IBM will cooperate with Japan's Rapidus to develop 2nm chips

According to media reports, "Big Blue" IBM will cooperate with Rapidus, a new semiconductor company backed by Japan's largest company, to develop advanced chips.

The deal is part of Japan's multibillion-dollar effort to revive its flagging semiconductor industry, reduce its reliance on Taiwan's chip production and promote economic security.

The Japanese government will invest 70 billion yen ($493 million) in Rapidus, joining eight corporate backers including Toyota, Sony, chipmaker Kioxia, NTT and SoftBank's mobile unit, among others.

Rapidus will develop next-generation chip technology with IBM and a Japanese research institute and be established by the end of the year. The new institute will involve the country's top universities and other publicly funded research groups.

Japan's Ministry of Economy, Trade and Industry has provided subsidies to TSMC, U.S. chipmakers Micron, Kioxia and its U.S. partner Western Digital to expand their chip production in Japan.

"As the battle for technological supremacy between the U.S. and China intensifies, semiconductors have become more important from an economic security perspective," Minister of Economy, Trade and Industry Yasunori Nishimura said at a news conference on Friday. "We hope to strengthen the foundation and competitiveness of Japan's semiconductor-related industries by collaborating with research institutions and industries in the United States and other countries," he added.

Negotiations to create Rapidus were led by former Tokyo Electronics chairman Tetsuro Toshiro and former Western Digital Japan head Junyoshi Koike. The two will lead the management of the new company.

IBM has led research and development in advanced chip technology and last year unveiled the world's first prototype of a 2-nanometer chip that could be used in 5G, quantum computing and data centers. IBM did not respond to a request for comment.