IBM puts weight behind Japanese chip startup it sees as vital

(Bloomberg) – International Business Machines Corp. prioritizes aid to Japanese chipmaker startup Rapidus Corp., with a senior executive describing the fledgling foundry business as essential to securing long-term global supply.

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Rapidus, a company backed by some of Japan’s biggest electronics companies, is turning IBM’s 2-nanometer chip design into production-ready silicon and aims to manufacture such chips on a large scale in the second half of this decade. The most advanced semiconductors today are built at the largest node of 3 nm.

“When it comes to 2nm technology, we are focusing our efforts on Rapidus and investing a lot of resources in this project, even sacrificing some capacity that we could have used in other research,” said Norishige Morimoto, director of the technology from IBM Japan, to Bloomberg News. in an interview. “We want Rapidus to succeed. We want it to contribute to a stable supply of chips that we and the world need.

Rapidus is a quasi-public project that started last year as a venture to boost Japan’s local chipmaking capacity at a time of growing geopolitical tensions and protectionism. It enjoys government support and is led by veterans of the semiconductor supply chain, including Tetsuro Higashi, the former chairman of Tokyo Electron Ltd., and Atsuyoshi Koike, the former Japanese chairman of Western Digital Corp. .

The daunting task ahead of them is to build a world-class chip-making foundry – making silicon for outside customers – to catch up with industry leader Taiwan Semiconductor Manufacturing Co. in a few years. The duo have attracted investment from companies including Toyota Motor Corp., Sony Group Corp. and Nippon Telegraph & Telephone Corp. Rapidus works with IBM and the IMEC microelectronics research center based in Belgium.

Rapidus engineers were sent to IBM’s Albany NanoTech Complex to design 2nm mass-production lines during the construction of its factory in Hokkaido, speeding up the development process. The Japanese company plans to invest 5 trillion yen ($35 billion) in its 2nm project, roughly matching the annual spending of TSMC and fellow chipmaker Samsung Electronics Co.

Read more: Chip industry veteran aims to help Japan build its own TSMC

IBM would be willing to help Rapidus strike other deals with major chip companies. “We don’t rule out any option as long as it fits our business needs,” Morimoto said. IBM also supplies chipmaking technology to Samsung’s foundry division.

“Rapidus and Samsung are on the same platform as they both use IBM technology, and it’s very possible that the two could have a win-win partnership as their business models are quite different,” said Akira Minamikawa, analyst at Omdia.

Read more: Japan’s Rapidus seeks billions to restart chip business

IBM provides key Rapidus process technology that enables chip nodes of 2nm and beyond, using a new type of transistor composition called nanosheet. Moving to such advanced geometries is a huge leap from Japan’s existing capability, which negotiates more mature nodes like 40nm, but Morimoto is confident in the country’s extensive roster of seasoned chip engineers.

Semiconductor demand is expected to continue to grow as the post-Covid recovery takes hold and the boom in artificial intelligence drives the need for more memory and computing power.

Global revenues are expected to reach $1 trillion by 2030, doubling in the space of a decade, according to Inna Skvortsova, market analyst at industry body SEMI.

Currently, only Samsung and TSMC can produce the most advanced chips and there is widespread interest – from Washington to Beijing and Brussels – in adding more redundancy to sources of supply. Rapidus would ideally offer a third option and, moreover, should be welcomed by industry leaders who have struggled to keep up with demand, Morimoto said.

“We know from our own experience that delivering the latest generation of chips is not something one company can handle alone,” he said. “Both TSMC and Samsung will welcome Rapidus to the club of advanced chipmakers because as things stand they keep customers waiting. Taking orders from Rapidus would not be a problem.

TSMC President Mark Liu said he doesn’t see Rapidus as a competitor because the Japanese chipmaker will focus on fostering engineering talent.

–With help from Takahiko Hyuga and Debby Wu.

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