The Ministry of Economy, Trade and Industry released a total FY2027 budget request of ¥7.7859 trillion. The request calls for approximately ¥1.4 trillion in investment in AI, semiconductors and robotics, while outlining plans to secure stable funding through structural transformation on an initial-budget basis.
On 31 August 2026, the Ministry of Economy, Trade and Industry released a total FY2027 budget request of ¥7.7859 trillion. The request includes approximately ¥1.4 trillion in priority investment in AI, semiconductors and robotics, and sets out a policy of securing a funding framework through the initial budget rather than relying on supplementary budgets.
Measures to secure computing resources include expanded subsidies and development support for domestic companies and research institutions using computing resources through GENIAC, the Generative AI Accelerator Challenge. Applications to multimodal foundation models and physical AI are expected to expand. This is expected to promote the use of industrial data and the integration of AI systems into operational settings.
Strengthening Japan’s domestic manufacturing base includes establishing mass-production capabilities for advanced semiconductors. Tax measures aimed at promoting investment in Rapidus in Hokkaido were included in the requests for tax reform. Mass production of back-end semiconductor technologies is expected to face challenges including substantial investment requirements and customer acquisition.
The request identifies electricity constraints at data centers and the need for a roadmap for introducing photonics-electronics convergence technologies. Demonstration projects involving optical chiplets and optical interconnects were positioned as foundational to next-generation data centers. Moving from the demonstration stage to commercialization is expected to require higher yields and the development of standards.