Market Size of Japan Integrated Circuit (IC) Industry
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2019 - 2022 |
| CAGR | 7.56 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
Japan Integrated Circuit (IC) Market Analysis
The Japan Integrated Circuit (IC) Market was valued at USD 36.04 billion in the previous year. It is expected to register a CAGR of 7.56%, reaching USD 51.67 billion over the forecast period. An integrated circuit (IC) refers to a small semiconductor-based electronic device consisting of fabricated transistors, resistors and capacitors. ICs are the building blocks of most electronic devices and equipment.
The introduction and adoption of emerging technologies such as the Internet of Things (IoT) are expected to propel the market growth. For instance, as per the findings of a survey by Microsoft published in February 2022, in Japan, there are more IoT projects in the usage stage (26%) in the manufacturing sector than in other sectors, mainly focused on bolstering automation. With the growing proliferation of IoT, the number of connected devices will grow significantly in the coming years. These devices will need ICs with embedded technology to communicate, sense, or interact with the environment.
Further, according to Japan Automobile Importers Association, the number of imported electric vehicles sold in the country during 2022 rose 65% from a year earlier to reach a record 16,464 units. The electrification of vehicles and automation of industrial equipment in the country stimulate demand for analog ICs that can maintain high reliability over the long term in low- and high-temperature environments.
Moreover, Japan's government is offering financial aid to encourage foreign chip makers to build plants in Japan, which provides a strong impetus to the market growth. For instance, in June 2022, Japan's Ministry of Economy, Trade and Industry (METI) announced plans to offer subsidies worth up to JPY 476 billion (USD 3.5 billion) for a semiconductor plant being built in Kumamoto Prefecture by Taiwan Semiconductor Manufacturing Co. (TSMC), Sony Group and Denso. Total investment in the plant was expected to reach around USD 8.6 billion, with Japan's government supporting about 40% of the costs.
However, modern IC technology has many design challenges. There is significant variability in the manufacturing process for advanced technology nodes. The actual operation of many devices on advanced ICs also results in variability, which manifests as changes in operating voltage, operating temperature, and performance.
COVID-19 impacted the entire semiconductor industry in several ways. Firstly, it disrupted the supply chain both by complicating the shipping and transportation industry and by reducing access to labor. Secondly, the pandemic further accelerated the demand for integrated circuits by starting a new wave of digital transformation and remote work.
