Japan's national champion has EUV running and a 2nm GAA prototype, but still lacks a single committed volume customer.
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Since opening the IIM-1 pilot line in April last year, the company has run wafers through Japan's first mass-production-grade EUV scanner, produced a 2nm gate-all-around prototype that reached its expected electrical characteristics in July, and closed a ¥267.6 billion funding round in February that made the Japanese government its largest shareholder. CEO Atsuyoshi Koike said the same month that more than 60 companies are in talks over 2nm capacity, but not one has yet signed a volume agreement. Given that its entire production base is the single IIM-1 facility, this leaves Rapidus with no diversification and no fallback site if the node doesn’t go ahead as planned. However, the fab has the hopes of an entire nation pinned on it, and its plans are promising. Here's the breakdown.
IIM-1, short for Innovative Integration for Manufacturing, broke ground in September 2023 at Bibi in Chitose, with the cleanroom completed in 2024. ASML delivered a TWINSCAN NXE:3800E in December 2024, the first mass-production-grade EUV system installed in Japan, and the tool completed its first exposure on April 1st last year. The pilot line also began operating that month.
Rapidus is currently targeting 2027 for mass production, but the company has given that date without any further qualification, with its business plan simply pointing to production beginning in the second half of fiscal 2027 and scaling to full volume in 2028. The same plan sets out a capacity ramp from roughly 6,000 wafer starts per month at the outset to around 25,000 within the first year, a fourfold increase that Rapidus is counting on to bring per-wafer costs down.
IIM-1’s siting in Chitose offers the abundant water that wafer cleaning demands, a cool climate that eases cooling loads, and some of Japan's strongest renewable-energy potential across wind, solar, and hydro. Local and prefectural authorities have organized around the project under a “Hokkaido Valley” initiative that aims to build a semiconductor cluster spanning Tomakomai, Chitose, and Ishikari.
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Rapidus’s 2nm node is a gate-all-around nanosheet design derived from the IBM 2nm process announced in 2021 , the product of a partnership signed in December 2022. Rapidus engineers worked alongside IBM at the Albany NanoTech Complex in New York to learn the node before transferring it to Chitose. More than 150 Rapidus engineers were dispatched to Albany across 2023 and 2024 to learn the node, with roughly 80 later returning to Chitose to transfer and tune the process for production, according to IBM.
The differentiator the company is leaning on is manufacturing flow, with IIM-1 running single-wafer front-end processing throughout, branded as Rapid and Unified Manufacturing Service, with per-wafer data fed into AI models that Rapidus says will accelerate yield learning and shorten turnaround compared with the batch processing used by TSMC and Samsung. It’s understood that the 2nm Process Design Kit (PDK) reached early customers in Q1 this year. Still, Rapidus hasn’t yet published a yield figure, and its public claims extend only to the prototype attaining expected electrical characteristics.
The program extends beyond the wafer, with Japan’s New Energy and Industrial Technology Development Organization (NEDO) approved fiscal 2026 budget for Rapidus providing funds for chiplet and package design and manufacturing technology for 2nm-generation semiconductors, alongside front-end work. The company has also floated panel-level glass-substrate packaging as part of its longer-term roadmap. Building that back-end capability in Chitose rather than outsourcing it would mirror the integrated approach Intel and Samsung take.
Rapidus’s February funding round closed at ¥267.6 billion, or about $1.7 billion, split between ¥100 billion from the government through the Information-technology Promotion Agency and ¥167.6 billion from 32 private companies. The state investment, the first made possible by a 2025 revision to Japan's subsidy law permitting government equity in Rapidus, made Tokyo the largest single shareholder, with a golden share giving it veto power over major decisions, including share transfers and technology partnerships.
That round sits on top of a much larger commitment from November, when Japan's Ministry of Trade and Industry added approximately ¥1 trillion in support across fiscal 2026 and 2027, lifting total planned government backing to about ¥2.9 trillion. The government added a further ¥150 billion in equity in early June, taking Rapidus’s combined capital and capital reserves to around ¥425 billion. The shares the state holds are structured as largely non-voting, keeping its formal voting position near 11.5%, but they convert to a controlling stake of roughly 60% if performance deteriorates, a clause that pairs with the golden share to give Tokyo both upside alignment and a downside lever.
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Key considerations
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Reference reading
- https://www.tomshardware.com/tech-industry/semiconductors/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/semiconductors/rapidus-fab-roadmap-examined#main
- https://www.tomshardware.com/my-account
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