Japan's Chip Industry Revival After Decades of US Pressure

Japan is preparing to revive the glory of its domestic chip industry. The Japanese government is targeting domestic semiconductor sales to surge fivefold by 2040, capitalising on the explosion of artificial intelligence technology.

In a growth investment strategy initiative launched by Prime Minister Sanae Takaichi, the government is targeting Japanese chip sales to reach 40 trillion yen annually by 2040. This figure represents a sharp increase from approximately 8 trillion yen currently.

The target also extends a previous goal of 15 trillion yen by 2030, as part of Japan’s ambition to regain dominance in the global semiconductor industry.

According to Reuters, the Japanese government views chips as a strategic sector for economic security and will therefore receive increased public investment support. The roadmap for industry development is currently being formulated and will be incorporated into next year’s national budget planning.

Japan’s Chip Glory Collapses Under US Pressure

This move also represents Japan’s effort to catch up after being sidelined from the competition. In the 1980s, Japan was the world’s chip king, controlling approximately 50% of the market share.

However, trade tensions with the United States and the weakening of the domestic electronics industry caused its dominance to collapse in the following decade. Currently, Japan controls less than 10% of the global chip market share.

With the development of AI now driving rapid growth in the design and production of advanced chips, the government believes Japan must position itself to seize the opportunities for expansion.