By Andrew Kariuki
Japan has unveiled an ambitious plan to dramatically expand its domestic semiconductor industry, setting a target to increase sales of locally produced microchips eightfold by 2040 compared with 2020 levels.
During a strategy meeting on Tuesday, the administration of Prime Minister Sanae Takaichi announced that the government aims to boost sales of Japanese-made chips to 15 trillion yen (about $95 billion) by 2030 and 40 trillion yen (around $250 billion) by 2040.
The 2040 target represents a sharp increase from approximately five trillion yen recorded in 2020, according to figures from the Ministry of Economy, Trade and Industry.
Japan was once a dominant force in the global semiconductor industry.
In the 1980s, the country accounted for roughly half of the global semiconductor market share.
However, Japan has since been overtaken by competitors such as Taiwan and South Korea, with the growth of its chip industry slowed by factors including slow digital transformation among businesses and trade tensions with the United States.
Today, Japan holds less than 10 percent of the global semiconductor market, prompting the government to invest heavily in new manufacturing facilities and technological development in an effort to regain competitiveness.
The renewed push comes as demand for advanced chips continues to surge globally, driven by rapid developments in technologies such as artificial intelligence, smartphones, electric vehicles and high-performance computing.
Japan expects the global semiconductor market to expand to 190 trillion yen (about $1.2 trillion) by 2035, making the sector increasingly strategic for economic growth and technological leadership.
As part of its revival strategy, Rapidus, a newly established Japanese semiconductor company, is constructing a facility aimed at producing cutting-edge two-nanometre chips, with mass production scheduled to begin in 2027.
At the same time, Taiwan Semiconductor Manufacturing Company (TSMC)—the world’s largest contract chipmaker—recently announced plans to manufacture advanced three-nanometre semiconductors at a factory currently under construction in Japan.
Government officials say logic and memory chips, often described as the “brain” and “data storage” of artificial intelligence systems, have been key drivers of recent expansion in the global semiconductor market.
However, according to a government document titled “Draft Investment Roadmap,” Japan has not fully benefited from this growth.
“We will secure the capacity to domestically develop and produce cutting-edge, next-generation semiconductors that will be crucial to this AI era,” the government stated.
The strategy reflects Tokyo’s broader effort to strengthen technological independence, supply chain security and economic resilience as global competition in the semiconductor sector intensifies.
