I fail to see how they will take a significant market share or even break even on this venture.

It's an overcrowded market. Far better would be to focus on semiconductor supply chain, which Japan already supplies some elements, to sell to fabs.

Because the bottleneck is the fabs. If a new 2 nm fab came online today, it would immediately sell all its capacity to 2030 no problem, without Fujitsu trying this gambit.

It's not 'sovereign', the architecture is not designed in Japan, the silicon is not fabbed in Japan. This whole thing is sideways.