Rapidus, Japanese Chip Manufacturer, to Deliver 2-Nanometer Samples to Broadcom in Competition with TSMC

This content does not constitute investment advice. The author holds no financial positions in any of the stocks referenced herein.

Rapidus Targets June for First 2-Nanometer Chip Samples

According to recent reports from Japanese media, Rapidus, a semiconductor manufacturer in Japan, is set to provide AI chip designer Broadcom with its first 2-nanometer chip samples by June of this year. Currently, only Taiwan’s TSMC and South Korea’s Samsung have the capability to produce 2-nanometer chips, and neither has commenced mass production yet. As per The Nikkei, Rapidus is collaborating with U.S.-based IBM to advance its chip development efforts.

Competition Heating Up in the Chip Manufacturing Landscape

TSMC has announced its plans to initiate mass production of 2-nanometer chips later this year, with end products expected to reach consumers by 2026. This marks a significant progression from their existing 3-nanometer manufacturing technology. The transition to 2-nanometer technology introduces smaller feature sizes alongside an innovative transistor architecture.

Unlike the FinFET design utilized in their 3-nanometer chips, TSMC will integrate a new nanosheet transistor design for their upcoming 2-nanometer products. This change is pivotal, as nanosheets enhance the linkage area between a transistor’s gate and source, thereby minimizing leakage. This design innovation aims to boost overall power efficiency and performance.

Similarly, Samsung intends to incorporate an enhanced transistor design for its upcoming 2-nanometer chips. The company plans to utilize gate-all-around-FinFET (GAAFET) transistors, developed in collaboration with IBM. Like TSMC, Samsung is poised to launch its 2-nanometer chips into mass production later this year, following the setup of new manufacturing equipment in the fourth quarter of 2024.

FinFET vs GAAFET vs MBCFET — Samsung Foundry’s diagram illustrating the evolution of transistor designs from FinFET to GAAFET and MBCFET. The Korean company’s 3-nanometer process will leverage GAAFET technologies, cultivated in partnership with IBM. Image: Samsung Electronics

The Strategic Play by Rapidus to Fill Market Gaps

As the ramp-up of chip production remains a gradual endeavor, TSMC, for instance, methodically increases output to meet the demands of its primary customers. This often leads to a discrepancy between supply and demand for the latest chip technologies. Rapidus appears poised to exploit this market gap by launching sample production of their 2-nanometer chips as early as April.

Additionally, Rapidus aims to dispatch its initial samples to Broadcom in June. This ambition aligns well with the recent surge in Broadcom’s stock, which soared by 38% after the company disclosed its AI chip strategies. CEO Hock Tan has laid out an ambitious goal of shipping up to one million AI chips by 2027, potentially generating revenues between $60 billion and $90 billion in its fiscal year 2027.

Future Prospects and Support for Rapidus

Rapidus is strategically tapping into the anticipated growth in the AI chip market. While they plan to deliver 2-nanometer chip samples to Broadcom, full-scale production is not expected until 2027. Conversely, established mega fabs like TSMC benefit from extensive resources and expertise, allowing them to seamlessly upgrade their technological capabilities and maintain a steady output of cutting-edge chips.

Backed by a consortium of eight major Japanese firms, including notable names like Toyota and Sony, Rapidus is also focused on expanding its inventory of advanced extreme ultraviolet (EUV) manufacturing machines sourced from ASML, which are essential for producing the latest semiconductor technologies. To bolster these efforts, ASML is expected to open a new service center in Japan to support Rapidus’s initiatives.

Source & Images