METI Outlines Japan Manufacturing Strategy for Geopolitics

Tokyo, Japan — The Ministry of Economy, Trade and Industry (METI) released an interim report on April 15, 2026, outlining measures to reinforce Japan’s manufacturing base in response to supply chain vulnerabilities and rising geopolitical risks.

The report highlights Japan’s heavy dependence on certain countries for key materials. Over 60% of Japanese companies source raw materials and components from China, with about 20% relying exclusively on Chinese suppliers.

In legacy semiconductor manufacturing for the first quarter of 2024, China held the largest share at 39.3%, followed by Taiwan (23.8%), Japan (10.5%), and the United States (7.5%).

METI detailed recent Chinese export controls: restrictions on gallium and germanium in August 2023, on graphite in December 2023, on antimony in September 2024, and on seven heavy rare-earth elements in April 2025. 

Additional controls on dual-use items bound for Japan were announced in January and February 2026.

To mitigate these risks, METI proposes expanding state support beyond narrowly defined critical materials to cover essential chemicals and foundational technology sectors, including casting and forging. 

The report also emphasizes the need to secure components for emerging technologies, such as actuators and sensors for humanoid robots, and lasers for quantum computing.

The government aims to accelerate “Manufacturing AX” (AI Transformation) through the Generative AI Accelerator Challenge (GENIAC), which provides subsidies for developing AI models and constructing datasets.

For small- and mid-sized businesses, METI cited the “10 Billion Declaration” initiative, launched in May 2025, which supports firms aiming to reach JPY 10 billion in sales. 

As of the report’s release, around 3,000 companies had participated, with manufacturers comprising 40.8% of declarations.