Japan’s semiconductor industry is experiencing a remarkable boom, with sales of chip manufacturing equipment reaching record highs in 2024, driven by strong domestic and international demand. This success is further bolstered by strategic partnerships and government initiatives aimed at solidifying Japan’s position as a global semiconductor powerhouse.
Record-Breaking Sales and Global Market Share
As reported by the Semiconductor Equipment Association of Japan (SEAJ), Japan’s chip equipment sales for the January-August 2024 period reached an all-time high of ¥2.831 trillion, marking a 17.3% year-on-year increase. August sales alone jumped 20%, reaching the fifth-highest level on record. This impressive growth underscores the robust demand for Japanese semiconductor equipment, both domestically and internationally.
Japan currently holds a 30% share of the global market for semiconductor equipment sales, second only to the U.S., highlighting its crucial role in the global semiconductor supply chain.
Strategic Partnerships and Domestic Initiatives
Japan’s success in the semiconductor sector is further fueled by strategic partnerships and domestic initiatives. The Japanese national research institute is teaming up with U.S. chipmaker Intel to build a research and development center in Japan for cutting-edge semiconductor manufacturing technology. This collaboration aims to strengthen Japan’s expertise in chip manufacturing and foster innovation in the field.
Moreover, leading Japanese chip equipment producers are actively seeking to diversify their sales channels into countries like India, recognizing the potential for long-term growth amidst the risk of escalating tensions between Beijing and Washington. The Semiconductor Equipment Association of Japan predicts a 15% increase in Japanese chip equipment sales in 2024, with continued double-digit growth expected in the coming years.
Taiwan Seeks Closer Collaboration with Japan
Taiwan, another major player in the semiconductor industry, is also keen on strengthening its ties with Japan. Economic Affairs Minister Kuo Jyh-huei recently visited Japan and called for enhanced cooperation between the two countries in the semiconductor sector. Kuo emphasized the opportunities for furthering the economic and trade partnership between Taiwan and Japan, particularly in light of the expected boom in AI applications and the growing demand for AI servers and semiconductors.
Challenges and Future Outlook
Despite the positive outlook, challenges remain. Concerns persist about potential competition from Chinese rivals and the need for continued technological innovation to maintain Japan’s leadership position. Moreover, the ongoing geopolitical tensions and supply chain disruptions pose potential risks to the industry’s growth trajectory.
Nevertheless, Japan’s semiconductor industry is well-positioned for continued success, thanks to its strong domestic capabilities, strategic partnerships, and proactive government support. The country’s focus on innovation, diversification, and collaboration is expected to drive further growth and solidify its position as a key player in the global semiconductor landscape. As Toshiki Kawai, CEO of Tokyo Electron, aptly stated, “The global market for semiconductors is growing, and demand for equipment will grow if chipmakers accelerate efforts to diversify production beyond China and Taiwan.”
Thousands of senior engineers and procurement professionals subscribe to our LinkedIn Market Intel newsletter – get yours here
For more help with looking at supply chain options, contact Astute Electronics
