Japan's Rapidus is set to start building a second plant in Hokkaido in fiscal 2027 and expects to produce 1.4-nanometer chips as early as 2029 as it moves to close the gap with industry leader Taiwan Semiconductor Manufacturing (TSM), Nikkei Asia reported Tuesday.

Taiwan Semiconductor plans to mass-produce 2-nanometer chips this year and 1.4-nanometer chips in 2028, according to the report.

Rapidus expects to receive hundreds of billions of yen from the Japanese government, which will be used partly for research and development, the report said.

Rapidus and Taiwan Semiconductor didn't immediately reply to MT Newswires' requests for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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