Loans should become the main source of financing for a young company.
Japan’s ruling party spokesman Yoshihiro Seki in an interview Nikkei Asian Review admitted that the desire to save budget funds now prevails over the need to finance Rapidus, which expects to launch production of advanced 2-nm chips in Japan by 2027. The country’s authorities have already allocated about $6.5 billion to support the young company, while shareholders have “spare” a ridiculous $47.5 million. In order to launch production of 2-nm chips by 2027, Rapidus must invest at least $19-25 billion in the enterprise under construction.
Image source: Rapidus
According to the Japanese legislators, the bulk of these costs will be covered by loans, for which the government is ready to act as a guarantor. Rapidus was founded recently and has no experience in commercial activity, so banks are afraid to issue large loans. In order to act as a guarantor for the loans, the government will need to coordinate the relevant measures with the parliament, which is planned to be done during the autumn session. According to Seki, Rapidus must get on its feet as soon as possible and not depend on government subsidies, since the Japanese budget is already short of funds for other needs.
