Japanese semiconductor maker Rapidus says it will build a new factory in Hokkaido Prefecture, in the north of the country, for the mass-production of advanced computer chips.

Rapidus President Koike Atsuyoshi announced the decision at a meeting with the governor of Hokkaido on Tuesday.

Koike said "We aim to produce semiconductors made in Japan that contribute to the world. We decided that Hokkaido is the best place to achieve that."

Hokkaido Governor Suzuki Naomichi said " The effect of the factory construction in terms of investment and employment is expected to be a huge. This will be one of the biggest projects so far for Hokkaido, so we would like to move firmly forward."

The new factory will be built in an industrial park in Chitose City, close to automotive-industry plants and a major airport.

Rapidus says the facility may eventually expand to about 100 hectares. The firm aims to mass-produce 2-nanometer chips by 2027.

Eight Japanese companies, including Toyota Motor, Sony Group and telecom giant NTT announced in November that they had teamed up to establish Rapidus.

Cutting-edge semiconductors with thinner circuits are considered a must for next-generation technologies such as autonomous driving and artificial intelligence.
But no chipmaker in the world has so far been able to commercialize 2-nanometers chips.

Japan lags far behind in the field of advanced semiconductors.

Taiwan's TSMC, South Korea's Samsung and US company Intel are competing fiercely to produce thinner circuits for better performance.

They are leading development of mainstream 5-nanometer to 16-nanometer chips for smartphones and data centers.

Samsung started mass-producing 3-nanometer chips last June. Samsung and TSMC have also announced plans to commercialize 2-nanometer chips by 2025.

Rapidus has already signed a joint-development deal with US IT giant IBM which has expertise in making chip circuits thinner.