Japan Quadruples AI and Semiconductor Funding to Compete with U.S. and China

Japan's Ministry of Economy, Trade and Industry (METI) has unveiled plans to nearly quadruple its budget for cutting-edge semiconductors and artificial intelligence development, allocating approximately ¥1.23 trillion ($7.9 billion) for the fiscal year starting April 2026. The MOVE signals a strategic push to bolster the nation's technological capabilities amid intensifying global competition.

The overall METI budget has surged by nearly 50% year-over-year, driven primarily by the dramatic increase in chips and AI spending. Prime Minister Sanae Takaichi's Cabinet has approved the proposal, though parliamentary debates on the initial budget plan are expected in the coming year.

This aggressive funding expansion reflects Japan's determination to close the gap with the U.S. and China in frontier technologies. The ministry aims to secure most of the additional funding through regular budgets from the outset, marking a departure from previous supplemental funding approaches.