Japan Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in japan, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
Select Country Guide
Critical and Emerging Technologies
Last published date:

Overview

Japan presents significant export opportunities for U.S. companies in critical and emerging technologies (CETs), driven by demographic shifts, the pursuit of economic security, and a strong government push for technological advancement and digitalization across industries. This favorable environment is bolstered by a robust U.S.-Japan technology partnership and a history of substantial trade in high-tech products. The Japanese government is channeling significant resources into CET development and adoption, with strategies for key areas such as semiconductors, artificial intelligence (AI), quantum, bioeconomy, and renewable energy. This top-down commitment signals clear areas of opportunity and potential for partnership with Japanese entities. U.S. technology firms are often viewed as “trusted partners,” a status that can be leveraged when approaching the Japanese market.

Leading Sub-sectors

  • Advanced Manufacturing & Robotics

  • Artificial Intelligence (AI)

  • Biotechnologies

  • Cybersecurity Technologies

  • Civil Nuclear Power

  • Quantum

Opportunities

U.S. firms should align their offerings with Japan’s national goals, such as widespread digitalization and economic security, demonstrating how their technologies address key challenges like labor shortages, enhancing supply chain resilience, improving healthcare for an aging population, or contributing to decarbonization.

Advanced Manufacturing & Robotics Opportunities

Japan’s manufacturing sector, contributing over 20% to its GDP, is undergoing a significant transformation, creating substantial opportunities for U.S. suppliers of advanced manufacturing technologies. Japanese manufacturers have demonstrated a strong appetite for digitalization, spending an estimated $12.9 billion on software alone in recent years. The overall Japan robotics market was valued at $2.8 billion in 2024 and is projected to reach $3.2 billion by 2033, though with a modest CAGR of 1.8%. However, the industrial robots segment within this, a traditional Japanese strength, was valued at $1.27 billion in 2024 and is forecast to grow at a more robust CAGR of 9.8% between 2025 and 2033. Notably, Japan was the second-largest industrial robot market in 2023, with 38% of all industrial robots operating worldwide originating from Japan.

The most significant driver for this evolution is Japan’s demographic crisis; an aging and shrinking workforce necessitates automation and robotics to maintain industrial productivity. Furthermore, advanced manufacturing technologies, including automation and smart systems, are crucial for increasing output, reducing energy consumption, and minimizing product defects.

While Japan manufactures many robots, there is strong demand for high-value U.S. components, specialized robotic systems, and sophisticated software for applications in packaging, transport, logistics, food processing, and pharmaceuticals. Collaborative robots (cobots), designed to work alongside humans, represent a particularly fast-growing segment. As Japanese manufacturers increasingly focus on smart factory implementation, opportunities abound for U.S. solutions in Industrial IoT, data analytics, AI in manufacturing, and systems integration. U.S. expertise in cutting-edge IT, including AI, IoT, and data science specialists, can help fill a critical skills gap in Japan. The push for more sophisticated manufacturing processes inherently drives demand for advanced and high-performance materials, an area of U.S. strength. Additionally, Japan’s ambitious Semiconductor Revitalization Strategy, which includes massive investment in domestic manufacturing of next-generation chips (2nm and beyond), advanced packaging technologies, and materials R&D, creates significant demand. U.S. companies are well-positioned to supply specialized manufacturing equipment, critical parts, and advanced raw materials essential for these efforts. U.S. firms can excel by supplying critical enabli

Artificial Intelligence (AI) Opportunities

Artificial Intelligence is at the forefront of Japan’s technological ambitions, viewed as a transformative force for its economy and society. The Japanese AI market is experiencing robust growth, valued at $6.6 billion in 2024 and projected to surge to $35.2 billion by 2033, demonstrating a strong compound annual growth rate (CAGR) of 20.4%. The Japanese government is backing this growth with significant financial commitments, including a planned investment of $65 billion in AI technology and microchips to spur innovation and economic development.

Similar to robotics, AI is considered crucial for maintaining and enhancing productivity in the face of Japan’s demographic challenges. Consequently, AI is finding increasing application across diverse sectors, including government (workforce optimization and data analytics), manufacturing (e.g., Toyota, Panasonic for design and process optimization), life sciences (e.g., Takeda for drug discovery and operational efficiency), energy (e.g., Eneos for automated plant operations), finance (e.g., Mizuho for internal process enhancement), retail (for personalization and supply chain management), and healthcare (for diagnostics and personalized treatment).

