Rapidus will be TSMC’s strongest rival in the near future

Rapidus

Company Profile

Founding of the company

Rapidus was founded in August 2022 by former Tokyo Electronics President Tetsuro Higashi, and former Nippon Manufacturing Co., Ltd. engineer Atsuyoshi Koike serves as the company’s CEO.

Aiming to revive Japanese semiconductors

Rapidus is a chip foundry supported by the Japanese government. It has been given only one mission–to revitalize Japan’s semiconductor industry, which was once the world’s number one but was strangled by the United States. If you are interested in this history, please see the following two posts I have written before:

High subsidies from the Japanese government

As of April 2024, Rapidus has received a government subsidy of 1 trillion yen (approximately US$620 billion).

Raised funds from 8 Japanese companies

Rapidus is basically a chip innovation that gathers the strength of the whole country and is a joint effort between industry, government, and academia. It only allows success and does not allow failure. It must be successful.

Eight leading Japanese companies, including Toyota, Sony, NTT, NEC, Softbank, Denso, NAND Flash manufacturer Kioxia, and Mitsubishi UFJ, all invested heavily in participating in the establishment of the company. Fund raising, 8 Japanese companies jointly invested 7.3 billion Japanese Yen.

Note: Recent media reports have revealed that Fujitsu may also be the ninth major Japanese company to invest.

Rapidus is no ordinary company

Why is Rapidus necessary?

Currently, the semiconductor factories of local Japanese manufacturers can only produce products up to 40 nanometers, which is far behind the United States, Taiwan, China, and South Korea.

The company’s only mission

To make a long story short: Although the company is currently very low-key, relevant industry insiders all know one thing – Rapidus was founded with the sole purpose of defeating TSMC.

US and Japan join forces to suppress TSMC

Taiwan’s media will only report good news but not bad news, and will not tolerate any unfavorable or negative comments about TSMC. Most of the Taiwanese are obsessed with TSMC’s current leading wafer foundry dominance, claiming that TSMC will always be invincible. In addition, TSMC is currently the only globally competitive company in Taiwan; few Taiwanese media will mention the following two things:

  • The US chip bill is aimed at breaking TSMC’s monopoly.
  • The United States has stepped up its efforts to support Japan’s semiconductor industry, which is obedient and under its control, to curb TSMC’s monopoly.

Set TSMC as the main competitor

TSMC’s chip factory in Kumamoto is positioned by Japan as a chip manufacturer with less advanced manufacturing processes. TSMC’s three wafer factories in Japan that have been completed, are under construction, or are planned are all using relatively mature manufacturing processes. Very advanced high-end manufacturing process.

For detailed tasks and process technologies of TSMC’s wafer fabs and high-end packaging and testing plants around the world, please refer to my previous post “How many fabs and houses does TSMC have currently and in the future?

Please note: The official company name of TSMC’s factories in Japan is Japan Advanced Semiconductor Manufacturing, or JASM for short. There is no word TSMC in the name at all, and there is no connection with TSMC.

Technical aspects

European and American full support

Rapidus is a chip manufacturer supported by the Japanese government and is supported by IMEC in Belgium and IBM in the United States.

Only locks in advanced processes above 2nm

The company’s initial goal is to manufacture 2-nanometer wafers. Rapidus is not interested in processes below 2 nanometers or mature processes at all, and it is completely outside the company’s planned operating scope.

Use foreign technology

2nm depends on IBM

Just like TSMC before, because it was starting from scratch, Rapidus adopted a more reasonable and faster market entry method, that is, finding a technology provider with high-end process technology. This company is IBM.

Rapidus has long announced that it has entered into a strategic partnership with IBM to jointly develop next-generation semiconductor 2nm chips. The two parties will work together to promote IBM’s breakthrough 2nm research and development and import Rapidus for production in Japan. In fact, Rapidus has sent 100 engineers to IBM to learn the technology of producing gate-all-around (GAA) transistors on 2-nanometer wafers.

1.4nm

Rapidus plans to build a fab in Hokkaido by 2027 that will use 2nm-level process technology and advanced packaging. The second phase of the factory will be commissioned after 2027 and will be able to produce 1.4nm-scale wafers.

1 nanometer relies on Leti

In addition to cooperating with IBM on the 2nm process, Rapidus and the University of Tokyo will work together with the French semiconductor research institute Leti to develop 1nm wafer technology.

Schedule and milestone

Two years behind TSMC only

Rapidus CEO Junyi Koike said that with the support of partners, Rapidus initially set the world’s most advanced commercial wafer foundry production to be only two years (this number is extremely important, please see the following content of this article) behind TSMC, and will further shorten the time gap in the future, to gain a competitive advantage over TSMC and Samsung.

