Japan’s Critical Role in Nvidia’s AI Chip Ecosystem and Semiconductor Comeback

Nvidia’s AI accelerators rely on TSMC’s advanced CoWoS packaging and high-bandwidth memory from SK hynix and Samsung. Although Japan lacks advanced logic-chip and HBM production capacity, companies including Tokyo Electron, Shin-Etsu Chemical and Ajinomoto dominate key equipment and materials. Japan holds more than 90% of the EUV photoresist market and over 95% of the ABF film market, positioning it to amplify its precision-manufacturing strengths amid the rise of edge AI and robotics.

In April 2026, the Japanese government granted Rapidus an additional 631.5 billion yen in subsidies, taking its pledged public funding above 2.35 trillion yen, or about $14.5 billion. The national chip champion, backed by Toyota, NTT, Sony, SoftBank and others, launched a pilot production line in Chitose, Hokkaido, in 2025. It is working with IBM to introduce 2-nanometer technology and aims to begin commercial mass production in 2027.