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According to the World Semiconductor Trade Statistics (WSTS), global semiconductor sales are expected to reach $627.6 billion (approximately 4.5 trillion RMB) in 2024, a year-on-year increase of 19.1%. The organization predicts that the global semiconductor market valuation will reach approximately $697 billion (about 5 trillion RMB) in 2025.
Current State of Japan’s Semiconductor Industry
Statistics show that in 2024, the scale of Japan’s semiconductor market will reach $47.4 billion (approximately 339.7 billion RMB), a growth of 1.4% compared to 2023, accounting for 7.6% of the global market. Currently, Japan’s semiconductor industry layout is accelerating its shift towards the Asia-Pacific region.
In response to the changes in the global semiconductor industry landscape, the Japanese government is accelerating the enhancement of its semiconductor and digital industry competitiveness. The Ministry of Economy, Trade and Industry (METI) formulated the “Semiconductor and Digital Industry Strategy” in June 2021 and revised it in June 2023. This strategy aims to increase the domestic total sales of semiconductor-related companies in Japan from approximately 5 trillion yen (about 249.15 billion RMB) in 2020 to over 15 trillion yen (about 747.44 billion RMB) by 2030.
📈 To achieve this goal, the strategy outlines three main implementation paths:
â‘ Strengthening Semiconductor Production Foundations: Enhance domestic manufacturing capabilities;
â‘¡ International Cooperation and Localization: Master and localize next-generation semiconductor technologies;
â‘¢ Future Technology Research and Development: Promote breakthroughs in cutting-edge technologies.
Policy Support
The Japanese government is providing multi-layered policy support for the development of the semiconductor industry. In terms of fiscal measures, in addition to traditional subsidies and grants, the 2024 tax reform introduced the “Strategic Domestic Production Promotion Tax,” which lists semiconductors (including microcontrollers and analog chips), electric vehicles, and green steel as key support industries. This system provides a 10-year tax deduction based on production sales scale for high-cost domestic production projects to encourage investment in Japan.
In terms of policy innovation, the amendment to the “Information Processing Promotion Law” passed on April 25 opens new support channels, allowing the government to provide financial support to semiconductor companies through the Information Processing Promotion Agency (IPA). The Ministry of Economy, Trade and Industry has allocated 100 billion yen (approximately 4.96 billion RMB) in the 2025 budget for special funds, which is expected to form an investment scale of 200 billion yen (approximately 9.91 billion RMB) in conjunction with private capital, focusing on supporting semiconductor manufacturing company Rapidus in the development and production line construction of 2nm processes in Chitose City, Hokkaido, with a goal of achieving mass production by 2027.
Japan’s Semiconductor Strengths
The core competitiveness of Japan’s semiconductor industry is mainly reflected in the fields of semiconductor manufacturing equipment and semiconductor materials. With long-term technological accumulation and precision manufacturing capabilities, Japanese companies occupy a leading position globally in these two key areas.
In the global semiconductor manufacturing equipment market, Japanese companies hold an overall market share of 30%, particularly demonstrating significant competitiveness in high-precision equipment fields such as photolithography machines, etching equipment, thin film deposition, and inspection and measurement equipment. Companies like Nikon, Canon, Tokyo Electron, and Hitachi showcase outstanding technological advantages.
In the semiconductor materials sector, Japanese companies hold over 50% of the global market share, ranking first in the world. For example, in the silicon wafer market, Shin-Etsu Chemical and Sumco dominate the global high-end silicon wafer market, providing critical foundational materials for semiconductor chip manufacturing.
Export Performance
Statistics show that from January to May 2025, Japan’s semiconductor equipment sales reached 2,154.584 billion yen (approximately 106.7 billion RMB), a year-on-year increase of 20.5%, far exceeding the 1,788.033 billion yen (approximately 88.55 billion RMB) during the same period in 2024, setting a historical record.
Notably, China is the largest export market for Japanese semiconductor equipment. Data from the Japanese Ministry of Finance indicates that in 2024, the total export value of Japan’s semiconductors and related products was 6,075.57 billion yen (approximately 300.89 billion RMB), with exports to China reaching 1,312.97 billion yen (approximately 65.02 billion RMB), accounting for 21.6%. The cooperation between the semiconductor industries of China and Japan continues to expand, becoming a common economic growth point for both sides. China is not only a major export destination for Japanese semiconductor manufacturing equipment companies but also their most important source of revenue.
Future Outlook
As the global semiconductor industry enters a new growth cycle, Japanese companies will face significant development opportunities. On one hand, the explosive growth of generative AI technology will drive demand for high-performance computing chips, creating greater market space for Japan’s advantages in semiconductor materials and equipment; on the other hand, the continuous growth of chip demand in fields such as electric vehicles and industrial automation will also promote the expansion of the analog chip and power semiconductor markets, where Japan excels. At the same time, in the face of increasingly fierce global technological competition, international cooperation will become more important, and technological advancements will have a profound impact on the development of human society.