Rapidus, Japan’s government-backed semiconductor developer, is betting on artificial intelligence-enhanced design tools to give it an edge over its competitors, in an effort to speed up its chip-design process and minimize costs.

The firm made the announcement during Semicon, a semiconductor-industry event being held in Tokyo from Wednesday to Friday at the Tokyo Big Sight convention center.

Rapidus’ newly announced suite of offerings, which will be rolled out next year, includes Raads Generator, an AI-assisted design tool modeled on large-scale language models — AI systems trained on datasets — and optimized for 2-nanometer chip manufacturing.

The 2-nm chip is highly advanced in the semiconductor space, touting higher processing speed while reducing power usage. Rapidus is aiming to increase its capacity and compete with rivals such as Taiwan Semiconductor Manufacturing Co. (TSMC), which is ramping up production of such chips.

Rapidus, which already uses AI in some aspects of its business, has estimated that AI integration will enable it to halve the length of design time and cut design costs by 30%.

Takashi Ikuno, an associate professor at Tokyo University of Science, said AI will be “critical” for Japan’s semiconductor industry.

“Japan can’t realistically compete with leading foundries such as TSMC from the viewpoint of scale and accumulated manufacturing experience. AI offers a way to compensate for these disadvantages by accelerating design cycles and reducing development costs,” he said, describing it as bridging design and manufacturing, and leading to greater efficiencies.

Japan was once a world leader in the semiconductor space, and in 2023 the Japanese government began seriously ramping up efforts to revive its previous status, pouring tens of billions of yen into supporting projects.

In November 2025, the Ministry of Economy, Trade and Industry announced it would invest ¥100 billion in Rapidus as part of efforts to enhance Japan’s semiconductor capabilities — and through it, insulate from supply changes and enhance national security.

But in the highly competitive space, a rush to incorporate and apply the latest technology is increasingly underway, and AI is already reshaping the semiconductor industry. Nvidia, Intel and Sony have adopted the use of AI “digital twins” to boost design productivity, and AI is expected to be increasingly incorporated into the design and manufacturing process.

Looking ahead, Ikuno said that being competitive in the semiconductor industry will be less dependent on sheer size, “and more on how well companies can combine data, AI and manufacturing know-how.”

“At the same time, this shift highlights the need to develop human talent, not only in semiconductor engineering but also in AI, particularly people who can bridge both fields,” Ikuno said.