Japan targets massive semiconductor growth to lead AI era

TOKYO (Web Desk): Japan has set an ambitious target to significantly boost sales of domestically produced microchips, aiming for an eightfold increase by 2040 compared with 2020 levels.

During a strategy meeting led by Prime Minister Sanae Takaichi, the government announced plans to increase sales of Japan-made semiconductors to 15 trillion yen (about $95 billion) by 2030 and 40 trillion yen (about $250 billion) by 2040.

According to the Ministry of Economy, Trade and Industry, semiconductor sales in Japan were around five trillion yen in 2020, meaning the 2040 target represents an eightfold rise.

In the 1980s, Japan held nearly half of the global semiconductor market. However, its share has since fallen to less than 10 percent, as countries like Taiwan and others overtook it in chip manufacturing.

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To revive the sector, Japan is investing heavily in advanced chip factories. Newly established chipmaker Rapidus is building a facility to produce cutting-edge two-nanometre chips, with mass production planned for 2027.

Meanwhile, Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, is also constructing a factory in Japan to produce advanced three-nanometre semiconductors.

The government expects the global semiconductor market to reach 190 trillion yen ($1.2 trillion) by 2035, driven by demand for logic and memory chips used in technologies such as artificial intelligence tools like ChatGPT.

Officials say strengthening domestic semiconductor production will ensure Japan can develop and manufacture next-generation chips crucial for the growing AI era.