Given U.S. leadership in AI, there are significant opportunities for exporting sophisticated AI software, development platforms, and specialized AI applications. The establishment of a Tokyo office by OpenAI and Anthropic and Microsoft’s $2.9 billion investment in Japanese AI and cloud infrastructure are testaments to this potential. NVIDIA has also formed partnerships to build AI infrastructure in Japan. Japan’s AI strategy includes the development of dedicated AI chips to power these advanced systems, creating demand for U.S. expertise in chip design, advanced semiconductors, and the hardware infrastructure needed to run complex AI models. Japanese companies, while eager to adopt AI, often require expert guidance on implementation, scaling, and ensuring responsible AI practices. This is particularly relevant given Japan’s “lighter regulatory approach” to AI, which aims to foster innovation but may necessitate more industry self-regulation and expert advice. There is also strong interest in Japan for generative AI tools to boost productivity, assist in software development, and create new revenue streams across various industries. The opportunities extend beyond simply selling products; they encompass co-devel

Biotechnologies Opportunities

Japan’s biotechnology sector is poised for significant growth, driven by substantial government investment in research and innovation. The overall Japan Biotechnology Market was valued at $44.1 billion in 2022 and is projected to grow at a CAGR of 6.7% through 2030. Agricultural Biotechnology is forecast to grow from $18.1 billion in 2024 to $25.9 billion by 2030 (CAGR 5.9%); Precision Medicine is expected to expand from $3.3 billion in 2022 to $8.4 billion by 2030 (CAGR 12.2%); and Pharmaceutical Manufacturing is projected to increase from $34.7 billion in 2024 to $62.0 billion by 2033 (CAGR 6.64%). The Japanese government has an ambitious Bioeconomy Strategy aiming to create a bioeconomy market worth 100 trillion yen (approximately $680 billion) by 2030. This strategy prioritizes areas such as biomanufacturing, biopharmaceuticals, digital health, and sustainable primary production (agriculture, forestry, fisheries).

Japan’s rapidly aging demographic is a major driver for R&D in innovative medical treatments, regenerative medicine, advanced diagnostics, and digital health solutions to improve quality of life and manage healthcare costs. The government is actively fostering biotech innovation through organizations like the Japan Agency for Medical Research and Development (AMED), which runs programs such as the Strengthening Program for Pharmaceutical Startup Ecosystem. Regional initiatives such as the Greater Tokyo Biocommunity (GTB) also aim to create vibrant bio-innovation hubs. There is also a growing emphasis on leveraging biotechnology to enhance food security, develop climate-resilient crops through genome editing, and promote sustainable agricultural practices. U.S. biotech firms with innovative therapeutic candidates, platform technologies for drug discovery (especially for complex diseases), and expertise in areas like biopharmaceuticals and orphan drugs can find partners and markets in Japan.

Cross-border venture capital investment between U.S. and Japanese biotech sectors is increasing. As Japan aims to strengthen its domestic drug production capabilities for advanced biologics, cell therapies, and gene therapies, there is a need for U.S. technologies in bioprocess development, scalable manufacturing platforms (including continuous manufacturing), and contract development and manufacturing organization (CDMO) services. U.S. leadership in genomics, AI-driven diagnostics, personalized therapy development, and digital health platforms (including remote monitoring and data analytics) aligns well with Japan’s focus on advancing individualized healthcare. Opportunities also exist for U.S. companies offering advanced seeds, genome editing tools like CRISPR, biopesticides, biofertilizers, and other sustainable farming solutions to enhance crop yields and resilience.

Cybersecurity Technologies Opportunities

As Japan accelerates its digital transformation, the Japanese cybersecurity market is experiencing significant growth. It is forecasted that the market could grow from $18 billion in 2024 to $43.3 billion by 2033. Japan is facing an increasing frequency and sophistication of cyber threats, including state-sponsored attacks, ransomware, and phishing campaigns targeting critical infrastructure, financial institutions, and government entities. The widespread adoption of digital technologies across all sectors of the Japanese economy is expanding the potential attack surface, making organizations more vulnerable. The shift towards hybrid and remote work models has introduced new security challenges related to protecting remote endpoints, data, and access to corporate networks. U.S. companies offering cutting-edge solutions, including AI-driven security analytics, machine learning algorithms for threat detection, endpoint detection and response (EDR), security information and event management (SIEM), and proactive/active cyber defense technologies, are in high demand. With Japan’s government promoting a “cloud-first” policy and businesses increasingly adopting cloud services, there is a strong need for robust cloud security solutions. This includes securing multi-cloud and hybrid cloud environments, data protection, compliance management, and cloud access security brokers (CASBs). Advanced Identity and Access Management (IAM) solutions, such as multi-factor authentication (MFA), single sign-on (SSO), privileged access management (PAM), and biometric verification technologies, are crucial for securing access in complex digital environments. As Japan advances its “Connected Industries” and smart manufacturing initiatives, protecting industrial control systems from cyber threats becomes critical; U.S. firms specializing in OT/ICS security can offer valuable solutions. Given the complexity of the threat landscape and a recognized cybersecurity skills gap in Japan, there are significant opportunities for U.S.
 

