Japan Re-Industrialises Semiconductors with Massive State Backing and Global Partnerships
What
Japan was once the global leader in semiconductors, holding over 50% of global market share in 1988, but this declined to around 10% by 2019. While Japan lost ground in logic semiconductors and advanced chip design, it has retained global leadership in semiconductor manufacturing equipment, materials, components, and precision production technologies, where Japanese companies still command 40–60% global market share in several key segments.
Since 2021, Japan has launched an unprecedented semiconductor re-industrialisation programme, driven by economic security, supply-chain resilience, and geopolitical risk. The Japanese government has committed over JPY 3.9 trillion (≈ EUR 24–26 billion) in direct subsidies and support measures for semiconductor manufacturing, R&D, and ecosystem development through the late 2020s.
A cornerstone of this strategy is Rapidus, Japan’s new advanced logic foundry backed by METI and eight major Japanese corporations. Rapidus aims to establish 2-nanometer logic mass production by 2027, a highly ambitious timeline.
- The Chitose fab (Hokkaido) began construction in 2023, with pilot production planned for 2026.
- Government support for Rapidus alone exceeds JPY 1.7 trillion, covering fab construction, equipment, and R&D.
- Rapidus is working closely with IBM (2nm process development) and is actively seeking international suppliers of advanced equipment, materials, metrology, automation, digital manufacturing, and yield-enhancement solutions.
In parallel, TSMC has made Japan a key overseas manufacturing base:
- The Kumamoto fab began mass production in late 2024, focused on 12–28nm logic, serving automotive and industrial customers.
- A second phase, announced in 2024, represents an additional USD 20+ billion investment, with production targeted for 2027–2028, introducing more advanced nodes.
- Combined public support for TSMC-related projects exceeds JPY 1.2 trillion, involving both national and prefectural funding.
- The Kumamoto cluster already hosts over 100 supplier investments, creating immediate opportunities for European technology providers.
Beyond Rapidus and TSMC, Japan is strengthening the entire semiconductor value chain, including:
- Advanced packaging and chiplet technologies
- Power semiconductors (SiC, GaN) for EVs and energy systems
- Manufacturing equipment, process control, materials, chemicals, and cleanroom solutions
- Digitalisation of fabs, including AI-driven yield optimisation, energy efficiency, and automation
Japan’s approach is explicitly international and partnership-based. Policymakers and industry leaders recognise that success depends on global collaboration, particularly in areas where Sweden and Europe are strong:
- Advanced production equipment and subsystems
- Materials science and specialty chemicals
- Industrial software, automation, AI, and sustainability solutions
- Precision engineering and reliability-critical components
How
As multiple fabs move from planning → construction → pilot → production (2026–2030), Japanese players are actively engaging non-Japanese suppliers and technology partners, often earlier in the process than in the past.
Opportunities for Swedish companies typically take three forms:
- Direct supplier relationships with Rapidus, TSMC/JASM, and Tier-1 Japanese equipment makers
- Joint R&D and co-development, often supported by Japanese public funding
- Local presence or partnerships to support long-term supply, service, and qualification requirements
Business Sweden supports Swedish companies through:
- Stakeholder access to fab operators, OEMs, and policymakers
- Market entry and positioning in Japan’s semiconductor ecosystem
- Targeted delegations, site visits, and B2B matchmaking
- Strategic advice on timing, localisation, and partnership models
Engage with Business Sweden and the Swedish Semiconductor Alliance to explore concrete opportunities, identify the right entry points, and connect with decision-makers across Japan’s rapidly expanding semiconductor ecosystem.
Contact us
For more information contact Carl Lindwall at carl.lindwall@business-sweden.se