Japan's Rapidus Moves To Break Taiwan Semiconductor's Grip With Cheaper AI Chips

As the global race to build cheaper, faster artificial intelligence chips intensifies, Japan's Rapidus is rolling out new manufacturing breakthroughs while challenging the long-standing dominance of Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM) and other industry leaders.

Rapidus Targets Lower-Cost AI Chip Production

Rapidus has developed a cost-cutting technology for AI-focused semiconductors. It has created a prototype of an interposer cut from a large glass substrate, aiming to start mass production in 2028.

The chipmaker is ramping up for full-scale production, intensifying competition with Taiwan Semiconductor, Nikkei reported Wednesday.

Also Read: MediaTek Adopts Taiwan Semiconductor 2nm Breakthrough For Flagship Chip

A January 2025 report said Rapidus is aiming to challenge Taiwan Semiconductor by preparing to deliver 2-nanometer chip samples to Broadcom Inc. (NASDAQ:AVGO).

Rapidus leveraged International Business Machines Corp (NYSE:IBM)-backed technology and heavy government funding to build a homegrown advanced chip manufacturing base.

In July, Rapidus said it had begun prototyping its 2-nanometer gate-all-around transistors at its IIM-1 foundry, with early wafers already showing electrical performance, as the company advances toward releasing a customer process kit in 2026 and launching mass production in 2027.

Taiwan Semiconductor Defends Its 2-Nanometer Lead

Taiwan Semiconductor continues to reinforce its leadership in 2-nanometer technology by expanding manufacturing sites and improving power efficiency and performance tailored for AI workloads. The company is pairing the advanced node with its Chip-on-Wafer-on-Substrate packaging technology to support larger and more complex computing demands.

Demand for cutting-edge capacity is tightening. Apple Inc. and Nvidia Corp. (NASDAQ:NVDA) are securing much of Taiwan Semiconductor's most advanced 2-nanometer output, contributing to a supply crunch that is pushing rival chip designers to explore alternative foundries as Taiwan Semiconductor races to add capacity.

Samsung And Intel Pursue 2-Nanometer Comebacks

Samsung Electronics Co., Ltd. (OTC:SSNLF) is working to regain momentum at the 2-nanometer node by stabilizing yields and scaling production at its fabrication plants in the U.S. and South Korea. Those efforts are beginning to attract early customers for processors and custom chips.

Intel Corp. (NASDAQ:INTC) is also advancing its own 2-nanometer-class process as it seeks to restore its standing in the global foundry market and compete more directly for advanced AI chip contracts.

TSM Price Action: Taiwan Semiconductor shares were up 0.53% at $288.38 during premarket trading on Wednesday, according to Benzinga Pro data.

Read Next:

• Intel Taps Taiwan Semiconductor For Advanced 2nm Process For AI-Powered Chips: Report

Photo by Gorodenkoff via Shutterstock