Japan unveils $2.3T investment plan for AI and semiconductors

Japan has never been shy about thinking big. But a $2.3 trillion investment plan, spanning 17 sectors and stretching to fiscal year 2040, is a different kind of ambition entirely.

On June 20, 2026, Prime Minister Sanae Takaichi unveiled a long-term economic growth strategy targeting 370 trillion yen in combined public and private investment by 2040. The plan covers artificial intelligence, semiconductor manufacturing, space development, shipbuilding, and critical minerals, among others.

The market noticed immediately. The Nikkei 225 briefly surpassed the 72,000 mark following the announcement, driven largely by AI-adjacent stocks including SoftBank and Tokyo Electron.

What the plan actually says

The semiconductor target alone tells most of the story. Japan currently generates around 8 trillion yen in annual domestic chip sales. The plan aims to push that figure to 40 trillion yen, roughly $254 billion, by 2040. That is a fivefold increase, which would require sustained policy support, private capital, and a significant reconfiguration of Japan’s manufacturing base.

On the AI infrastructure side, $65 billion has been earmarked specifically for physical buildout. Think data centers, power capacity, and the underlying hardware that makes large-scale AI deployment possible.

Who is behind the plan

Takaichi became Japan’s first female prime minister in October 2025. She was reappointed after the Liberal Democratic Party secured a decisive electoral victory in February 2026, giving her government the political runway to pursue long-horizon strategies without the short-term disruption of a leadership change.

This announcement also builds on prior moves. Japan has already deployed significant subsidies for semiconductor production in recent years, and has steadily increased public funding for AI research and development.

TSMC’s decision to build fabrication facilities in Kumamoto, backed partly by Japanese government subsidies, was an early signal of this direction. The new strategy suggests Tokyo intends to keep pulling on that thread, using public money to attract and anchor advanced manufacturing capacity domestically.

What investors should watch

SoftBank and Tokyo Electron are the two names that moved most visibly on the news. SoftBank has been aggressively repositioning around AI for several years, making it a natural beneficiary of any government-backed push to scale AI infrastructure. Tokyo Electron, as one of Japan’s most important semiconductor equipment manufacturers, sits directly in the path of the planned chip sales expansion.

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