Rapidus, a government-backed joint venture involving Sony, Toyota, IBM and others, is seen as an attempt to put Japan back on the map in the strategic sector.

The company will start construction in the 2027-28 financial year on a second chip plant in the northern island of Hokkaido, Nikkei Asia and the Hokkaido Shimbun daily reported late Tuesday.

The aim is to produce next-generation 1.4-nanometre microchips as soon as 2029, the reports said.

That is a step up from current plans to mass produce 2-nanometre chips -- less technologically advanced but still at the forefront of chip design -- at the first Rapidus plant from 2027.

"Although there have been recent media reports regarding construction and operation of a 1.4nm-node semiconductor factory from Rapidus, these articles are speculation and did not originate from our company," Rapidus told AFP in a statement on Wednesday.

"If we decide on any development that should be made public, we will announce it promptly," it said.

The computing power of chips has increased dramatically as makers cram them with more microscopic electronic components.

That has brought huge technological leaps to everything from smartphones to cars, as well as the advent of artificial intelligence tools like ChatGPT.

Taiwan's TSMC is already developing 1.4-nanometre technology, reportedly to go into mass production around 2028, with South Korea's Samsung and US chipmaker Intel not far behind.

Securing stable supplies of chips has become a business and national security concern for Japan, which dominated the tech hardware industry in the 1980s.