[News] Rapidus’ Costly Bet on Cutting-Edge Nodes Raises Concerns, as Japanese Expert Calls for a Plan B

Japan’s Rapidus is making waves with its 2nm chip push, positioning itself against foundry giants like TSMC, Intel, and Samsung. But questions loom over its hefty investments and the absence of major client orders. A recent Asahi Shimbun report argues that Rapidus’ focus on extreme semiconductor miniaturization is outdated—like a 19th-century obsession with “big battleships and heavy cannons”—and misses the industry’s real trends.

Asahi Shimbun, citing Inoue Kouki, Chief Researcher of Japan Society for the Promotion of Machine Industry, notes that miniaturization is losing its edge in the semiconductor industry. Even with further scaling, issues like electron leakage and heat will likely cap performance gains.

Instead, Inoue suggests Japan should focus on advanced packaging, as this field is closely linked to manufacturing equipment and materials, where its firms already excel and can make a bigger impact with less investment.

Lack of Key Customers in Smartphones & Data Centers

Citing Inoue, the report highlights that today’s advanced semiconductors are primarily used in smartphones and data center servers, yet Rapidus has not secured long-term orders from key clients.

Without secured buyers, even a state-of-the-art Rapidus facility risks sitting idle and bleeding money. Inoue points to Intel as a cautionary tale, noting how the tech giant continues to struggle with foundry losses due to a lack of major external orders.

In contrast, Inoue notes that foundry leaders like TSMC first lock in demand from major customers like Apple, Qualcomm, and NVIDIA before co-developing new technologies—an approach vastly different from Rapidus’ strategy.

A Symbolic Bet? Japan’s Motives Behind Backing Rapidus

So why does the Japanese government continue to back Rapidus? Inoue suggests that buzzwords like “cutting-edge” and “world-first” attract attention, and Japan may be more focused on creating a symbolic industrial policy rather than making a well-thought-out, long-term plan, as per the report.

Rapidus was founded in 2022, and after that, the Japanese government has poured 920 billion yen (about USD 6.3 billion) into the company to back advanced semiconductor production and is now moving to amend the law for further large-scale support, the report notes.

Meanwhile, as Rapidus uses IBM’s semiconductor expertise and 2nm process, the report warns that the reliance on IBM may be risky, as the company no longer manufactures chips and mainly licenses its research. Unlike Intel and TSMC, Rapidus may be the only company which depends heavily on IBM’s expertise, the report adds.

As previously reportedly by Nikkei, Rapidus aims to deliver a 2nm prototype to US-based Broadcom as soon as June. Whether the results will justify the massive investment remains to be seen, but the world is watching closely.

Read more

• [News] Broadcom Reportedly Taps Rapidus for 2nm Chips, Samples Due by June
• [Insights] Exploring Rapidus’ Path to 2nm Mass Production: 3 Key Challenges Ahead

(Photo credit: Rapidus)