Rapidus Produces Japan's First 2nm Transistor

Japan's national semiconductor venture Rapidus has announced a significant breakthrough in its ambitious $34 billion plan to restore the country's advanced chip manufacturing capabilities. On July 18, the company revealed it has successfully produced Japan's first-ever 2nm transistor, marking a key step toward next-generation chip production.

Although details on product quality and customer acquisition remain limited, Rapidus CEO Atsuyoshi Koike hailed this achievement as a "milestone moment." He acknowledged the team's relentless efforts, working "day and night" to realize a functional transistor structure. The prototype was fabricated using cutting-edge extreme ultraviolet (EUV) lithography machines exclusively supplied by ASML of the Netherlands.

While Koike refrained from disclosing performance metrics, he emphasized continued efforts to improve efficiency, yield rates, and scalability to achieve mass production. Currently, the company aims to reduce defect rates from 50% to a target range of 10-20%.

Trial production of the 2nm semiconductors began in April 2025, with full-scale mass production anticipated by 2027. If successful, these would be the most advanced chips ever produced in Japan.

The Japanese government is backing Rapidus with up to ¥1.7 trillion (approximately $11 billion) in subsidies, exceeding the ¥1.2 trillion support granted to TSMC's two plants under construction in Kumamoto. Legislation passed in April also enables the government to invest directly in Rapidus and guarantee bank loans, an uncommon move in Japan's industrial policy.

To mitigate taxpayer concerns over the projected ¥5 trillion ($34 billion) total cost, the government is courting private lenders and has implemented a "golden share" structure to prevent foreign takeovers of Rapidus. The company aims to secure an additional ¥200 billion in funding this year from both government agencies and private investors, though its high-risk profile has led to cautious engagement from some firms.

Rapidus faces the challenge of establishing global competitiveness during a period of significant technological transition. Its strategy involves leveraging IBM's expertise, especially in gate-all-around (GAA) transistor designs—an architecture shift critical for the latest chip generations.

Additionally, Rapidus is redefining its business model to cater to niche demands, offering faster factory response times and low-volume, specialized chip production. Unlike traditional industry models that separate design, manufacturing, and packaging, Rapidus aspires to provide an integrated, end-to-end solution. This could significantly streamline production timelines by minimizing coordination with external partners.

Further strengthening its ecosystem, Rapidus collaborates with Belgian research hub Imec and has established a sales office in Silicon Valley to engage with major U.S. tech firms.