Japan raises chip ambitions with ¥40 trillion sales goal

Japan has set a long-term goal to lift annual chip sales to JPY40 trillion (about $252 billion) by 2040, more than eight times its 2020 level and well above a previous JPY15 trillion target for 2030, Nikkei Asia reported. The government wants to cut reliance on imported semiconductors and ride growing demand for processors used in AI-heavy data centres, industrial machinery and what it calls the “physical AI” market—hardware in robots, self-driving cars and drones—where it aims for a 30 per cent global share.

Tokyo is backing the push with large public spending. In 2024 it launched a JPY10 trillion subsidy and incentive package to support mass production of advanced AI chips and hopes to draw over JPY50 trillion in public-private investment in the next decade. It has approved JPY732 billion in subsidies for Taiwan-based TSMC’s second plant in Japan, part of a planned JPY2.6 trillion investment to make 3nm chips, and is also funding local start-up Rapidus with JPY1.7 trillion to build domestic advanced manufacturing capacity.