Japan's Semiconductor Manufacturing Equipment Sector Reaches Historic Milestone in FY2026

The Semiconductor Equipment Association of Japan (SEAJ) announced on January 15, 2026, that sales of Japanese-made semiconductor manufacturing equipment are forecast to reach ¥5.5004 trillion (approximately $38 billion) in fiscal year 2026, representing a 12% year-over-year increase. This marks the first time in industry history that sales will exceed the ¥5 trillion threshold, signaling a new era of growth for Japan's semiconductor equipment sector.

SEAJ Chairman Toshiki Kawai, who also serves as President of Tokyo Electron, expressed strong confidence in the industry's future, stating at a press conference: "In the front-end equipment (WFE) market, the proportion of advanced products is increasing. There is a high possibility that the global market share of Japanese-made equipment will grow."

AI Revolution Drives Semiconductor Investment Surge

The primary catalyst behind this historic achievement is the explosive growth in demand for AI-related semiconductors. The widespread adoption of generative AI, exemplified by ChatGPT, has accelerated investment in advanced semiconductors for data centers worldwide.

Key growth areas include:

  • Advanced Logic Semiconductors: Investment in 2-nanometer generation semiconductors used for manufacturing AI server GPUs and AI chips is expected to accelerate from FY2026
  • HBM (High Bandwidth Memory): This high-speed memory essential for AI processing is seeing capacity expansion from major DRAM manufacturers
  • Advanced Packaging Technologies: Demand for technologies that integrate multiple chips is surging

Chairman Kawai emphasized, "We have now entered the AI era. Looking further ahead, ICT industries will continue to grow through quantum computing, robotics applications, and more," highlighting the long-term growth trajectory for the semiconductor equipment industry.

Three Consecutive Years of Growth, Maintaining ¥5 Trillion Level Through FY2027

According to SEAJ's forecast, sales of Japanese-made semiconductor manufacturing equipment are expected to exceed the previous year for three consecutive years.

Fiscal Year Sales Forecast YoY Change
FY2025 ¥4.9111 trillion +3%
FY2026 ¥5.5004 trillion +12%
FY2027 ¥5.6104 trillion +2%

With AI-related demand expected to remain elevated in FY2027, sales are projected to stay above the ¥5 trillion mark for a second consecutive year.

Japan's Strengths: Dominant Market Share in Cleaning and Inspection Equipment

Japanese companies hold world-leading positions in specific segments of the semiconductor manufacturing equipment market. In areas such as single-wafer cleaning equipment, critical dimension scanning electron microscopes (CD-SEM), and batch-type cleaning equipment, Japanese companies command 60-80% of the global market.

Six Japanese companies rank among the world's top 15 semiconductor equipment manufacturers, with Tokyo Electron holding the fourth-largest sales globally. Other Japanese companies in the top rankings include Advantest, SCREEN, Disco, Daifuku, and Hitachi High-Tech.

In 2024, as semiconductor capital expenditure in China expanded beyond expectations, Japanese equipment manufacturers outperformed the market average. Tokyo Electron grew 27%, Advantest 37%, and SCREEN 33%, demonstrating significant business expansion.

Domestic Market Also Growing: Rapidus and TSMC Investments Provide Tailwinds

The Japanese domestic semiconductor manufacturing equipment market is also projected for steady growth, expected to reach ¥1.5185 trillion in FY2027, up 10% from the previous year. This growth is driven by anticipated investments from major foundries and production investments in 2-nanometer process technology.

The Japanese government has strengthened its support for the semiconductor industry, investing approximately ¥4 trillion over three years from FY2021 to FY2023. This includes support for Rapidus Corporation, which aims to develop next-generation domestic semiconductor production, and Taiwan's TSMC, which has established operations in Kumamoto Prefecture.

Global Market Trends: Heading Toward a $1 Trillion Market by 2030

According to the World Semiconductor Trade Statistics (WSTS), the global semiconductor market is forecast to reach a record $772.2 billion in 2025, up 22.5% year-over-year. The market is projected to reach $1 trillion by 2030, driving corresponding medium to long-term growth in the semiconductor equipment market.

SEMI, the global industry association for electronics manufacturing and design supply chain, projects that worldwide semiconductor manufacturing equipment sales will reach a record $156 billion in 2027. This growth will be driven by AI-related investments, with continuing demand for advanced logic, memory, and advanced packaging technologies.

Challenges and Future Outlook: Innovation and Global Competition

Despite these positive trends, challenges remain for Japan's semiconductor equipment industry. In the lithography equipment segment, the Netherlands-based ASML holds an overwhelming market share in EUV (extreme ultraviolet) lithography equipment, while Japanese companies Nikon and Canon face significant competitive pressure.

However, the expanding demand for advanced semiconductors driven by AI adoption represents a major opportunity for Japanese companies. In particular, there are numerous areas where Japanese companies can leverage their strengths in miniaturization technologies for 2-nanometer and beyond, as well as 3D packaging technologies such as chiplets.

Japan's semiconductor equipment industry is expected to enhance its global presence through continued investment in technological innovation and close collaboration with semiconductor manufacturer customers.

What is the situation for the semiconductor industry and equipment manufacturers in your country? We'd love to hear about trends among semiconductor-related companies and government support policies in your region!

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