Japan has announced an ambitious plan to dramatically increase the production and sales of domestically manufactured semiconductors, aiming to reclaim a stronger position in the global technology supply chain. The government has set a target to boost chip sales eightfold by 2040 compared with 2020 levels, reflecting a renewed national strategy to rebuild its once-dominant semiconductor sector.
During a strategy meeting held Tuesday, the administration of Prime Minister Sanae Takaichi outlined plans to increase annual sales of Japanese-made semiconductors to 15 trillion yen (approximately $95 billion) by 2030 and to 40 trillion yen (about $250 billion) by 2040. These targets represent a significant rise from roughly five trillion yen in sales recorded in 2020, according to figures from Japan’s Ministry of Economy, Trade and Industry.
Japan was once a global powerhouse in semiconductor manufacturing. In the 1980s, the country controlled nearly half of the world’s semiconductor market. However, the sector gradually lost ground to competitors such as Taiwan Semiconductor Manufacturing Company and other emerging technology hubs. Analysts attribute the decline to factors including slower digital transformation among Japanese corporations and historical trade tensions with the United States.
Today, Japan accounts for less than 10 percent of the global semiconductor market. To reverse this trend, the government has begun investing heavily in domestic chip production facilities and strategic partnerships with leading manufacturers.
One of the most significant developments is the emergence of Rapidus, a newly established Japanese semiconductor company tasked with producing next-generation chips. The firm is constructing a manufacturing facility capable of producing cutting-edge two-nanometre semiconductors, with mass production expected to begin in 2027.
At the same time, global industry leader Taiwan Semiconductor Manufacturing Company (TSMC) is also expanding its presence in Japan. The company recently confirmed that it will manufacture advanced three-nanometre chips at a new factory currently under construction in the country, further strengthening Japan’s semiconductor ecosystem.
Semiconductors have become one of the most strategically important technologies in the modern economy. These tiny components power everything from smartphones and automobiles to data centers and emerging artificial intelligence systems. Rapid advances in computing power driven by increasingly dense microelectronic circuitry have enabled technological breakthroughs across numerous industries.
The Japanese government estimates that the global semiconductor market could grow to 190 trillion yen (approximately $1.2 trillion) by 2035. Officials argue that securing domestic capabilities in advanced chip design and production is essential for economic security and technological leadership in the era of artificial intelligence.
According to a government document titled “Draft Investment Roadmap,” growth in the global semiconductor sector has largely been driven by logic chips and memory chips, which serve as the computational “brain” and data storage systems for modern digital technologies. However, the report acknowledges that Japan has not fully benefited from this expansion.
“We will secure the capacity to domestically develop and produce cutting-edge, next-generation semiconductors that will be crucial to this AI era,” the strategy document states.
With substantial government backing, international partnerships, and new manufacturing investments, Japan is attempting to reposition itself as a major player in the rapidly evolving global semiconductor industry. If successful, the initiative could significantly strengthen the country’s technological competitiveness and supply chain resilience in the decades ahead.
