Billion dollar ambition to build ‘Japan’s TSMC’

Rapidus, a company backed by Sony, Toyota and the Japanese Government, is raising billions of dollars to build a chip factory.

Atsuyoshi Koike, CEO of Rapidus, said the company’s goal is to create advanced chip models from the beginning. “Our great ambition is to realize a ‘Hokkaido Valley’ stretching from Tomakomai to Ishikari, which can compete with Silicon Valley in terms of scale,” he said. “We have the potential to become a new North Star in setting trends in the global chip industry.”

Workers work in the clean room of a semiconductor factory in Mie Prefecture, Japan. Image: JapanNews/Kioxia

Koike, 71 years old, was a former director of Western Digital. Meanwhile, Rapidus was founded in August last year, is headquartered in Tokyo and is backed by large corporations in Japan such as Sony and Toyota and is the focus of projects that Prime Minister Fumio Kishida set out to achieve. restore Japan’s status as a chip superpower.

An official in the Japanese government revealed to Bloomberg that the country has allocated $2.4 billion for Rapidus alone, and is ready to provide additional annual budget. By producing its own advanced chips, the country can reduce its dependence on foreign companies such as TSMC or Samsung.

According to Mr. Koike, Rapidus is planning to mass produce 2 nm chips by 2027. If successful, this will be a technological leap for Japan, where chip manufacturing capabilities stagnated decades ago and currently only produces chip models from 40 nm. TSMC, the world’s largest contract chip manufacturer, is mainly foundrying chips on the 4 nm process and recently began churning out 3 nm chips for Apple.

Rapidus is currently inviting manufacturers in the global supply chain to invest in Hokkaido province, where it is building a factory to prepare for the installation and operation of a chip pilot production line by 2025. Hokkaido, which has abundant clean water resources and is one of the potential areas to install renewable energy systems, is considered an ideal location to build a chip factory.

Mr. Koike said that instead of competing with semiconductor giants on a global scale, the company will focus on pioneering specialized chips, such as low-power AI chips.

However, Rapidus also faces difficulties in its ambition to become “Japan’s TSMC” when it cannot recruit enough high-quality workers. The company currently only attracts 200 people, a very small number compared to more than 73,000 people at TSMC. The Taiwanese company is also actively recruiting people for its new factory in Kumamoto prefecture in southwestern Japan.

Earlier this year, Rapidus President Tetsuro Higashi told Reuters that the joint venture would need 7 trillion yen ($54 billion) to begin mass production of advanced chips by 2027. Last December, the Japanese Government announced an initial funding of 70 billion yen ($544 million) for Rapidus. This same month, the company joined hands with IBM to research and develop 2 nm chips.

According to Mr. Koike, Japan’s ambition to be self-sufficient in production will soon succeed. “Creating the ‘Hokkaido Valley’ version will take time but is feasible. We want to achieve it by 2030,” he said.

Bao Lam (according to Bloomberg)

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