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The Semiconductor Equipment Association of Japan said that sales of Japanese chipmaking tools are anticipated to grow 15% in the year to March 2025, driven by an AI-boosted recovery in spending on memory capacity, Bloomberg News reported.
The industry group raised its annual guidance to ¥4.25T ($26B), from a prior outlook of ¥4.03T, the report added.
Increased investment by logic foundries is anticipated to boost sales by an additional 10% in the year to March 2026 to ¥4.68T. The sales are expected to grow even more to ¥5.15T in the year ending March 2027.
A rising demand for AI-enabling chips and data centers is expanding chip investment.
Memory chipmaker SK Hynix intends to invest $75B through 2028, mainly to meet demand for high-bandwidth memory, or HBM, to support Nvidia’s AI accelerators. The market for HBM is led by South Korean companies SK Hynix and Samsung (OTCPK:SSNLF), and to a lesser extent by American chipmaker Micron (MU).
AI-related investment and a spur in spending in China was the reason for increase in guidance, Tokyo Electron President and SEAJ Chairman Toshiki Kawai told reporters, as per the report.
The U.S., China, the EU, South Korea, and Japan are among the countries and regions which have stepped up efforts to boost domestic chip manufacturing to stay ahead in the AI race.
In April, it was reported that Japan approved about ¥590B ($3.9B) in subsidies to domestic chip company Rapidus, as part of the country’s efforts to boost semiconductor manufacturing. The Asian nation has pledged billions of dollars for Taiwan Semiconductor Manufacturing’s (TSM) first factory in Kumamoto, Japan, and also to Micron’s expansion at its facility in Hiroshima to manufacture advanced DRAM.
The U.S. and its allies including the Netherlands, Germany, South Korea and Japan have been tightening curbs on China’s access to advanced semiconductor technology. China has set up a 344B yuan ($47.5B) investment fund to boost its semiconductor industry.