HOKKAIDO, Apr 19, 2025 (News On Japan) - Rapidus has begun operating a trial production line for cutting-edge 2-nanometer semiconductors this month at its plant in Chitose, Hokkaido. The launch marks a major milestone for Japan’s domestic semiconductor ambitions and has triggered a surge in land prices, new developments, and an influx of related companies into the city.
Driving through Chitose, home to New Chitose Airport, one can see numerous construction sites for new condominiums and buildings. A redevelopment wave is sweeping the city, and in commercial land price growth announced this March, Chitose ranked first through third nationwide.
This momentum was sparked by the construction of Rapidus’s semiconductor factory, which aims to revive Japan’s semiconductor manufacturing capabilities. The factory, located in the Chitose Bibi World industrial zone surrounded by nature, is tightly secured, with little visibility from outside. However, from the airport’s observation deck, the completed first plant can be seen.
"Launching the pilot line has started. We are moving forward with both hope and a sense of urgency," said a Rapidus representative. The trial line began operating on April 1st, aiming to achieve mass production of the world's most advanced 2nm semiconductors—something no other global manufacturer has yet accomplished. The Japanese government has backed Rapidus with over 1.7 trillion yen in support.
A second factory is also planned next to the current one, and by 2036, the project is expected to generate up to 18.8 trillion yen in economic impact across Hokkaido.
With Rapidus’s entry, semiconductor-related firms are rapidly setting up offices in Chitose. Screen SPE Service, part of the semiconductor equipment manufacturer Screen Holdings, opened a local office last November to support setup and maintenance.
"We’re receiving government support and expect continued growth. We're also looking to hire more local employees as we expand," said a Screen representative.
Finding office space has become a challenge. Screen and other major companies like Tokyo Electron and the Dutch semiconductor equipment giant ASML have moved into spaces within a shopping complex directly connected to JR Chitose Station, even sharing buildings with 100-yen shops. Currently, 37 semiconductor-related companies are operating in Chitose, with 84 more considering entry. Some have even moved into former rental car offices due to the lack of available space.
In response, real estate developers are pushing forward with redevelopment projects. One company is leading more than ten such projects, including a seven-story office building directly connected to the station and hotel developments, with a combined investment of about 10 billion yen.
The housing market is also tight. One real estate agency reported having only two vacant units available, both of which were already reserved. New properties are often reserved before showings, and competition for housing is fierce.
Rent prices have surged to around 1.5 times what they were before Rapidus's entry. "It's unavoidable. Land prices and labor costs are up. Students and others can’t afford the rising rents, which is becoming a problem," one resident said.
To address the housing shortage, Chitose has launched a housing support task force with 36 local real estate firms to share listings and assist incoming businesses, most of which are from outside Hokkaido.
The city is also taking steps to prevent problems seen in other semiconductor boomtowns, such as traffic congestion in Kikuyo, Kumamoto, where TSMC has built a factory. Chitose is building a bus transit system and other infrastructure in advance.
Near the Rapidus plant lies Chitose Institute of Science and Technology, which is deepening collaboration with Rapidus through joint research to train the next generation of engineers. Still, some students expressed uncertainty.
"It’s hard to feel secure unless the government provides proper support. Right now, there’s not much connection with Rapidus, but I hope that will change," said one student.
Among local voices, there is a mix of hope and anxiety.
Suzuki, owner of the long-running Toa Coffee Shop in Chitose, reflected on the city’s transformation. "After the bubble burst, Chitose was in decline. But things changed drastically with Rapidus. It's fun to run my shop again," he said.
Some residents expressed concern about rising taxes and rapid urban change, but many also voiced cautious optimism about the city’s future. "This area felt like it was dying. Now, I finally see hope," one said.
The city’s main shopping district is beginning to recover after years of decline, with new restaurants like a European-style bistro opening in February in a renovated space that had been vacant for two years. The restaurant emphasizes local ingredients and is priced on the higher end at around 5,000 yen per person, reflecting expectations of a higher-spending clientele linked to the semiconductor boom.
While Rapidus has yet to achieve full-scale production of next-generation chips, semiconductor analyst Akira Minamikawa says the company’s ambitions are significant.
"Mass production is a different challenge from small-batch samples. It requires highly advanced manufacturing technologies, which take time to develop. But if Japan can establish this capability, it will reduce global dependence on TSMC and bring new stability to the supply chain."
He added that the world is closely watching Rapidus as an alternative to Taiwan’s dominance, particularly given geopolitical risks.
Business commentator Irayama echoed the sentiment, describing the project as a high-risk, high-reward bet for Japan.
"Rapidus is likely using a one-wafer-at-a-time method combined with AI to boost yield. It’s a novel and promising approach. Plus, Japan’s strength in integrating front-end and back-end processes could position it well for chiplet production—a key next-gen technology," Irayama said.
By mid-summer, observers hope to see whether the pilot line will be a success.
Source: TBS
