Honda Motor (TYO:7267) plans to invest in Japan-based chip manufacturer Rapidus in the second half of the fiscal year ending in March 2026, Nikkei Asia reported Tuesday.

The automaker's investment could reach billions of yen, although details are yet to be finalized, the news agency reported.

The move will support Honda's goal of developing in-house semiconductors for self-driving cars, with the Rapidus financing to secure the steady procurement of chips, according to the report.

The investment will enable the automaker to hedge against geopolitical risk from any conflict between Taiwan and China, following its chip procurement deal with TSMC (TPE:2330), the report said.

Shareholders of Rapidus include Toyota Motor (TYO:7203), Nippon Telegraph and Telephone (TYO:9432), Sony Group (TYO:6758), and the Japanese government, Nikkei wrote.

Rapidus aims to begin mass production in 2027 and needs 5 trillion yen as capital, with the country's trade ministry committing 1.72 trillion yen, according to the report.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)