"Building a semiconductor fab on the moon" sounds like a sci-fi movie setting. However, Atsushi Koike, President of Rapidus, stated this very seriously—the moon has water, which can support the manufacturing process, along with SpaceX's lunar transport vision. Thus, this Japanese semiconductor "national team" is advancing its 2nm pilot line in Hokkaido while setting its sights 380,000 kilometers away.
Back on Earth, the competition in the wafer foundry market is not slowing down either: TSMC (Taiwan Semiconductor Manufacturing Company) continues to break records, Samsung Electronics is accelerating its 2nm progress, and domestic capacity expansion is also underway. The moon is a long-term vision; current capacity, yield rates, and orders are the increasingly intense battlegrounds.
01. Rapidus Plans to Build a Semiconductor Fab on the Moon
According to China News Service's Jingwei, citing media reports, Atsushi Koike, President of Japanese semiconductor company Rapidus, delivered a speech at an event hosted by the Hudson Institute in the United States, proposing a plan to build a semiconductor fab on the lunar surface around 2040.
Koike stated on-site, "This is not a joke, but a serious plan," noting that the lunar surface possesses the water resources required for semiconductor manufacturing. During the speech, he showcased an AI-generated concept video of a lunar fab and mentioned SpaceX's lunar transport project, saying that Elon Musk would likely appreciate the concept.
Arvind Krishna, CEO of IBM, Rapidus's technology partner, also attended the event, where he confirmed that IBM and Rapidus are jointly advancing the R&D of 1nm-level chip technology.
Founded in August 2022, Rapidus is regarded as Japan's semiconductor "national team." It was jointly funded by the Japanese government and eight leading domestic enterprises, including Toyota, Sony, NTT, NEC, and Kioxia. Headquartered in Tokyo, its core goal is to master 2nm advanced logic chip manufacturing technology and build advanced wafer foundry capabilities in Japan.
As a core project for Japan to revitalize its advanced process nodes, Rapidus has continuously received multi-level financial support from the government, categorized into IPA equity investments and NEDO R&D subsidies. Japan's IPA agency completed two rounds of equity investments in February and June 2026, totaling 250 billion yen, with the 150 billion yen capital increase in June being the latest government equity investment to date. Coupled with NEDO's national-level special R&D subsidies, the approved R&D grant scale amounts to approximately 1.72 trillion yen.
According to the plan, by fiscal year 2027, the total financial support from government equity and special subsidies will approach 3 trillion yen, all of which will be used for 2nm production line construction, EUV (Extreme Ultraviolet) Lithography equipment procurement, and GAA (Gate-All-Around) process R&D.
Relying on this national-level funding, Rapidus's IIM pilot production line in Chitose, Hokkaido, is advancing steadily. The pilot line officially commenced production in April 2025 and completed the tape-out of 2nm GAA prototype wafers in July of the same year. In 2026, it will continue to advance process tuning, PDK (Process Design Kit) development, and chiplet advanced packaging technology verification, with early customer collaborations established with companies such as Fujitsu and Tenstorrent.
According to the officially disclosed roadmap, Rapidus aims to commence mass production of its 2nm process in the second half of 2027, with an initial monthly capacity of 6,000 wafers, ramping up to 25,000 wafers per month within a year after mass production. Following the mass production of 2nm, the company will sequentially plan R&D for 1.4nm and 1nm processes, with a medium- to long-term goal of completing its IPO in 2031.
02. The Moon is a Long-Term Vision, While Wafer Foundries on Earth are Surging
Building a fab on the moon remains a long-term plan for Rapidus. Shifting the focus back to Earth, the global wafer foundry market is currently maintaining overall growth.
According to the latest wafer foundry industry research by TrendForce, the combined output value of the world's top ten wafer foundries increased by 11.5% quarter-over-quarter in the second quarter of 2026, approaching 53.49 billion USD and hitting a new record high. TSMC's market share rose to a record 72.5%, Samsung Electronics ranked second with 5.9%, and SMIC (Semiconductor Manufacturing International Corporation) rose to 5.4%, ranking third. [Related Reading]
TSMC's single-month revenue in August reached 514.8 billion TWD (a 53.3% year-over-year increase), hitting a historical high and breaking records for four consecutive months. Additionally, supply chain sources indicate that TSMC's 3nm monthly wafer start target of 180,000 wafers by the end of the year is expected to be achieved ahead of schedule. Five 2nm fabs are ramping up simultaneously, with nearly 20 fabs under construction globally.
For the next-generation process nodes, TSMC is also accelerating. According to media reports, the construction progress of TSMC's 1.4nm (A14 process) fab in the Central Taiwan Science Park is ahead of schedule. The first fab is expected to begin trial production in April 2027, with commercial mass production starting as early as the second half of 2027, approximately one year earlier than the originally planned mass production time of 2028. The A14 mass production time previously disclosed by TSMC in its earnings calls and shareholders' meeting materials remains 2028.
As for Samsung, according to Cailian Press, thanks to the continuous influx of 2nm process orders, driven by massive orders from US tech companies such as Tesla and Broadcom, Samsung Electronics's fab in Taylor, Texas, USA, will begin trial production at the end of this month and the beginning of next month. It has currently reached full capacity operation, with all planned production volumes fully booked. It is reported that the yield rate of the 2nm process was about 60% at the beginning of this year, and has recently reached around 80%, possessing mass production capabilities. The fab plans to commence mass production next year.
In mainland China, Wuxi Xihong Guoxin Phase II Investment Co., Ltd. was recently established with a registered capital of 6 billion CNY, jointly held by Wuxi Guolian Industrial Investment Group Co., Ltd., Wuxi Industrial Development Group Co., Ltd., and others.
According to the capital increase plan disclosed by Hua Hong Semiconductor, Wuxi Xihong Guoxin Phase II plans to invest 834 million USD to acquire a 20% equity stake in the project entity, Wuxi Hua Hong Semiconductor Phase III Co., Ltd. The Wuxi Phase III project plans to build a 12-inch specialty process foundry production line with a monthly capacity of 55,000 wafers. The total investment for the project is 6.95 billion USD, with plans to complete the production line construction and commence production by December 2027.
The project will rely on the existing site conditions of Hua Hong Wuxi, expanding cleanrooms and power supporting facilities based on the original factory buildings, with a focus on expanding specialty process capabilities such as logic RF, image sensors, and non-volatile memory. According to an announcement by Hua Hong Semiconductor, the company plans to allocate a total of 5.556 billion CNY from over-raised funds and remaining raised funds from previous projects for the procurement of equipment and facility utilities for this project.
From an overall industry perspective, the global wafer foundry sector is in an upward cycle. On the demand side, the demand for AI (Artificial Intelligence) chips is driving continuous supply shortages in advanced process nodes, with foundry prices also being adjusted upward in the first half of 2026. Mature process nodes are recovering simultaneously, and the industry's output value continues to hit new highs. On the competition side, TSMC's market share has risen to a record high of 72.5%, followed by Samsung and SMIC, further increasing head concentration. On the supply side, 2nm mass production nodes are concentrated around 2027, and next-generation process nodes such as 1.4nm are already on the schedule. Capacity construction by manufacturers such as TSMC, Samsung, and Hua Hong Semiconductor is advancing simultaneously in multiple locations globally. The industry as a whole is showing an expansion trend with demand, prices, and capacity rising simultaneously.
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