Rapidus Gains ¥802.5B Aid, Faces Three Challenges
Recently, Japan's Ministry of Economy, Trade, and Industry (METI) announced an additional investment of 802.5 billion yen in domestic semiconductor manufacturer Rapidus, bringing the total government support to approximately 1.7 trillion yen. This substantial investment aims to accelerate Rapidus's plan to achieve mass production of 2nm chips in Japan by 2027.
Founded in August 2022, Rapidus is a collaborative venture established by eight major Japanese companies, including Toyota, Sony, NTT, NEC, SoftBank, Denso, Kioxia (a leading NAND Flash manufacturer), and Mitsubishi UFJ. The first seven companies each contributed 1 billion yen, while Mitsubishi UFJ invested 300 million yen. Rapidus's primary goal is to commence mass production of 2nm chips by 2027.
In August 2024, Rapidus announced steady progress in constructing its 2nm wafer fabrication plant, targeting trial production by April 2025. The company plans to develop a fully automated 2nm manufacturing line in northern Japan, utilizing advanced robotics and artificial intelligence (AI). This automation aims to significantly reduce production time, achieving chip delivery times that are only one-third of its competitors. External structure construction of the plant is expected to be completed by October, with the first EUV lithography equipment arriving at New Chitose Airport on December 14, 2024, making Rapidus the first company in Japan to acquire EUV lithography machines.
The establishment of a fully automated manufacturing facility provides Rapidus with a competitive edge. While front-end chip manufacturing processes are already highly automated, back-end processes such as interconnection, packaging, and testing remain labor-intensive across the industry. According to Rapidus CEO Atsuyoshi Koike, this approach will deliver higher performance and faster delivery times compared to competitors producing similar 2nm products.
However, analysts remain skeptical about Rapidus's ambitious target of achieving mass production of 2nm chips by 2027. According to Bloomberg, three primary challenges could hinder Rapidus's progress toward large-scale production.
The first challenge is funding. Following a previously announced subsidy of 920 billion yen, the Japanese government's latest support brings the total financial aid for Rapidus to approximately 1.8 trillion yen. However, this figure is significantly lower than Rapidus's estimated requirement of around 5 trillion yen (approximately 2.46 trillion RMB). In comparison, TSMC's investment in its 2nm plant in Kaohsiung amounts to 1.5 trillion New Taiwan dollars (approximately 3.28 trillion RMB), highlighting the funding gap Rapidus must overcome to build large-scale production lines.
The second challenge concerns technological advancements. To reduce costs and shorten the learning curve, Rapidus intends to complement EUV technology with next-generation nanoimprint lithography instead of traditional optical exposure equipment. Developing robust manufacturing technology without a gradual learning curve remains a critical hurdle for Rapidus.
Finally, the most significant challenge is market demand. Even if Rapidus succeeds in developing viable production technologies, securing client orders remains uncertain. Unlike TSMC, which holds a dominant position in advanced process orders, or Samsung, which supports its own processors alongside orders from other clients, Rapidus lacks both internal and external customer demand. Whether it can attract sufficient orders to transition to mass production is a major concern among industry experts.
