Japan's Rapidus, Intel, and China's SMIC are all making moves against the company that produces over 90% of the world's most advanced chips.
Rapidus wants to challenge TSMC where it matters most.
The Japanese semiconductor company was launched in 2022 with government backing to rebuild Japan’s position in advanced chip manufacturing. Its goal is to mass produce 2 nm logic chips by 2027, putting it in the same race as TSMC, Samsung and Intel at the most advanced end of the foundry market.
Rapidus is reportedly targeting 2 nm wafer pricing of about $18,460 to $21,540, compared with roughly $30,000 for TSMC’s 2 nm process and Intel’s 18A node. That would give Rapidus a cheaper entry point into the market for chips used in AI, data centers and high performance computing.
The problem is scale.
TSMC still dominates the pure play foundry market with a 72% share, while Samsung holds about 7%, according to Counterpoint Research. That gap shows how difficult it has been for even established rivals to take meaningful share from the Taiwanese chipmaker.
TSMC also has the customer relationships Rapidus still needs to build. Nvidia, AMD, Broadcom and other chip designers rely on TSMC not only for pricing, but for yield, reliability, packaging, process tools and capacity. A cheaper wafer matters less if a supplier cannot manufacture advanced chips consistently at volume.
The company’s latest results show why that lead is hard to close. TSMC reported $35.9 billion in first quarter revenue, with 3 nm chips accounting for 25% of wafer revenue and 5 nm chips accounting for 36%. It also guided second quarter revenue between $39 billion and $40.2 billion as AI demand continued to support advanced node capacity.
Rapidus has a clear opening. Governments and chip designers want more supply chain diversification, and Japan wants a stronger role in advanced semiconductor production. But competing with TSMC requires more than an aggressive price target.
The real test is whether Rapidus can move from pilot production to profitable mass production. Until then, it is a potential future competitor, not an immediate threat to TSMC’s dominance.
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