Tech

Rapidus, State-Backed Semiconductor Firm That Japan Is Counting On To Regain Lost Chipmaking Glory, To Build 2-nm Fab In Hokkaido

Swarajya Staff

Mar 01, 2023, 03:25 PM | Updated 03:38 PM IST


Rapidus, State-Backed Semiconductor Firm
Rapidus, State-Backed Semiconductor Firm
  • Rapidus was formed by semiconductor veterans with $510 million in subsidies from the Japanese government along with contributions from Toyota, Sony, Kioxia, NEC, NTT, Softbank and Denso with each company putting in $6.8 million.
  • Rapidus will spend $37 billion, including research and development, to launch mass production of 2-nm chips.
  • Japanese government-backed chipmaker Rapidus announced on Tuesday (Feb 28) that it will build a state-of-the-art semiconductor manufacturing plant in Hokkaido in northern Japan as it seeks to begin mass production of chips with state-of-the-art 2-nanometer(nm) technology in five years.

    The plant will come up in Chitose, a manufacturing hub on the nation's northern island of Hokkaido.

    Last month, the company unveiled plans to set up a prototype production line for cutting-edge 2-nm semiconductors by the first half of 2025.

    Rapidus will spend $37 billion, including research and development, to launch mass production of 2-nm chips.

    Rapidus was formed by semiconductor veterans, including Atsuyoshi Koike (who was previously heading memory chip maker Western Digital Japan), with $510 million in subsidies from the Japanese government along with contributions from Toyota, Sony, Kioxia, NEC, NTT, Softbank and Denso with each company putting in $6.8 million. Tetsuro Higashi, former president of chipmaking equipment supplier Tokyo Electron, serves as chairman of Rapidus.

    If Rapidus is able to achieve its chip manufacturing ambition, it will help Japan in its attempt to regain leadership in chip industry. TSMC (Taiwan Semiconductor Manufacturing Co.), the world's largest contract chip maker, aims to begin full-scale 2-nm production in 2025.

    In December 2022, the company signed a chip licensing partnership with IBM Research to develop IBM's 2-nm technology in fabs that Rapidus will build in Japan. IBM announced the world's first 2-nm test chip in May 2021. The 2-nm structures will require Rapidus to use ASML's EUV manufacturing equipment.

    Rapidus also collaborates with the Belgium-based microelectronics research hub IMEC on advanced semiconductor technologies. IMEC works with major foundries, IDMs, fabless and fab lite companies, material and tool suppliers, EDA companies and application developers. Since its launch in 2011 until 2022, as many as 220 tech start-ups and spin-offs incubated by IMEC have transformed into sustainable enterprises. IMEC with a resource pool of 4,500 professionals, generates a revenue totalling $768 million in 2020.

    Japan is pursuing an all-out strategy to lure overseas semiconductor companies, including designing generous financial incentives.

    Besides funding Rapidus, Japan is providing up to $3.56 billion in subsidies for a new TSMC factory in Kumamoto, on the southernmost main Japanese island of Kyushu, that is set to begin operations in 2024.

    Japan is also providing incentives to Kioxia, and Micron Technology to build plants in Japan that manufacture semiconductors needed for data centers, artificial intelligence and other cutting-edge technologies.

    Japan lags behind South Korea and Taiwan in advanced chip manufacturing. It imports more than 60% of its semiconductors, much of them from Taiwan and China.

    The 10-nm chips that drive smartphone is dominated by chip manufacturers from Taiwan and South Korea, 28nm technology used in automobiles is mostly produced in Taiwan and China.

    Local Japanese player Renesas Electronics can mass-produce only up to 40nm chips domestically.

    Japan's share of global semiconductor sales plummeted to just 10% in 2019, down from 50% in 1988. The country still has 84 chip factories, the most in the world, but they're not producing enough high-end products. As a result, Japan now has to import 64% of its semiconductors.

    NEC, Toshiba and Hitachi were widely regarded as pioneers in the semiconductor industry during 1980s and 1990s. But this began to change in the 2000s as chip design became uncoupled from manufacturing, leading to the rise of contract foundries like TSMC


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