Japan said Tuesday it will provide chipmaker Rapidus Corp. an additional subsidy of 260 billion yen ($1.9 billion) for a new factory to be built in Hokkaido, northern Japan, in an effort to boost domestic advanced chip production.

The industry ministry had already announced a subsidy of 70 billion yen to the chipmaker for development purposes, bringing the total amount of government support for Rapidus to 330 billion yen.

"We would like to continue promoting the next-generation chip project in cooperation with relevant parties in the country and abroad," Economy, Trade and Industry Minister Yasutoshi Nishimura said at a press conference.

Rapidus Corp. President Atsuyoshi Koike speaks during a joint press conference with IBM Corp. in Tokyo on Dec. 13, 2022. (Kyodo)

Rapidus was established through an initial 7.3 billion-yen investment by Toyota Motor Corp., Sony Group Corp. and six other major Japanese companies last year.

Kajima Corp. said separately Tuesday that the constructor won an order to build the plant and plans to start construction in September and complete the work in January 2025.

The state-of-the-art, 2-nanometer chips, set to be produced at the new factory near New Chitose Airport are seen as dispensable for next-generation industries, such as autonomous driving and artificial intelligence.

Rapidus plans to set up a trial production line in 2025 and begin mass-producing advanced semiconductors by 2027 in partnership with U.S. tech giant IBM Corp.

The state-backed company selected Hokkaido for the project because of the ample water supply and availability of renewable energy, as the advanced semiconductor microchips need to be rinsed with ultrapure water.

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Japanese chipmaker Rapidus to build advanced chip plant in Hokkaido