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By AFP Published on: March 11, 2026 07:31 (EAT)

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CPU (central processing unit) production line, illustration. (Photo by RUSLANAS BARANAUSKAS/SCIENCE PHO / RBU / Science Photo Library via AFP)

Japan has set a new sales target for domestically produced microchips, with the country aiming for an eightfold increase by 2040 compared with 2020 levels.

In its 1980s heyday, the Asian country boasted around half the share of the global semiconductor market, the government says.

It has since been overtaken by Taiwan and other countries, with development of the Japanese chip industry hampered by slow digitisation among businesses and trade frictions with the United States.

Japan currently holds less than 10 percent of the global chip market — but the government is investing heavily in new factories in a bid to change that.

In a strategy meeting on Tuesday, Prime Minister Takaichi Sanae’s administration said it aims to boost sales of Japan-made chips to 15 trillion yen ($95 billion) by 2030, and 40 trillion yen ($250 billion) by 2040.

The 2040 target compares with sales of around five trillion yen in 2020, according to figures from the ministry of economy, trade and industry.

The computing power of chips has increased dramatically as makers cram them with more microscopic electronic components.

That has brought huge technological leaps to everything from smartphones to cars, as well as the advent of artificial intelligence tools such as ChatGPT.

So Japan wants a piece of the action, with the government saying it expects the global semiconductor market to grow to 190 trillion yen ($1.2 trillion) by 2035.

Newly founded Japanese chipmaker Rapidus is building a plant in the country to make cutting-edge “two-nanometre” chips, with mass production slated for 2027.

And Taiwan’s TSMC, the world’s biggest contract chipmaker, said last month that it will produce advanced three-nanometre semiconductors at a factory currently under construction in Japan.

Globally so far, logic and memory chips — the “brain” and “data storage” of AI — have driven market expansion, the Japanese government said in a document titled “draft investment roadmap”.

But “Japan has been unable to take advantage of this growth sufficiently”, it said.

“We will secure the capacity to domestically develop and produce cutting-edge, next-generation semiconductors that will be crucial to this AI era,” it said.Japan has set a new sales target for domestically produced microchips, with the country aiming for an eightfold increase by 2040 compared with 2020 levels.

In its 1980s heyday, the Asian country boasted around half the share of the global semiconductor market, the government says.

It has since been overtaken by Taiwan and other countries, with development of the Japanese chip industry hampered by slow digitisation among businesses and trade frictions with the United States.

Japan currently holds less than 10 percent of the global chip market — but the government is investing heavily in new factories in a bid to change that.

In a strategy meeting on Tuesday, Prime Minister Takaichi Sanae’s administration said it aims to boost sales of Japan-made chips to 15 trillion yen ($95 billion) by 2030, and 40 trillion yen ($250 billion) by 2040.

The 2040 target compares with sales of around five trillion yen in 2020, according to figures from the ministry of economy, trade and industry.

The computing power of chips has increased dramatically as makers cram them with more microscopic electronic components.

That has brought huge technological leaps to everything from smartphones to cars, as well as the advent of artificial intelligence tools such as ChatGPT.

So Japan wants a piece of the action, with the government saying it expects the global semiconductor market to grow to 190 trillion yen ($1.2 trillion) by 2035.

Newly founded Japanese chipmaker Rapidus is building a plant in the country to make cutting-edge “two-nanometre” chips, with mass production slated for 2027.

And Taiwan’s TSMC, the world’s biggest contract chipmaker, said last month that it will produce advanced three-nanometre semiconductors at a factory currently under construction in Japan.

Globally so far, logic and memory chips — the “brain” and “data storage” of AI — have driven market expansion, the Japanese government said in a document titled “draft investment roadmap”.

But “Japan has been unable to take advantage of this growth sufficiently”, it said.

“We will secure the capacity to domestically develop and produce cutting-edge, next-generation semiconductors that will be crucial to this AI era,” it said.

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