Rapidus logo in Japan [Kyodo News]

The Japanese government, which is pushing to rebuild its semiconductor business, plans to increase domestic semiconductor sales to 40 trillion yen (approximately 376 trillion won) by 2040 to respond to the growing demand for artificial intelligence (AI) and data centers, Nikkei reported on the 8th.

The Japanese government intends to include these details in the draft "Crisis Management and Growth Investment" schedule to be released at the Japan Growth Strategy Meeting scheduled for the 10th.

Semiconductor-related sales produced in Japan were 5 trillion yen (approximately 47 trillion won) in 2020, and it was decided to expand this to over 15 trillion yen (approximately 141 trillion won) by 2030. Now, a sales target of 40 trillion yen for 2040 is to be presented.

Japan will particularly focus on supporting semiconductors that are the foundation of "Physical AI," which powers robots and machines with artificial intelligence, Nikkei reported.

Japan has strengths in Physical AI and plans to maintain its global market share in this field at over 30% by 2040, similar to the United States and China.

The Japanese government is also expected to include the phrase "develop cutting-edge semiconductor research and development and design bases" in the draft schedule to be released this time.

In this regard, Japan is also considering ways to supply semiconductors used in autonomous vehicles at low cost, and the draft will also include support for acquiring industrial land and developing infrastructure necessary for the construction and expansion of semiconductor factories.

Nikkei stated, "The Sanae Takaichi administration will present a semiconductor policy package looking towards 2040 to make it easier for companies to establish investment plans."

Rapidus, a semiconductor company funded by the Japanese government and companies, plans to start mass production of 2-nanometer (nm·1 billionth of a meter) products after October next year, and Taiwan's TSMC, the world's largest semiconductor contract manufacturer (foundry), is pushing to expand its factory in Kumamoto Prefecture, Kyushu.

Previously, the Japanese government decided to establish a plan to strengthen the AI and semiconductor industry base in November 2024 and provide over 10 trillion yen (approximately 94 trillion won) for seven years.

Meanwhile, the Japanese government plans to subdivide the 17 strategic areas designated as crisis management and growth investment targets and select 61 products and technologies.

Among these, 27 products and technologies, including Physical AI and semiconductors, as well as permanent magnets, gaming, and next-generation shipbuilding using ammonia and hydrogen as fuel, are planned to be proactively fostered.

In addition, areas such as quantum computer development, nuclear fusion power generation, and unmanned marine vehicles are also areas of interest for the Japanese government, Nikkei reported.