Trial production schedule

The trial production of Rapidus’s 2nm process factory will be launched in April 2025, and the first factory “IIM-1” in Chitose City, Hokkaido has started construction in September 2023. The company is currently carrying out various plant construction and equipment installation and testing work in full swing.

Trial production of 2nm chips will begin in April 2025, and shipments to Broadcom will begin as early as June 2025. The company’s trial production time is basically the same as TSMC’s.

Mass production schedule

Rapidus stated that it will mass produce 2nm chips in 2027. Please note that TSMC’s 2nm process mass production schedule is 2025.

Next Step

Rapidus has announced that after 2nm, it is set to develop 1.4nm process in 2028. Please note that TSMC’s mass production schedule for 1.4nm process is 2027.

Partners, customers and competitors

Partners

In addition to the company’s technology providers IMEC of Belgium, ASML of the Netherlands, IBM of the United States, and Leti of France, Rapidus also cooperates with the “Advanced R&D Technology Center” (LSTC) composed of research institutions such as the University of Tokyo.

Junyi Koike said that “the preparation of an EUV lithography equipment has been completed and will be introduced before trial production in 2025” and is evaluating the preparation of another EUV, hoping to “eventually have multiple EUVs.”

Customers

In July 2023, Rapidus CEO Junyi Koike said in an exclusive interview, “We are looking for partners in the United States and have begun negotiations for chip supply with some companies in the American technology giant GAFAM.”

The company has also opened a sales office in the United States in 2023 to expand its customers. Rapidus’ current customers are mainly venture capital companies or start-ups engaged in the AI ​​industry.

However, this situation has changed since Rapidus installed Japan’s first EUV exposure machine for 2nm wafer production in December 2024 and is expected to start trial production in April 2025. The attitude of large semiconductor customers has changed from previous suspicion to they have shifted to actively approaching Rapidus in the hope of diversifying its chip foundry suppliers. Rapidus President Junyoshi Oike revealed that they are currently in talks with 40 customers and expect to announce relevant information later in 2025.

Tenstorrent

In February 2024, Rapidus even announced its cooperation with Tenstorrent, a new startup that has assisted Apple, Tesla and other companies in chip design. Tenstorrent is responsible for the development of artificial intelligence chips, and Rapidus is responsible for production, Tenstorrent will become Rapidus’s first 2nm customer.

Broadcom

In January 2025, the media revealed that Rapidus planned to cooperate with Broadcom and share its 2nm process chip prototype with the latter as early as June 2025, and is expected to supply chips to Broadcom’s customers.

After testing the performance of the chip prototype, Broadcom is expected to outsource the production of the semiconductors to Rapidus, the sources said. Rapidus plans to start trial production of 2nm chips in April 2025 and start shipping them to Broadcom as early as June 2025.

Broadcom will be Rapidus’ first big customer if everything on schedule and go smoothly.

Kioxia

Kioxia, a Japanese NAND Flash manufacturer, will start production at its new plant in the fall of 2025 and will mass-produce the most advanced “BiCS8” products. In November 2024, Kioxia said it would consider cooperating with Japanese government and private enterprises. Cooperate with Rapidus, a wafer foundry established in China.

Nvidia

On November 13, 2024, Nvidia CEO Jensen Huang hinted that the company might consider outsourcing the production of AI chips to Rapidus in the future. He emphasized the importance of supply chain diversification and expressed confidence in Rapidus’ capabilities.

AMD

If you have a good memory, you should remember that AMD CEO Lisa Su also made the same hint like Nvidia CEO Jensen Huang when she visited Japan not long ago.

ASIC chip designers

If Rapidus passes the 2nm performance verification, Broadcom will place an order for Rapidus to produce chips. Broadcom’s customers include technology giants such as Google and Meta. Through cooperation with Broadcom, Rapidus will also indirectly supply these technology leaders. And technology leaders will influence the ASIC designers who design chips for them. Therefore, it is not surprising that Rapidus has planned to cooperate with IC design houses such as Taiwan’s Alchip.

RAPIDUS’s shareholders

Don’t forget that Toyota, Sony, NTT, NEC, Softbank, Denso, and Kioxia are all major shareholders of Rapidus. Each of them is a major customer of chip foundry. Once their own factories can produce, there is no reason not to use Rapidus. The chip foundry produces the factory.

Competitors

As we all know, the leading competitors in Rapidus’ field include TSMC, Intel, and Samsung Electronics; don’t forget SMIC.

