Japan’s Rapidus is said likely to miss mass production deadline

Japanese government-backed startup Rapidus has fallen behind schedule on its high-stakes pledge to mass produce cutting-edge chips by March 2028 and may no longer be able to make that deadline.

The startup, which has received billions of dollars’ worth of public funds, has yet to successfully produce a key type of advanced memory that’s an essential component of all processors, people familiar with the matter said. Rapidus has yet to produce functioning static random access memory cells, or SRAM, a critical step that needed to be done by the summer to manufacture 2-nanometer chips in time, they said.

Engineers are under intense pressure to pick up the pace, but the failure to meet that technological milestone means the company is at least months behind schedule, said the people, who asked not to be identified because the information isn’t public.

A significant delay may jeopardize public support for Rapidus, widely viewed as a long-shot attempt to build a top-tier foundry from scratch and lower Japan’s advanced chip reliance on Taiwan, which China claims as its own. Dust and particle control within the cleanroom remains another issue the company is working to resolve, the people said.

The government has so far officially earmarked more than ¥2 trillion ($13 billion) in state funding to Rapidus. Severe technological issues could also push back Rapidus’ goal of going public by 2032.

“Rapidus continues to devote its full efforts toward the start of mass production in the second half of fiscal 2027,” a spokesperson said in an email. The company declined to provide details about its technological development, which it said is confidential. In September, a panel of outside experts commissioned by a government agency reported the company’s development is progressing, it said.

Last month, Rapidus Chairperson Tetsuro Higashi said the venture was on track for mass production as scheduled, without elaborating.

Advanced logic chips require hundreds of millions of embedded SRAM cells. Manufacturers need to reproduce each of these cells, including their transistors, at atomic-scale precision to prevent operational failures and ensure stable data retention. At the nanometer scale, even a minor microscopic deviation can cause debilitating chip failures.

Rapidus will continue to pursue 2nm manufacturing and may ultimately succeed after some years’ delay, the people said. Rapidus seeks to compete against Taiwan Semiconductor Manufacturing, which is building facilities in the U.S., Intel and Samsung Electronics. All are racing to develop manufacturing processes and meet artificial intelligence service providers’ voracious demand for increasingly powerful chips.

After launching its pilot production line at its factory in Hokkaido, northern Japan, Rapidus said in July last year that it successfully manufactured functioning transistors — an early step toward making cutting-edge chips. Since then, technological progress has consisted mainly of process design kit releases.

Last month, Economy Minister Ryosei Akazawa said the government was ready to continue supporting Rapidus until the venture becomes financially viable, given the importance of cutting-edge chips for Japan’s economic security. Since Rapidus’ creation in 2022, TSMC has built a plant in southern Japan, with plans to build another factory that will manufacture 3nm chips.

In September, independent director Yoshimitsu Kobayashi said that Rapidus is targeting mass production with a yield of at least 80%, or four out of every five chips produced. Chief Executive Officer Atsuyoshi Koike, who has floated plans to build two additional factories in Hokkaido and a plant on the moon, and representative director Atsuo Shimizu have said that Kobayashi’s definition is not shared by all executives.