Japan has approved up to ?590 billion ($3.9 billion) in subsidies to chip venture Rapidus, committing more money to its ambition of catching up in semiconductor manufacturing.

The additional funding will help Rapidus buy chipmaking equipment and also develop advanced back-end chipmaking processes, economy minister Ken Saito said.

The amount is on top of billions of yen in public money the 19-month-old startup has already received in its long-shot bid to mass produce chips in Hokkaido and compete with leaders Taiwan Semiconductor Manufacturing Co. and Samsung Electronics.

¡°The next-generation semiconductors Rapidus is working on are the most important technology that will dictate the future of Japanese industry and economic growth,¡± Saito said during a regular news conference Tuesday in Tokyo. ¡°This fiscal year is extremely important for Rapidus.¡±

Japanese chip equipment-makers rose on the news, with Tokyo Electron climbing as much as 3.2% and Disco gaining 2.3% during early morning trade.

The sum is part of around ?4 trillion that Japan has earmarked over the last three years to regain some of its former chipmaking prowess, with Prime Minister Fumio Kishida targeting ?10 trillion in financial support to chipmakers, along with the private sector. Japan has committed billions of dollars to TSMC¡¯s first factory in Kumamoto Prefecture, as well as to Micron Technology¡¯s expansion at its Hiroshima plant to make advanced DRAM.

Rapidus is teaming up with researchers at IBM as well as its own experts in nanotechnology and materials to close the gap with TSMC in cutting-edge fabrication technology. TSMC holds the biggest share of the world¡¯s outsourced advanced chip production, with closest rival Samsung struggling for years to catch up.

Growing geopolitical tensions are spurring governments around the world to broaden domestic capabilities to make semiconductors, which are crucial for running cars, power plants and weapons systems, as well as consumer electronics. The U.S. has also pledged billions of dollars to chipmakers, but delays in licensing and subsidy allocations have held back factory construction plans.

Japan¡¯s three decades of economic stagnation and loss of international competitiveness were caused in part by a lack of understanding about the importance of semiconductors for digitalization, decarbonization and economic security, Saito said.

¡°It¡¯s no exaggeration to say that chips are the foundation for this country¡¯s industries and those of the world,¡± he said.