip Hub Gives Regional Defense Sector Boost

By Felix Kim

Rapidus Corp.’s semiconductor chip factory in Chitose City, Hokkaido, Japan, is racing toward mass production of key chips by 2027, attracting attention across the Indo-Pacific’s defense industrial base.

“Rapidus is aiming to produce two nanometer semiconductors with shorter turnaround times,” Dr. Sujai Shivakumar, senior fellow and director of Renewing American Innovation at the Center for Strategic and International Studies (CSIS), told FORUM. That philosophy and the company’s production processes, he said, are engineered to cut cycle time.

Technical support comes largely from IBM in the United States, alongside ultraviolet lithography tools from the Netherlands’ ASML Holding N.V. and research and development assistance from Belgium’s imec. South Korean corporation Samsung is also part of a broader consortium of international and domestic firms involved in the effort, Shivakumar said.

Chips like those set for production in Hokkaido increasingly underpin artificial intelligence, autonomous systems, secure communications and sensor technology essential to modern militaries. “If chip supply is disrupted or compromised, military capability is affected almost immediately,” Shivakumar said, explaining why nations favor domestic production or collaboration with trusted partners.

Rapidus’ endeavor addresses a long-standing gap in Japan’s domestic production of leading-edge chips and reduces reliance on Taiwan foundries, Shivakumar added.

Tokyo has backed the project, contributing roughly $15 billion in public funds and drawing more than $1.5 billion in private investment.

Chitose City is advantageous for chipmaking with flat land, proximity to an international airport, abundant water and nearby defense facilities, Hideki Tomoshige, a Renewing American Innovation fellow at CSIS, told FORUM. As Rapidus scales toward manufacturing, the region is building out supporting infrastructure. “This includes securing a large, stable power supply, expanding housing and local infrastructure, and training, attracting, and retaining various workforce,” he said.

Hokkaido’s production facilities are far from Japan’s southwestern islands, which could face greater risk in a potential Taiwan Strait contingency, while the northern island is projected to generate roughly a third of Japan’s wind power by 2040.

Despite the initiative’s attributes it faces constraints, including limited local talent.

Inside Rapidus, leadership has emphasized culture as much as technology. Shigehiro Fujino, senior executive officer and deputy director of the Rapidus Engineering Center, said about 150 engineers dispatched to IBM’s Albany, New York, research facility were guided by three principles: integrity, respect and perseverance. Working as an integrated team they applied those values throughout the collaboration.

Shivakumar said a successful Rapidus project could influence where advanced defense technologies are built. “Rapidus will lead to greater geographical diversification in the design, manufacturing and assembly of advanced semiconductors,” he said, adding that the shift would make the global production ecosystem more distributed and resilient.

• This article was published by Indo-Pacific Defense FORUM