Rapidus is preparing for mass production of next-generation chips

Tokyo (Jiji Press) – Japan’s Rapidus Corp. is stepping up efforts to begin mass production of next-generation semiconductors in 2027.

The Tokyo-based chipmaker was founded in August 2022 by eight Japanese companies with the aim of achieving domestic production of state-of-the-art semiconductors.

Revitalizing Japan’s chip industry, which once led the global market, is crucial to strengthening the country’s economic security as the Japanese government has decided to provide Rapidus with nearly ¥1 trillion in subsidies.

Yet challenges remain in technology and profitability.

“We are close to launching a prototype production line in April 2025,” Rapidus President Atsuyoshi Koike said on April 2 this year, showing confidence in clearing the first hurdle towards mass production.

Also on April 2, the Rapidus government decided to provide up to ¥590 billion in additional aid. The state’s financial support to the company will therefore amount to ¥920 billion.

Rapidus aims to mass produce chips with a circuit line width of 2 nanometers, the most advanced type of semiconductor. Two-nanometer chips, which are expected to increase in demand for use in advanced technologies such as artificial intelligence and autonomous driving, have yet to be mass-produced worldwide. A nanometer is one billionth of a meter.

A chip with a finer circuit linewidth provides better performance. Currently, Japanese chipmakers are capable of producing general-purpose 40-nanometer chips, which at best are used in products such as cars and consumer electronics.

Rapidus plans to spend the additional state subsidies on its factory in the city of Chitose, Hokkaido, northernmost Japan, which is now under construction, and on the introduction of production equipment, as well as on the development of technology for the final processing stage of the chip production.

In many cases, the work in the front process, the bulk of chip production, is separated from the final processing phase. By integrating both processes, Rapidus hopes to shorten delivery lead times, with the aim of overtaking the foreign rivals ahead.

The company also plans to bring another 100 engineers to IBM Corp. within this year. in the United States, which has the technology to manufacture 2 nanometer chips, to advance work on developing the technology needed for the front process.

Rapidus has established a marketing base in California’s Silicon Valley, where a number of information technology companies are located, to develop sales channels.

About 300 Rapidus engineers will move to Chitose by the time the prototype line at the Hokkaido city factory goes into service in April 2025.

Factors such as the rise of foreign semiconductor manufacturers and a 1986 semiconductor agreement between Japan and the US, which was intended to reduce Japan’s share of the global chip market, have led to the Asian country losing a lot of personnel and know-how.

Professor Atsushi Osanai of Waseda University expressed concern about Rapidus’ plans to start producing state-of-the-art 2-nanometer chips.

“It may be difficult (for Rapidus) to achieve a cost advantage unless (the company) surpasses global rivals, such as Taiwan Semiconductor Manufacturing Co., in terms of large-scale production,” Osanai said.

It is expected that Rapidus will need a total of about ¥5 trillion for the mass production of 2-nanometer chips.

The eight investors in Rapidus – Kioxia Corp., Sony Group Corp., SoftBank Corp., Denso Corp., Toyota Motor Corp., NEC Corp., Nippon Telegraph and Telephone Corp. and MUFG Bank – have injected a total of ¥7.3 billion into the company.

But no proposals have been made to make additional investments in the company.

With approximately three years to go before the planned start of mass production, Rapidus faces a host of difficult challenges.