Tokyo (TDI): Japan has announced a 10-trillion-yen ($65 billion) initiative to bolster its semiconductor and artificial intelligence (AI) sectors, aiming to reclaim its position as a global tech leader and address challenges posed by its ageing and shrinking population.
The massive package, expected to be approved by lawmakers this week, underscores Tokyo’s urgency in preparing for a volatile geopolitical landscape, particularly amid growing fears of a potential Chinese invasion of Taiwan – a critical hub for semiconductor manufacturing.
Experts, however, caution that Japan must overcome significant obstacles, including worker shortages and ensuring sufficient energy supply to power AI data centers and chip production.
Once a global powerhouse in tech hardware during the 1980s, Japan has lagged in the AI race.
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Recent years, however, have seen a resurgence of ambition. SoftBank, a major Japanese tech investor, and US computing giant Nvidia recently announced plans to establish an “AI grid” across Japan, following earlier investments by Microsoft and OpenAI.
The government’s funding will also support the homegrown Rapidus project, aimed at developing next-generation semiconductors.
Tokyo has already pledged 4 trillion yen in subsidies to triple domestic chip sales by 2030.
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Global semiconductor leaders are also expanding their footprint in Japan.
Taiwanese chip giant TSMC recently opened an $8.6 billion factory in southern Japan, with plans for a second facility to produce advanced chips.
These moves align with similar efforts in the United States, where the Biden administration has committed billions to support domestic chip manufacturing.
Japan’s Energy Challenges
One of Japan’s most pressing challenges is energy supply. The country remains heavily reliant on fossil fuel imports and is working to revive nuclear plants shut down after the 2011 Fukushima disaster.
Despite its challenges, Japan is positioning itself as a leader in AI governance.
Its copyright laws are among the most permissive globally for AI training on copyrighted data, even for commercial use, and the country has played a key role in shaping international AI regulations, including through initiatives launched at last year’s G7 summit in Hiroshima.
