Amazon Web Services (AWS) is to invest JPY2.26tn ($15.24bn) in its cloud computing infrastructure in Japan.

The investment, announced today (19 January), follows the JPY1.51tn ($10bn) already invested in cloud computing in Japan between 2011 and 2022. The new pledged investment will be used for expanding facilities in Tokyo and Osaka to meet growing customer demand.

Cloud computing has significantly grown in importance in recent years as the technology behind it allows enterprises to scale up their IT ecosystem. GlobalData experts estimate that, in 2021, total global spending by companies on private and hybrid cloud services, as well as cloud management platforms, reached $160.9bn. That number is set to reach $297.5bn by the end of 2026, growing at a CAGR of 13.1%.

AWS entered the market by selling excess compute and storage capacity from its e-commerce business, expanding rapidly in the public space as an Infrastructure-as-a-Service (IaaS) provider.

For Japan, news about AWS expansion in the country comes as officials in Tokyo are stepping up investment in the tech sector. In November 2023, the government allocated $13.3bn to bolster its domestic semiconductor sector. Around $5bn will go into a new chipmaking plant built by Taiwan Semiconductor Manufacturing Company (TSMC) in the Kumamoto prefecture.

In January this year, the company’s chairman said the new chipmaking plant will begin operations on 24 February.

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By GlobalData

In addition to foreign investment in the tech sector, Japanese companies are also ramping up production at home to match competition from abroad. This week, chipmaking equipment manufacturer Disco promised to invest $270m to build a cutting-edge plant in the Hiroshima region.

The plant will help with the output of wheels crucial in the dicing, grinding, and polishing of wafers (thin slices of semiconductor material).