IBM partners with Japan’s Rapidus to make advanced chips as US recruits allies to its cause in China tech war

IBM Corp and Rapidus, a newly formed chip maker backed by the Japanese government, on Tuesday announced a partnership that aims to manufacture the world’s most advanced chips in Japan by the second half of the decade.

The agreement comes as US-China relations remain tense, especially over chips. Washington has restricted Beijing’s access advanced semiconductor technology and asked its allies, including Japan, to do the same. Japan, which long ago lost its lead on chip manufacturing, particularly advanced semiconductors, is rushing to catch up and ensure its carmakers and information technology companies do not run short of the key component.

“It will take several trillions of yen” to get pilot production up and running, Rapidus president Atsuyoshi Koike said at a news conference in Tokyo. He didn’t say where the money would come from, or where in Japan it would build a foundry.

Last month Japan’s industry and trade ministry said it would invest an initial 70 billion yen (US$500 million) in Rapidus, a venture led by tech firms including Sony Group Corp and NEC Corp. Although that is small in the world of chip manufacturing, where plants can cost tens of billions of dollars, sources say more investments are on the way.

International Business Machines Corp’s director of research, Dario Gil, said the two companies would work together to manufacture IBM’s 2-nanometre-node chips, unveiled last year.