The future of the company

IPO

Rapidus said that after mass production of chips begins in 2027, the company will consider seeking investment from private companies. “Including an initial public offering (IPO), we are considering various financing methods, but the premise is to ensure that any investor can It cannot interfere with Rapidus’ ultimate goal of stably producing next-generation chips.”

Revenue Outlook

Rapidus stated that Rapidus’ revenue is expected to reach 1 trillion yen in the 2030s (2030~2039).

Potential risks

However, Global Foundries (US stock code: GFS) ever sued IBM for illegally sharing intellectual property rights and corporate secrets with Rapidus and other companies, which has brought new variables to Rapidus’s ability to successfully complete mass production.

Part of US and Japan’s semiconductor strategy

US and Japan conspired to hollow out Taiwan

Anyone with a little bit of common sense can easily see that Japan is willing to spend a lot of money to subsidize the wafer production plants set up by Taiwan’s TSMC in Japan. To put it bluntly, Japan and the United States are “conspiring to use Taiwan to hollow out” and use Taiwan to The current wafer manufacturing technology “temporarily fills the gap” in Japan’s semiconductor process skills between 40 nanometers and 4 nanometers, which are currently not available in Japan.

One of the three factories of JASM is below two nanometers (see my other post “How many fabs and houses does TSMC have currently and in the future?” for details)? No, because by then the Japanese will have their own Rapidus and will not need TSMC at all. It is hard to say who will win by then.

Taiwan is just a piece

Taiwan is just a piece on checkerboard being used (or is it more appropriate that Taiwanese use the term “disposable chopsticks” more often), right or not? No need to rush into an argument here. By the time you read this article, the United States has achieved its goal. Through TSMC’s US factory, it will be able to produce 4-nanometer chips this year.

Note: According to a report by the Semiconductor Industry Association (SIA), the United States’ share of global chip manufacturing capacity has dropped sharply from 37% in 1990 to 10% in 2022. The United States’ chip manufacturing capacity is expected to triple by 2032.

As for Japan, the Japanese have already achieved their first goal: take advantage of TSMC to produce 40-nanometer to 4-nanometer chips for them in Japan. What about advance process than 4nm? The Japanese don’t need TSMC anymore because Rapidus will be available in two years.

Closing words

TSMC “currently” has a strong monopoly and strength in chip manufacturing. But as the title of this article says: Rapidus will be the most powerful opponent TSMC will face soon. Why? because:

  • The US Chips Act has been aimed at breaking TSMC’s monopoly from the very beginning, but Taiwan has been whitewashing the situation and burying its head in the ground like an ostrich, deliberately turning a blind eye to the US’s support for Japan to break Taiwan’s monoply on semiconductor manufacturing. On the other hand, most ignorant Taiwanese are blindly glad that the United States has imposed an embargo on SMIC, helping TSMC to suppress this terrible opponent and allowing Taiwan to rest easy. However, Taiwanese do not know that the immediate opponent is Taiwan’s self-wishful thinking Japan, which most Taiwanese believe that it is friendly to Taiwan.
  • Rapidus’ funding comes from the Japanese government and major Japanese related companies, and with support from all over Japan, it is only allowed to succeed and not fail. Don’t forget, the Japanese owned one of the world’s most powerful semiconductor industries 40 years ago. The Japanese have proven to the world their capabilities in the semiconductor industry. They did not create something from scratch. At that time, Japan’s semiconductor products, equipment, materials, memory, logic chips, and manufacturing were all leading the world, even the United States was defeated. Currently, Taiwan is only leading in the field of chip manufacturing.
  • The current problem in the Japanese semiconductor industry is manufacturing. Don’t forget that Japan has a strong leading position in the world in terms of semiconductor raw materials (50% global market share) and equipment (30% global market share) .
  • Unlike SMIC, which is banned by the United States, Rapidus has everything that TSMC can buy, and many of TSMC’s equipment comes from Japan (Surprised? some TSMC’s cutting-edge equipment also comes from mainland China’s vendors); Rapidus already has EUV machines, it is a foundry that can immediately produce 2 nanometers chip.
  • The last and most important point is that the backing behind Rapidus is the United States. Rapidus implements the will of the United States (to break TSMC’s monopoly). Taiwan and TSMC cannot compete with the United States. If you doubt my words, you might be a creature have just immigrated from other planets.

Remember: “Taiwan took our chip business from us,” the returnee US presidential contender told Bloomberg Businessweek in an interview.

Rapidus
credit: Wiki

I am the author of the original text, the essence of this article was originally published in Smart Magzine, issue of September 2024

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