Japan Quantum Computing Market By Offering (Hardware, Software, Services), By Deployment (On-premises, Cloud), By Application (Optimization, Simulation, Machine Learning, Others), By End-User (Healthcare & Pharmaceuticals, Chemicals, Banking & Finance, Aerospace & Defense, Transportation & Logistics, Energy & Power, Academia, Government, Others), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033

Report Overview

The Japan Quantum Computing Market size is expected to be worth around USD 3,875.8 Million by 2033, from USD 197.1 Million in 2023, growing at a CAGR of 34.7% during the forecast period from 2024 to 2033.

The Japan Quantum Computing market represents a cutting-edge sector within the technology industry, focused on the development and application of quantum computers. Quantum computing is an innovative area of computing technology that makes use of the principles of quantum theory, which explains the behavior of energy and material on the atomic and subatomic levels. This allows quantum computers to process information at speeds and levels of complexity far beyond those of traditional computers.

In Japan, the emphasis on quantum computing has been growing, driven by both governmental and private sector investments. The nation aims to become a leader in the field, leveraging quantum computing to enhance capabilities in various areas including cryptography, drug discovery, and complex system simulation.

The Japanese government, along with leading tech companies, has been actively promoting research and development in quantum computing. This collaboration is aimed at establishing a robust ecosystem for quantum technology that includes not just the development of quantum computers but also the creation of algorithms and software to run on these advanced machines.

The market for quantum computing in Japan is projected to expand significantly. This growth can be attributed to increased investments, advancements in quantum technology, and a strong focus on research and innovation. The involvement of major Japanese corporations and research institutions plays a crucial role in accelerating the development and application of quantum computing technologies.

The Japanese government has announced a substantial investment of ~$31.7 million US (4.2 billion yen) to support the expansion of shared quantum computing through a cloud platform. The initiative, led by the University of Tokyo with support from the Ministry of Economy, Trade, and Industry, aims to introduce a 127-qubit model from IBM alongside the existing 27-qubit model. This investment is part of Japan’s broader strategy to enhance its cloud presence in quantum computing, identified as crucial for economic security.

Key Takeaways

• The Japan Quantum Computing Market is estimated to reach USD 3,875.8 Million by 2033, experiencing a robust Compound Annual Growth Rate (CAGR) of 34.7%.
• The Global Quantum Computing Market size is expected to be worth around USD 8,285.6 Million by 2033, from USD 719.3 Million in 2023, growing at a CAGR of 31.2% during the forecast period from 2024 to 2033.
• The Services segment holds a dominant position in the market, driven by the increasing demand for specialized quantum computing services such as consulting and system integration.
• Cloud-based deployment leads the market due to its flexibility, scalability, and reduced barrier to entry, aligning well with Japan’s rapid digital transformation initiatives.
• Optimization stands out as the dominant application segment, reflecting the growing recognition of quantum computing’s potential to revolutionize problem-solving methodologies.
• Leading companies such as Riken, Fujitsu Limited, Hitachi Ltd., and NEC Corporation are actively contributing to the development and growth of quantum computing technologies in Japan.

Offering Analysis

In 2023, the Services segment within the Japan Quantum Computing market held a dominant position, capturing a significant market share. This prominence can be attributed to the increasing demand for specialized quantum computing services, including consulting, system integration, and support and maintenance.

As organizations in Japan are progressively recognizing the transformative potential of quantum computing across various industries such as finance, pharmaceuticals, and automotive, the need for expert services to deploy, integrate, and maintain quantum computing systems has surged. This rise is further fueled by the complexity of quantum computing technology, which necessitates specialized knowledge for effective implementation and optimization.

Moreover, the Services segment is leading the quantum computing market in Japan due to the country’s robust emphasis on research and development in quantum technologies. The Japanese government and private sector’s significant investments in quantum computing research initiatives have led to collaborations with service providers, aiming to accelerate the practical application of quantum computing.

These strategic partnerships are vital for advancing quantum computing capabilities and are indicative of the segment’s pivotal role in the ecosystem. Service providers not only facilitate the adoption of quantum computing technology but also play a crucial role in educating and training the workforce, thereby ensuring that businesses can fully leverage the potential of quantum innovations.

The sustained growth of the Services segment is underpinned by the evolving needs of the market. As quantum computing continues to mature, the demand for comprehensive services that cover the entire lifecycle of quantum computing projects – from initial consulting and feasibility studies to post-implementation support – is expected to rise.

This trend is likely to continue, reinforcing the Services segment’s leading position in the Japan Quantum Computing market. The integration of quantum computing services into traditional IT environments presents a unique set of challenges and opportunities, further highlighting the importance of specialized service providers in facilitating the seamless transition towards quantum-enhanced processes

Deployment Analysis

In 2023, the Cloud segment held a dominant position in the Japan Quantum Computing Market, capturing a significant share of the market. This leadership can be attributed to several key factors that align with the technological advancements and operational demands within the region.

