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IBM Backs Rapidus in Quest for Global Chip Supply Leadership

by Rahil M
0 comment

IBM’s support for Rapidus underscores the importance of nurturing domestic chip manufacturing capabilities, diversifying global chip supply sources, and reducing the dependence on just a single manufacturer.

International Business Machines Corp. (IBM) has pledged its resources to support Japan’s chipmaking startup, Rapidus Corp., as the budding foundry business is deemed crucial for securing long-term global chip supply. Rapidus, backed by major electronics firms in Japan, aims to produce IBM’s 2-nanometer chip design at scale in the latter half of this decade. This venture comes at a time of rising geopolitical tensions and protectionism, prompting Japan to bolster its local chipmaking capacity.

IBM Japan’s Chief Technology Officer, Norishige Morimoto, emphasized the company’s commitment to Rapidus, stating that they are focusing their efforts and investing a great deal of resources towards this project. He also mentioned that they want Rapidus to succeed and want it to contribute to a stable supply of the chips that the world needs.

Rapidus, a quasi-public project, has garnered government support and is led by experienced veterans of the semiconductor supply chain, including former executives from Tokyo Electron Ltd. and Western Digital Corp. The project aims to establish a world-class chipmaking foundry, competing with industry leader Taiwan Semiconductor Manufacturing Co. (TSMC) within a few years. Notable companies such as Toyota Motor Corp., Sony Group Corp., and Nippon Telegraph & Telephone Corp. have already invested in Rapidus.

To expedite development, Rapidus engineers have been sent to IBM’s Albany NanoTech Complex to design 2nm mass production lines while constructing their factory in Hokkaido. The project anticipates investing ¥5 trillion ($35 billion) in its 2nm chip initiative, a figure comparable to TSMC’s and Samsung Electronics Co.’s annual expenditure.

IBM is open to helping Rapidus secure additional deals with major chip firms, signaling a willingness to collaborate further. Morimoto further stated that no options are going to be ruled out as long as they match the company’s business needs. IBM already provides chipmaking technology to Samsung’s foundry division.

Rapidus employs key process technology from IBM, enabling the production of 2nm chip nodes and beyond. This technology utilizes a new kind of transistor composition called nanosheet. While this leap to advanced geometrics presents a significant challenge for Japan’s existing chip manufacturing capacity, Morimoto expresses confidence in the country’s seasoned chip engineers.

As the global post-Covid recovery takes hold and the demand for memory and computing power driven by artificial intelligence continues to rise, semiconductor demand is expected to grow. Inna Skvortsova, market analyst at industry body SEMI, projects global revenue to reach $1 trillion by 2030, doubling within a decade.

Currently, Samsung and TSMC are the only manufacturers capable of producing the most advanced chips. There is a growing interest, from Washington to Beijing and Brussels, in diversifying the sources of chip supply. Rapidus aims to provide a third option, which should be welcomed by industry leaders who have struggled to meet the increasing demand. Morimoto commented, “We know from our own experience that providing the newest generation of chips is not something that one company can handle alone. Both Samsung and TSMC will welcome Rapidus joining the club of cutting-edge chip manufacturers because, as things stand now, they are making customers wait. Rapidus taking some orders from them wouldn’t be an issue.”

TSMC Chairman Mark Liu has stated that he does not view Rapidus as a competitor, as the Japanese chipmaker’s focus will be on nurturing engineering talent.

IBM’s support for Rapidus underscores the importance of nurturing domestic chip manufacturing capabilities and diversifying global chip supply sources. The collaboration between Rapidus and IBM holds promise for Japan’s ambitions in the chip-making industry and the global semiconductor market’s future.

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