Rapidus: From Hokkaido to the World

For 14 months, a band of red construction cranes has been working tirelessly on the vast plot opposite New Chitose airport in Hokkaido. At a speed rarely associated with the Northern island, Japan's most advanced semiconductor plant is taking shape. The ambitious project led by Rapidus plans to start test operations for its next-generation microchip in April.

"From Hokkaido to the world," says Rapidus President Atsuyoshi Koike. At 71, he shows an amount of enthusiasm unusual for an engineer of his generation.

His startup has already made history. It is the first in Japan to receive a tool so advanced that it can produce a 2-nanometer chip. Saying that this is small, is an understatement. A nanometer is one billionth of a meter, 0.000000001 meters. Putting it in perspective, it's about the size of a single silicon atom.

Equally impressive is the scale of the equipment, which is the opposite of small. The NXE 3800E state-of-the-art EUV lithography device is used to produce the tiny chip. It weighs more than 70 tons and is over 3 meters high. "Three jumbo jets had to be mobilized to bring the equipment over from the Netherlands", explained Koike at an event in Chitose City on Wednesday, December 18.

*Rapidus's state-of-the-art lithography equipment made by ASLM arrives at New Chitose Airport (Provided by the company)*

Amazing Feat of Engineering

Installation of the semiconductor tool produced by ASLM is supposed to be completed by the end of December. The Dutch company is the only one producing this machinery. ASLM's Executive Vice President James Koonmen calls the tool an "amazing feat of engineering." It uses extreme ultraviolet light to etch intricate circuit patterns on silicon wafers. These tiny pieces of silicon are the foundation of the digital world. They operate smartphones, medical devices, cars, and increasingly almost everything else in our daily lives.

Rapidus is ambitious in scope and scale. It wants to be the first company in the world to mass produce the 2nm microchip, also dubbed the AI chip, because it is seen as essential for future Artificial intelligence-driven operations. Commercial semiconductor production is scheduled to begin in 2027.

Rapidus will be all Japanese. That contrasts with the new microchip plant in Kumamoto headed by established market player Taiwan Semiconductor Manufacturing Company (TSMC) from Taiwan.

Despite being in Hokkaido, Koike refers to Tokyo landmarks as reference points to illustrate the sheer size of the production plant in Chitose City. Rapidus's site area is 1.14 times bigger than Tokyo Disneyland. The building is 1.23 times larger than Tokyo Dome. Moreover, 1.14 times more steel is going into the construction than was used for Tokyo Sky Tree.

Then, to explain the progress, Koike turns to a black-and-white photo of Mount Fuji with a red arrow about halfway up Japan's highest mountain. Clearly, Rapidus still has some way to go.

*Rapidus President Atsuyoshi Koike addresses the press conference with a projection of Mount Fuji in the background. (©Agnes Tandler)*

Shaping the Future

In a push to promote the domestic production of microchips, the Japanese government has funded the Rapidus project with over ¥900 billion JPY ($5.75 billion USD) so far. Private companies like Toyota and Sony have also invested in the startup. The aim is for Japan to compete with global leaders like Taiwan and South Korea.

Koike is confident that Rapidus can pull this off. "The 2-nm technology will change our lives," he adds. He points to Hokkaido's agricultural sectors where farms are struggling to find workers and farmers are getting old with little hope of finding young people who want to take over their business. Koike hopes that the AI chip will help overcome problems faced by aging societies. With AI, fully automated farms could raise livestock or grow food in the future.

Fundamental to this is the tiny AI chips that Rapidus wants to mass produce. Only the 2-nm chip can provide the speed needed to process the huge amount of data needed to run complex operations like a robotic farm or self-driving cars and trucks.

Hokkaido serves as a good illustration of the future challenges Japan faces. However, it is not a natural choice of location for Japan's semiconductor race. The northernmost main island of Japan is the size of Ireland with a population of just 5 million. Regarded as peripheral and provincial by many in Tokyo it carves out a living with agriculture, fisheries, and tourism.

At times, Hokkaido's natural beauty serves as a backdrop to Japanese movies and TV series. However, young people in Hokkaido are much less romantic than scriptwriters. They often leave the island as soon as possible to look for opportunities and good salaries in Tokyo or other economic power centers in Japan.

No Silicon Valley Vibes

It would be more than a stretch to call Chitose Japan's Silicon Valley. Located 50 kilometers southeast of Sapporo – the island's biggest city – Chitose has no notable features other than being home to the biggest airport in Hokkaido and Chitose air base. With only 95.000 inhabitants and two high schools, there is not much on offer for residents and visitors alike.

Most people come to Chitose to leave, not to stay. Chitose's mayor Ruyichi Yokota is certainly aware of the challenge of hosting a new tech company. "Chitose will do its best to provide the infrastructure and accommodate Rapidus," he says.

*A cargo plane carrying state-of-the-art lithography equipment for Rapidus lands at New Chitose Airport (Provided by the company)*

Certainly, the city has cheap land, plenty of water, and an airport. But Rapidus's future workforce might have to come from somewhere else. The region's relative isolation might make it difficult to recruit and retain engineers, many of whom would want to live in or around Tokyo or Osaka. And how much impact Rapidus will have on the local economy also remains to be seen.

Japan has a long history of industrial interventions and it has fared pretty well in the past. However, it has also suffered spectacular failures. Take Elpida, for example. The semiconductor giant became the biggest Japanese manufacturing bankruptcy after World War II, despite a massive rescue operation by the Japanese government.

There is little doubt that Rapidus represents a domestic effort with a higher risk of disappointments. After all, it is an all-Japanese startup, unlike the semiconductor plant in Kumamoto, which is a public-private collaboration driven by Taiwan's TSMC, a leader in the field.

Doing Nothing is Not an Option

Despite these reservations, Japan's decision to pump public money into its semiconductor industry certainly makes sense. After all, semiconductors and their value for future technological development are of key importance to national security and economic stability. Having lost its global dominance in the 1980s and 1990s Japan is now re-entering the cutting-edge semiconductor race. Some say this is Japan's last chance to catch up.

Rapidus President Atsuyoshi Koike and other participants in the Rapidus press conference, including the mayor of Chitose, governor of Hokkaido, and Ambassador of the Netherlands to Japan, stand for a group photo. (Provided by the company)

There is also fear that global supply chains could be interrupted amidst rising tensions between the United States and China. In a more volatile world, Rapidus could help safeguard Japan's economy. However, it will not be easy for a newcomer to compete with key global semiconductor players.

Koike hopes Rapidus will beat its competitors with a more speedy production time. "Be fast to be first", he says.