Honda Plans Investment in Japanese Chip Maker Rapidus for Automotive Semiconductors

Honda is preparing to invest in the Japanese chip manufacturer Rapidus to secure a domestic supply of semiconductors for its next-generation vehicles. Rapidus, founded in August 2022, is primarily backed by Toyota. This collaboration between two Japanese automotive giants aims to ensure a reliable local chip supply chain while helping Rapidus scale up the production of advanced chip products and expand its customer base. Honda plans to acquire a stake in Rapidus in the second half of the fiscal year ending March 2026, with investment amounts expected to reach several billion yen, although specific details are yet to be finalized. Current investors, including Toyota, NTT, and Sony Group, have already invested a total of 7.3 billion yen (approximately $50.4 million) into the chip manufacturer. Initially, Honda planned to develop autonomous driving chips independently and outsource production. Partnering with Rapidus will help ensure a stable supply of next-generation automotive chips. In 2023, Honda entered into a strategic partnership with TSMC, the world's largest semiconductor foundry, for automotive chip procurement, with large-scale production of 2nm process chips set to begin in the second half of 2025. Rapidus is also working on similar advanced products. By collaborating with this Japanese chip manufacturer, Honda can mitigate supply chain disruptions caused by geopolitical risks. Rapidus has sought additional investment from its current shareholders and banking institutions, with Honda joining the support network that includes the Japanese government. The plan requires Rapidus to achieve a financing target of 5 trillion yen (approximately $330 billion) before mass production in 2027. While the Japanese Ministry of Economy, Trade and Industry has committed to invest 1.72 trillion yen, over 3 trillion yen still needs to be filled. Rapidus focuses on producing advanced semiconductors, aiming to achieve large-scale production of 2nm process chips at its factory in Chitose, Hokkaido, by 2027. The company is concentrating on a new business model called RUMS (Rapid Unified Manufacturing Services) and using GAA (Gate-All-Around) technology for chip production, aiming to deliver the most advanced dedicated chips with the fastest cycle times globally.