Japan has set a target to boost its chip production eightfold by 2040 as it tries to catch up with global rivals and capitalise on the AI boom.
The country was a global leader in semiconductor production in the 1980s, capturing more than half of the market by the end of the decade. To counter this, the US instituted the US-Japan Semiconductor Agreement in 1986, which contained anti-dumping provisions and other measures to try and strengthen its domestic producers. After Japan failed to stick to the agreement, 100% tariffs were imposed on all electronics being made in the country the following year. This encouraged technology firms to look abroad for their chip supply, especially Taiwan, which was on the ascendancy in the sector after the founding of TSMC in 1987. Japan is now about a decade behind technology leaders in South Korea, Taiwan and the US.
Today, Japan holds less than 10% of the global chip market, but the government plans to invest heavily in new factories in a bid to reinvigorate...