IBM will help Japan’s new government-backed semiconductor company commercialize advanced 2nm chips to revitalize the country’s role in the industry and diversify the global supply chain.
Big Blue announced a development partnership with the fledgling Japanese chipmaker, Rapidus Corporation, that will allow the manufacturer to commercialize IBM’s 2nm process technology for mass production.
The collaboration is expected to bear fruit in the second half of the 2020s. A previous report said a facility could open between 2025 and 2027.
The deal is important to Japan’s ambition of once again becoming a chip manufacturing player. Japan was a force in the semiconductor biz decades past, but peaked in the 1970s and 1980s according to the Center for Strategic and International Studies.
“This is a long-desired international collaboration, truly essential for Japan to once again play a vital role in the semiconductor supply chain,” said Atsuyoshi Koike, president and CEO of Rapidus.
Rapidus will commercialize the 2nm process node IBM revealed last year. Big Blue has previously said its 2nm chips can achieve 45 percent greater performance or consume 75 percent less energy than 7nm chips made by contract chip-making rivals like Taiwan’s TSMC and South Korea’s Samsung.
It’s not yet known where Rapidus will build a fab in Japan to manufacture the chips.
Japan’s government announced the formation of Rapidus in November 2022, and is expected to inject 70 billion yen ($500 million) into the company. That sum will go towards research, development, design, manufacture, and sale of advanced logic semiconductors such as CPUs and GPUs.
That level of investment will not be enough to fund the development of fabs, which typically require tens of billions of dollars to build, but sources told Reuters that additional funding is coming albeit from unspecified sources.
Rapidus does have support from a number of Japanese companies that stand to benefit from a domestic supply of advanced chips: Toyota, Sony, NTT, SoftBank, Kioxia, Denso, NEC, and MUFG Bank.
IBM’s announcement with Rapidus arrived the same day Bloomberg reported that Japan’s government “agreed in principle” to join the United States’ efforts to weaken China’s semiconductor industry by ramping up restrictions on the sale of advanced chip-making equipment to the country.
The two recent developments were preceded by a White House announcement in May 2022, when President Joe Biden and Japan’s Prime Minister, Fumio Kishida, reached an agreement that called for “protecting and promoting critical technologies, including through the use of export controls, supporting their respective competitive advantages, and ensuring supply chain resilience.”
This is quite the reversal from US-Japan relations a few decades ago, when US policymakers pressured Japan’s government in 1986 to agree to minimum pricing for chip exports while increasing the share of foreign-made chips in the Japanese market.
The Center for Strategic and International Studies said the agreement — which followed complaints that Japanese firms were trying to crowd out US firms with cheap chip exports while blocking foreign participation in the Japanese market — “eroded” the competitiveness of Japan’s semiconductor companies at the time.
Fast forward to 2022, and the two countries have shared concerns over China, including the communist state’s aggression against Taiwan, where most of the world’s most advanced chips are currently made. Like Japan, the US is trying to increase its advanced chip-making capabilities and capacity, though it will take several years for both countries to take meaningful manufacturing share away from Taiwan. ®