Rapidus has secured $1.7 billion in funding from the Japanese government and 32 private companies to mass-produce 2nm chips by 2027, positioning itself as a potential rival to TSMC and Samsung in the competitive semiconductor market.
Japan's semiconductor ambitions have taken a significant leap forward with Rapidus securing $1.7 billion in funding to pursue mass production of 2nm chips by 2027. The funding round, which includes contributions from the Japanese government and 32 private-sector companies, positions the four-year-old startup as a potential challenger to established giants like Taiwan's TSMC and South Korea's Samsung in the highly competitive advanced chip manufacturing market.
Government and Industry Backing
The funding package breaks down to ¥267.6 billion (approximately $1.7 billion), with ¥100 billion coming from the Information-technology Promotion Agency (IPA), an independent administrative body under the Ministry of Economy, Trade and Industry (METI). The remaining ¥167.6 billion has been sourced from a diverse group of 32 companies including Canon, Fujitsu, NTT, SoftBank, Development Bank of Japan, and Sony Group.
This substantial financial backing reflects Japan's strategic push to revitalize its semiconductor industry, which has seen its global market share decline over the past decades. The Japanese government has now become the largest shareholder in Rapidus, holding 11.5 percent of its voting rights, along with a "golden share" that grants veto power over key management decisions.
Strategic Partnerships and Technology Development
Rapidus has strategically partnered with IBM and the Belgian-based research organization Imec (Interuniversity Microelectronics Center) to develop the technology required for 2nm production. IBM, which claimed to be the first company to demonstrate 2nm chips in 2021, brings valuable expertise to the collaboration, though it lacks the manufacturing facilities for mass production.
The company's ambitious timeline aims to progress from its current research and development phase to mass production of 2nm silicon by 2027. This aggressive schedule puts Rapidus in direct competition with TSMC and Samsung, both of which began volume production using their own 2nm processes in the fourth quarter of 2025.
Market Position and Competitive Strategy
Industry analysts suggest that Rapidus is unlikely to immediately match the production volumes of established players like TSMC and Samsung. However, the company's value proposition focuses on small-volume production with fast turnaround times, which could attract chip designers who need to iterate their designs quickly.
Manoj Sukumaran, Principal Analyst for Data Center IT at Omdia, explained to The Register: "The value proposition of Rapidus is small volumes at fast turnaround time. Being a small fab and also aligning the manufacturing setup for large number of small batches will help to attract companies who are iterating their chip designs fast."
This niche positioning could prove valuable for companies developing cutting-edge semiconductor products that require rapid prototyping and small production runs before scaling to larger foundries.
Challenges Ahead
Despite the significant funding and strategic partnerships, Rapidus faces substantial challenges in achieving its 2027 production target. The company must integrate with electronic design tools and ensure chipmakers can test and validate their intellectual property on the new process node before delivering any products.
The path from R&D to mass production involves numerous technical hurdles, including the development of advanced lithography techniques, material science innovations, and sophisticated manufacturing processes that can reliably produce chips at the 2nm scale.
National Strategic Importance
The Japanese government views Rapidus as a critical component of its economic growth strategy and a matter of national importance. Minister for Economy, Trade and Industry Ryosei Akazawa emphasized the project's significance, stating it is "a key element of the investments for growth promoted by the government and a national project that must succeed for the sake of the country's interests."
This government backing extends beyond financial investment to include regulatory support and strategic coordination with other elements of Japan's semiconductor ecosystem. The initiative represents Japan's attempt to regain its former leadership position in semiconductor manufacturing, a sector where it once held significant global influence.
Industry Support and Supply Chain Integration
Fujifilm, one of the contributing companies, has committed to supporting Rapidus by providing semiconductor raw materials and next-generation process development technologies. As a supplier of critical materials used in chip manufacturing, Fujifilm's involvement helps ensure a robust domestic supply chain for Rapidus's operations.
The participation of major Japanese corporations across various sectors demonstrates broad industry support for the initiative and suggests a coordinated effort to rebuild Japan's semiconductor capabilities from materials through to final chip production.
Global Semiconductor Landscape
Rapidus's emergence comes at a time of increasing geopolitical tension and supply chain concerns in the semiconductor industry. Countries worldwide are investing heavily in domestic chip manufacturing capabilities to reduce dependence on foreign suppliers and ensure access to critical technologies.
The company's success could help diversify the global semiconductor manufacturing landscape, which has been dominated by a handful of players, particularly in East Asia. This diversification could provide chip designers with additional options for advanced node production and potentially reduce supply chain risks.
Looking Ahead
As Rapidus moves forward with its ambitious plans, the semiconductor industry will be watching closely to see if the company can deliver on its promises. The 2027 timeline for 2nm production represents a significant challenge, but the substantial funding, strategic partnerships, and government support provide a strong foundation for the company's efforts.
The success of Rapidus could mark a turning point for Japan's semiconductor industry and potentially reshape the global competitive landscape in advanced chip manufacturing. Whether it can truly challenge the established giants remains to be seen, but its emergence adds an intriguing new dimension to the ongoing race for semiconductor supremacy.
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