Japan chip target ambitions reached a new scale on March 9, 2026, as the country outlined a long-term goal to achieve JPY40 trillion ($252.4 billion) in semiconductor sales by 2040, according to a report by Nikkei Asia.
The figure represents an eight-fold increase over chip sales recorded in 2020. Moreover, it significantly exceeds Japan’s previous target of JPY15 trillion by 2030, signaling a major escalation in the country’s industrial strategy.
AI Demand Drives the Strategy
The plan aims to capitalize on soaring demand for chips supporting artificial intelligence workloads in data centers and machinery. Japan’s government views this demand as a structural, long-term opportunity for domestic semiconductor producers.
A specific goal within the plan targets a 30 percent share of the global physical AI market. This segment covers technologies used by robots, autonomous vehicles, and drones.
Government Subsidies and Investment Packages
Japan’s government introduced a JPY10 trillion package of subsidies and incentives in 2024 to support mass production of advanced chips for AI applications. The government also aims to attract more than JPY50 trillion in public-private investment over the next ten years.
Furthermore, the government allocated JPY732 billion in subsidies for a second TSMC chipmaking facility. The Taiwan-based company committed last month to advancing its chipmaking plans in Japan, targeting an investment of up to JPY2.6 trillion to produce 3nm chips.
Japan Chip Target Backed by Local Startup Rapidus
In addition to attracting foreign chipmakers, Japan is backing local startup Rapidus with JPY1.7 trillion in government funding. Rapidus represents Japan’s domestic bet on developing advanced semiconductor manufacturing capabilities independently.
“Japan is also pushing to reduce its reliance on imported chips.”
Nikkei Asia, Report
Reducing Import Reliance and Future Outlook
Reducing dependence on imported chips is a parallel objective within the broader strategy. Japan’s approach combines foreign investment attraction, domestic startup support, and large-scale subsidy programs to rebuild its semiconductor industry.
Consequently, the combined public and private investment commitments position Japan as one of the most active governments globally in semiconductor industrial policy. The 2040 timeline gives the strategy a 14-year runway to deliver results against a backdrop of intensifying global chip competition.