Japan's Rapidus says it is seriously planning to build a chip factory on the moon around 2040, a long-shot bet that signals how aggressively the company wants to challenge TSMC.

• Rapidus chief Atsuyoshi Koike said the moon plan is not a joke, pointing to water on the lunar surface as a key ingredient for making chips.
• He pitched the idea in Washington with an AI-made video of a lunar chip plant, saying Elon Musk would like it since SpaceX wants to haul people and cargo to the moon.
• The nearer-term goal is mass production of 2-nanometer chips in Hokkaido by 2027, with IBM providing the technology and now co-developing even smaller 1-nanometer chips.
• Koike says Rapidus will price its advanced chips at or below TSMC's level, because as the newcomer it cannot afford to lose on price.

Outlook: The moon factory is decades away and mostly a marketing move; the real test is whether Rapidus can hit its 2027 production target and undercut TSMC on price.