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Broadcom's Stock Dips Amid Pioneering 2nm Collaboration with Japan's Rapidus

Market BriefMonday, Jan 13, 2025 3:06 am ET

1min read

As of last week, Broadcom Inc. (AVGO) saw a 2.18% decline in its stock price. Over the past week, the stock has dropped by 3.54%, contributing to a year-to-date decrease of 3.25%. The company's current market capitalization stands at approximately $1.05 trillion.

Recent reports highlight a collaboration between Broadcom and Japan's Rapidus, a firm dedicated to the mass production of advanced semiconductors. Rapidus plans to supply Broadcom with 2nm prototype products by June 2025. Success in developing these prototypes could lead to increased commercial production by Rapidus, establishing it as a significant foundry partner for Broadcom.

Rapidus intends to offer foundry services for custom semiconductor designs and aims to begin trial production in April, with the goal of operationalizing its mass production facilities by 2027. The company's headquarters are located in Tokyo, and it was founded in 2022 with backing from major Japanese corporations like Toyota, Sony, and SoftBank. The Japanese government supports Rapidus’s ambition to become a leading foundry akin to Taiwan Semiconductor Manufacturing Company (TSMC). Its first 2nm wafer fabrication plant is set to be constructed in Chitose, Hokkaido, marking it as Japan's inaugural 2nm facility.

Broadcom, ranked fifth globally among semiconductor companies, does not own manufacturing facilities, focusing instead on design and research. Its strengths lie in data center semiconductors. If Broadcom approves the quality of Rapidus's 2nm semiconductors, Rapidus is poised to become a key manufacturing partner.

Currently, industry leaders like TSMC and Samsung have commenced 3nm production, shifting focus to the next frontier: 2nm technology. Rapidus has joined this competitive race with strong government backing, including a 70 billion yen subsidy to advance Japan's semiconductor industry.

In other Broadcom-related news, a company director, LOWCHECKKIAN, reported selling 96,000 shares on January 6, 2025.

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