As reported by a local newspaper, Japan's industry ministry is completing a proposal to grant state-backed chip producer Rapidus with an additional 300 billion yen ($2.27 billion) in funding to establish a semiconductor facility on the northern island of Hokkaido.

Rapidus, which chose Chitose, near Sapporo, as the location for a cutting-edge two-nanometer chip manufacturing in February, had already obtained an initial 70 billion yen in government investment.

According to the Hokkaido Shimbun, the additional money would be utilised to assist Rapidus create a prototype line that will start in 2025, citing various anonymous sources.

Rapidus chair Tetsuro Higashi told in February that the company will require around 7 trillion yen in primarily government funds to begin mass-producing sophisticated logic chips in roughly 2027, with assistance from American chip giant IBM Corp.

In addition, the Japanese government is granting up to 476 billion yen in subsidies to a Taiwan Semiconductor Manufacturing Co (TSMC) factory in Kyushu, in which Sony Group Corp and Denso Corp both own a minority ownership.