Maintaining Taiwan's Technological Leadership: Hang On to the Chip Advantage
The global semiconductor industry is witnessing a surge of competition as more countries strive to secure a foothold or maintain their position in this critical technology. One such contender is Rapidus Corp, a Japanese government-backed company that has announced plans to start volume production of 2-nanometer chips in 2027.
Rapidus' ambitious goal could potentially challenge Taiwan Semiconductor Manufacturing Co (TSMC), the current industry leader, which overtook Intel in the tech race with 7-nanometer chips in 2018. TSMC has extended its dominance by producing the world's most advanced semiconductors.
Rapidus' first 2-nanometer chips have already been prototyped, and the company aims to rival TSMC's 2-nanometer chips, which are expected to start volume production by the end of this year. However, doubts have been raised about Rapidus' technology capabilities due to the absence of key data like yield rates and the number of functional chips produced.
C.Y. Shu, a semiconductor veteran, believes it is premature to judge Rapidus' technology capabilities due to insufficient information. Shu, who has warned that Japan could pay a high cost to build its own "silicon shield," also expressed concerns about small-scale orders from customers not being enough to support Rapidus' operations in the long term.
Meanwhile, Intel is reportedly considering abandoning a similar process technology unless customers show sufficient interest due to high research-and-development costs and its own financial difficulties. Intel is currently struggling to secure orders for its 18A technology.
The US government, on the other hand, recently reached an equity investment agreement with Intel, taking a 10% stake in the company using $8.9 billion in government grants under the CHIPS and Science Act. The US government's move is part of a broader effort to secure a foothold in the semiconductor industry.
Similarly, the EU wants to double Europe's share of global chip production to 20% by 2030 through the EU Chips Act. China is also continuing efforts to advance its semiconductor manufacturing capabilities, although access to key equipment for advanced chips is restricted.
Rapidus primarily targets fabless semiconductor companies as customers, focusing on specialized AI chips. Samsung Electronics, another major player in the industry, is reportedly planning to delay production of its 2-nanometer chips to next year.
The global chip industry is indeed facing intensifying competition, with TSMC's new-generation chip process, dubbed A14, on track to start volume production in 2028. As the race for technological advancement and chip supply independence accelerates, it will be interesting to see how Rapidus fares against the industry giants.
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