Japan’s State‑Backed Chip Venture Rapidus Teams with IBM for 2‑nanometer Production
Japan’s attempt to regain a leading role in semiconductor manufacturing hinges on a newly created company called Rapidus. The firm was established in November 2022 and received an initial infusion of 70 billion yen from the national government.
On 13 December it announced a partnership with IBM to mass‑produce the American corporation’s 2‑nanometer chips, with the goal of beginning output in 2027 at a purpose‑built plant in Chitose on the northern island of Hokkaido. The timing of the agreement is linked to recent U.S. policy moves. Roughly three months before the deal, Washington imposed sweeping export controls that deny China access to sub‑7‑nanometer chipmaking equipment and expertise.
Those restrictions have curtailed Beijing’s drive for self‑sufficiency in advanced semiconductors. Japan, which once supplied about half of the world’s chips, has seen its share fall below 10 percent.
The COVID‑19 pandemic highlighted the vulnerability of this decline when China stockpiled chips and Japanese automakers and IT firms scrambled for supplies. Economy minister Yasutoshi Nishimura acknowledged the situation, stating that the government “will mobilise further budgets to secure stable chip supply for our auto and IT sectors.” His comment was seen as an admission that reliance on overseas foundries had left Japan exposed. Rapidus is positioned as Tokyo’s answer to industry leaders TSMC and Samsung, with Sony Group and NEC providing governance for the venture.
IBM will contribute the core 2‑nanometer design and the process recipe that originated at its Albany research laboratory. The technology employs a nanosheet architecture, allowing roughly 50 billion transistors to be placed on a die the size of a fingernail.
Compared with current 7‑nanometer products, the new node cuts power consumption by about 75 percent. IBM’s director of research, Dario Gil, described the collaboration as an effort that “will bring the world’s most advanced node to market years ahead of previous roadmaps.” As part of the agreement, IBM will license the technology to Rapidus and dispatch senior engineers to Hokkaido to support the startup. The arrangement also fits within the framework of U.S. export controls issued in October.
Those rules prohibit American companies from assisting China’s chip industry at advanced nodes. By transferring the 2‑nanometer know‑how to a Japanese partner, IBM stays compliant while keeping the process inside the broader U.S. alliance network.
Japan’s semiconductor sector once dominated global supply chains, but the advantage eroded steadily and then abruptly as investment waned, fabrication plants shut down, and the talent pool diminished. Today the government is trying to reverse a generation of retreat by backing a single state‑supported startup and relying on a foreign partner’s blueprints. Because chip development cycles are typically two years, the 2027 start‑up date represents a long runway.
By that time, TSMC and Samsung are expected to have progressed to 1.4‑nanometer or smaller nodes, meaning the 2‑nanometer technology Rapidus will produce will already be one generation behind the cutting edge. Consequently, the venture will enter the market playing catch‑up rather than leading.
Nevertheless, Japanese officials argue that securing a domestic source of advanced chips justifies the investment, even if the technology arrives later than the front‑runner schedule. The initial 70 billion‑yen allocation is viewed as a down‑payment, with Nishimura promising additional funding. The central question remains whether financial backing alone can rebuild the capabilities lost over several decades.
