Rapidus, a Japanese semiconductor company, is racing against a 2027 deadline to achieve mass production of 2nm chips, a technology currently dominated by TSMC and Samsung.

Industry analysts draw comparisons to Samsung's difficulties in scaling its 3nm technology, while Rapidus benefits from partnerships with IBM and Imec and support from Japan's METI.

For the remainder of 2025, Rapidus is expected to receive around 100 billion yen (approximately 677.6 million USD) to aid its mass production efforts.

Key challenges for Rapidus include mastering complex production technologies, financial pressures from escalating costs, and a shortage of experienced engineers.

Backed by a substantial investment of $12 billion from the Japanese government, Rapidus aims to establish Japan as a key player in the semiconductor industry, particularly for advanced applications in AI and defense.

The Japanese government has committed £1.7 trillion ($12 billion) in subsidies and streamlined regulations to support Rapidus and its initiatives in advanced chipmaking.

However, Rapidus faces significant challenges, including transitioning from trial production to high-yield manufacturing, financial pressures from complex supply chains, and a shortage of engineers skilled in EUV processes.

The company's Chitose fab in Hokkaido has begun trial production using advanced EUV lithography tools, which are critical for 2nm chip fabrication.

Despite these challenges, the support from the Japanese government is seen as a stabilizing factor that may prevent Rapidus from moving its operations abroad.

Industry analyst Hideki Wakabayashi warns that failure to meet the 2027 deadline could result in a significant loss of Japan's semiconductor expertise, with firms relocating overseas and taking talent with them.

Success in mastering 2nm technology is crucial for Japan to regain leadership in advanced semiconductors and support next-generation technologies like AI, quantum computing, and defense systems.

The outcome of Rapidus' efforts is vital for Japan's semiconductor ecosystem, with implications for global supply chains and technological sovereignty.