Civil Nuclear Power Opportunities

In a country with extremely limited energy resources (Japan imports close to 90 percent of its energy), nuclear operators and the Government of Japan (GOJ) have been working since the Fukushima accident to promote the restart of nuclear power plants and revitalization of the country’s nuclear industry. Over the past two years, Japan’s energy usage forecasts have shifted from an expected decline due to an aging population to a predicted increase of 12 to 22 percent by fiscal year 2040 (compared to fiscal year 2023), due to the rapid increase of data centers and the construction of new semiconductor factories, reflecting the growing demand for cloud computing and the proliferation of artificial intelligence. Nuclear power usage is predicted to increase from 8.5 percent in fiscal year 2023 to approximately 20 percent by fiscal year 2040. Some operators, such as Tokyo Electric Power Company (TEPCO)’s President Kobayakawa, now believe that the potential for growth in domestic electricity demand is “close to the period of high economic growth” from 1960s &1970s Japan.

Japan’s national policy aims to increase energy security and reduce greenhouse gas emissions by 46% by fiscal 2030 (base 2013 levels) to achieve carbon neutrality by 2050. Nuclear energy is seen to provide several distinct advantages as a reliable, scalable, and carbon-free source of power that can complement Japan’s energy security goals. Increasing Japan’s nuclear output will require restarting reactors that have been shut down for over a decade, replacing old reactors that have been slated for decommissioning, and moving forward with the construction of new reactors with improved safety measures. The trend in favor of civil nuclear power may be observed in the following recent developments:

  • · The Governor in Niigata Prefecture is expected to approve the restart of the Unit Six Reactor (1.4 GW) at the TEPCO’s Kashiwazaki-Kariwa Nuclear Power Plant after the fall of 2025 (May 2025).

  • Tohoku Electric Power Company (EPC) resumed commercial operation of Unit Two Reactors (0.8 GW) at its Onagawa Nuclear Power Plant for the first time since the 2011 Fukushima earthquake and tsunami (December 2024).

  • The tsunami risk assessment for the restart of Chubu EPC’s Unit Three (1.1 GW) and Unit Four (1.14 GW) Reactors at Hamaoka Nuclear Power Plant, which had been a major hurdle for the restart, was approved by the NRA. After 10 years of review, the utility can now move on to the next stage of “safety measure for the facility” (November 2024).

  • The Kyushu EPC announced that it will consider the development and installation of next-generation innovative reactors in the Kyushu region in its management vision for 2035 (May 2025).

  • TEPCO announced that the amount of contaminated water generated at the Fukushima Daiichi Nuclear Power Plant in fiscal 2024 was reduced to 70 tons per day, a decrease of approximately 10 tons from the previous year.

  • The Nuclear Regulation Authority approved a preliminary report stating Hokkaido Electric Power’s Tomari No. 3 reactor meets post-Fukushima safety standards. Hokkaido Electric’s president said he expects the unit to restart in 2027.

Moving forward with restarts, rebuilds, and new construction will also require the decommissioning of aging nuclear power plants. A number of U.S. decommissioning companies have signed contracts or are currently in negotiations with Japan’s major nuclear engineering companies and electric power companies, which own and operate the country’s nuclear power plants. Furthermore, according to industry insiders, the market share of U.S.-made goods and services used in the Japanese nuclear sector well exceeds that of other non-Japanese products/services, making U.S. products/services indispensable to Japanese civil nuclear power companies.

Regarding next-generation nuclear technology, large advanced light water reactors (conventional types with added safety features) are the most likely to replace conventional large light water reactors. Small modular reactors (SMRs) and fusion reactors are garnering increasing attention and investment and are being examined by the GOJ and power companies.

Resources

Major Trade Shows and Conferences:

  • Advanced Manufacturing/Robotics: IIFES (Innovative Industry Fair for E x E Solutions) (Nov 19-21, 2025, Tokyo); JIMTOF (Japan International Machine Tool Fair) (Oct 26-31, 2026, Tokyo Big Sight).

  • AI: AI Expo Tokyo (Spring: May 22-24, 2025, Koto; Autumn); Japan DX Week (Nagoya: May 28-30, 2025 ); ad:tech tokyo (Oct 22-24, 2025, Tokyo).

  • Renewable Energy: Green Factory Expo (Osaka: May 14-16, 2025; Koto (Tokyo): Sep 17-19, 2025 ); PV EXPO (International Photovoltaic Power Generation Expo) (Chiba: Sep 17-19, 2025); International Wind Energy Expo (Chiba: Sep 17-19, 2025); Smart Energy Week Autumn (Chiba: Sep 17-19, 2025); International Smart Grid Expo (Chiba: Sep 17-19, 2025).

  • Biotechnology: BioJapan (Yokohama: Oct 8-10, 2025); healthTECH JAPAN (Yokohama: Oct 8-10, 2025 ).

Contact Us

For more information about Japan’s Automotive sector, please contact the U.S. Commercial Service, Japan at Office.Tokyo@trade.gov.