Japan has announced an ambitious plan to increase domestic microchip sales eightfold by 2040 compared to 2020 levels, marking a major state-backed effort to reclaim its shrinking share of the global semiconductor market.
The strategy sets specific targets of 15 trillion yen ($95 billion) in chip sales by 2030 and 40 trillion yen ($250 billion) by 2040. This compares with sales of approximately five trillion yen in 2020, as reported by Japan’s Ministry of Economy, Trade and Industry. The goals come as Japan’s market share has fallen from around 50% in the 1980s to less than 10% today, a decline attributed to slow corporate digitisation and past trade tensions with the United States.
The government is backing the push with heavy investment in new manufacturing facilities. A key player is Rapidus, a newly founded Japanese chipmaker developing advanced “two-nanometre” chips, with mass production scheduled for 2027. Additionally, Taiwan’s TSMC, the world’s largest contract chipmaker, is constructing a plant in Japan to produce cutting-edge three-nanometre semiconductors.
The initiative responds to a rapidly expanding global market. The Japanese government projects the worldwide semiconductor industry will grow to 190 trillion yen ($1.2 trillion) by 2035, driven by demand for logic and memory chips that power artificial intelligence and advanced computing. In a draft investment roadmap, the administration acknowledged Japan’s failure to sufficiently benefit from this growth, stating: “We will secure the capacity to domestically develop and produce cutting-edge, next-generation semiconductors that will be crucial to this AI era.”
The renewed focus aims to reverse decades of stagnation. By targeting the advanced nodes essential for AI tools like ChatGPT and next-generation electronics, Japan seeks to rebuild its technological leadership. The ambitious targets underscore the country’s determination to reduce reliance on foreign suppliers and secure a strategic position in the global supply chain.
Next steps will involve scaling up production at new facilities, fostering industry-academia collaboration, and supporting workforce development. Success will depend on execution speed and maintaining global partnerships, especially with allies like the United States, amid intensifying international competition for semiconductor dominance.
AFP
