Japan's Rapidus Begins Test Production of Advanced AI Chips, Aiming to Rival Global Leaders

Japan's state-backed chip venture Rapidus has started test production of next-generation 2-nanometer chips, marking a significant step in the country's ambitious plan to regain its position in the global semiconductor industry and produce advanced AI components.

Japan's Bold Move into Advanced Chipmaking

Japan has taken a significant step forward in its quest to reclaim its position as a global leader in semiconductor technology. Rapidus Corp., a state-backed chip venture, has begun test production of next-generation chips using 2-nanometer processes, marking a crucial milestone in Japan's efforts to produce its own artificial intelligence components 1.

Ambitious Goals and Government Support

Rapidus, a two-year-old company, aims to commence mass production of these advanced semiconductors by 2027. This ambitious timeline would potentially put Japan on par with industry leader Taiwan Semiconductor Manufacturing Co. (TSMC) in terms of chipmaking capabilities 2.

The Japanese government has demonstrated its commitment to this initiative by earmarking a substantial ¥1.72 trillion ($11.5 billion) to support Rapidus. This investment is part of a broader, long-term strategy to regain technological leadership that Japan has previously ceded to competitors such as the United States, Taiwan, and South Korea 1.

Technological Challenges and Milestones

Atsuyoshi Koike, the 72-year-old CEO of Rapidus, acknowledged the significant challenges involved in developing 2nm technology and mastering mass production techniques. He emphasized the need for continued experimentation to reduce error rates and build customer trust 2.

A key milestone was achieved on Tuesday when Rapidus conducted extreme ultraviolet lithography using equipment from ASML Holding NV for the first time. The company expects to produce its first batch of test chips by July and remains on schedule to begin mass production at its Hokkaido factory 2.

Strategic Importance and Skepticism

Japan's push to create a cutting-edge contract chipmaker from scratch has gained support from policymakers, driven by growing concerns about technological dependence on Taiwan, which China claims as its territory 2.

However, industry analysts remain skeptical about Rapidus's ambitious timeline. Kazuyoshi Saito, an analyst at Iwai Cosmo Securities, suggests that launching commercial 2nm production lines by 2027 is a long shot. He points out that Rapidus engineers are learning to use ASML's latest machines for the first time, which adds to the challenge 2.

Implications for the Global Semiconductor Industry

If successful, Rapidus's venture could significantly alter the landscape of the global semiconductor industry. It would not only boost Japan's technological capabilities but also potentially reduce the world's reliance on a handful of advanced chip manufacturers. This development is particularly crucial in the context of growing demand for AI components and increasing geopolitical tensions surrounding semiconductor supply chains.