South Korean semiconductor and AI chip companies are making significant inroads into Japan, seeking to tap into one of the most promising system semiconductor markets in the world. Although South Korea's market penetration in this sector has historically remained low, Japan's current system chip market share is more than double that of Korea. For Korean fabless design firms and AI hardware startups, Japan is emerging as a critical battleground for overcoming domestic limitations and scaling internationally.
South Korea currently holds just 1% of the global IC design market and remains behind industry leaders such as TSMC in wafer foundry capacity. However, expansion into Japan is being viewed as a potential inflection point. In the first half of 2025, Korean IC design and semiconductor IP companies made notable progress in Japan.
Openedges Technology and SemiFive have secured deals with prominent Japanese clients. In June, Openedges announced a strategic collaboration with Renesas Electronics, a leading automotive chipmaker. Under the agreement, Renesas will license Openedges' memory subsystem IP to develop a high-speed, low-power data transfer platform for SoC applications—integrating CPU, GPU, and NPU cores. The deal underscores Japan's increasing reliance on advanced IP as it drives innovation in next-generation electronics.
Openedges also signed a partnership with a Japanese ASIC design house, which plans to use its IP for developing custom semiconductors for home appliances. These milestones come just a year after Openedges established a local subsidiary and R&D center in Japan in June 2024—highlighting the company's rapid traction in a traditionally closed market.
Meanwhile, SemiFive, a key design solutions partner for Samsung Electronics, is reportedly in the final stages of a deal with a Japanese IC design firm focused on AI chips. Although the details remain undisclosed, the move reflects growing Korean efforts to tap into Japan's rising demand for AI-driven semiconductor solutions.
Korean AI startup Rebellions is also seizing the momentum. Following investment from Japanese venture capital firm DG Daiwa Ventures in 2024, Rebellions officially opened its Tokyo office in March 2025. The company views the next two to three years as a critical window to establish itself as a leader in AI inference chips, driven by surging infrastructure needs spurred by Japan's AI growth.
In 2024, the Japanese government committed CNY 118 billion (approximately $806 million) to support domestic generative AI development and pledged CNY 10 trillion in AI and semiconductor investments by 2030. According to Statista, Japan's AI market is expected to grow from $10.15 billion in 2025 to over $41 billion by 2031—more than twice the projected size of South Korea's.
As of 2024, Japan held an 8% global share in the system semiconductor market, compared to Korea's 3%. Major Japanese electronics brands such as Sony, Nikon, Panasonic, and Seiko Epson are driving demand for advanced chips—especially in AI and smart electronics. While these firms have traditionally relied on TSMC and its ecosystem, collaboration with Korean chipmakers, including Samsung, is on the rise. This signals a deeper restructuring of the semiconductor supply chain across the region