The cloud-based deployment of quantum computing resources offers unparalleled flexibility and scalability, which are essential for addressing the diverse and evolving computational needs of industries ranging from finance and pharmaceuticals to automotive and logistics. Additionally, the cloud model significantly reduces the barrier to entry for utilizing quantum computing technologies, as it eliminates the need for substantial upfront capital investment in quantum hardware and infrastructure.

The ascendancy of the Cloud segment over On-premises deployment is further reinforced by the rapid digital transformation initiatives across Japanese industries. Cloud-based quantum computing services facilitate easier access to quantum processors, quantum simulators, and quantum-inspired optimization algorithms via the internet, enabling businesses to experiment with quantum computing applications without the complexities of managing quantum hardware.

This ease of access is complemented by the pay-as-you-go pricing model, which aligns with the cost-efficiency objectives of many organizations, fostering broader adoption. Moreover, the strategic partnerships between Japanese technology firms and global quantum computing companies have played a pivotal role in enhancing the cloud quantum computing ecosystem within Japan.

These collaborations have led to the development of customized cloud-based quantum computing solutions tailored to the specific needs of the Japanese market, further driving the segment’s growth. The integration of quantum computing with cloud technologies is anticipated to accelerate innovation, optimize operations, and solve complex computational problems more efficiently, heralding a new era of computing capabilities for businesses in Japan.

Application Analysis

In 2023, the optimization segment held a dominant position in Japan’s quantum computing market, capturing more share. This prominence can be attributed to the increasing demand for optimization solutions across various industries, including logistics, finance, and manufacturing. Optimization in quantum computing significantly enhances the efficiency and speed of solving complex optimization problems compared to classical computing methods.

The segment’s leadership underscores the growing recognition of quantum computing’s potential to revolutionize problem-solving methodologies in sectors that require high levels of computational power for optimization tasks. The leading status of the optimization segment within Japan’s quantum computing market is further bolstered by the strategic investments and research initiatives undertaken by both public and private sectors.

These efforts aim to harness the advanced capabilities of quantum computers for optimizing supply chains, financial models, and manufacturing processes, thereby reducing costs and improving operational efficiencies. The integration of quantum computing into optimization tasks is seen as a key driver for innovation and competitiveness in the Japanese economy.

Furthermore, the development of quantum algorithms tailored for optimization problems has made this technology increasingly accessible and applicable across a broad range of industries, ensuring the segment’s continued growth and dominance in the market. The adoption of quantum computing for optimization purposes is also reflective of Japan’s forward-looking approach to technological innovation.

By leveraging quantum computing’s unparalleled processing power, businesses and research institutions are able to tackle challenges that were previously deemed insurmountable. This strategic emphasis on optimization applications is poised to position Japan as a global leader in the practical deployment of quantum computing technologies, highlighting the country’s commitment to advancing its technological infrastructure and enhancing its competitive edge on the international stage

End-User Analysis

In 2023, the healthcare & pharmaceuticals segment held a dominant market position in the Japan quantum computing market, capturing a significant share. This leadership can be attributed to the sector’s urgent need for sophisticated computational solutions to drive advancements in drug discovery, personalized medicine, and complex biological research.

Quantum computing offers unparalleled processing power, enabling researchers and practitioners to solve problems and analyze data at a speed and scale previously unimaginable. The rapid growth in this segment is further fueled by Japan’s commitment to healthcare innovation, supported by both public and private investments aimed at harnessing quantum technologies for groundbreaking medical breakthroughs.

Moreover, the quantum computing applications in healthcare and pharmaceuticals are vast and varied. They range from the development of new pharmaceutical compounds through quantum chemistry to the optimization of clinical trials and the personalization of healthcare treatments. The ability to quickly analyze and interpret vast datasets enables the identification of patterns and insights that can lead to the discovery of new drugs and therapies, significantly reducing time and costs associated with traditional research methods.

Key Market Segments

By Offering

• Hardware
• Software
• Services

By Deployment

• On-premises
• Cloud

By Application

• Optimization
• Simulation
• Machine Learning
• Others

By End-User

• Healthcare & Pharmaceuticals
• Chemicals
• Banking & Finance
• Aerospace & Defense
• Transportation & Logistics
• Energy & Power
• Academia
• Government
• Others

Driver

Accelerated Drug Discovery Processes

The application of quantum computing in the acceleration of drug discovery processes stands as a significant driver in the Japan quantum computing market, particularly within the healthcare & pharmaceuticals segment. Traditional computational methods are often limited by their ability to process complex molecular interactions at a quantum level, resulting in prolonged research timelines and increased costs.

Quantum computing, however, can model and simulate these interactions with unprecedented accuracy and speed, facilitating the rapid identification of viable drug candidates. This capability is critical in responding to global health challenges, including the expedited development of treatments for emerging diseases. The potential to significantly reduce the time and financial investment associated with drug development positions quantum computing as a transformative force in pharmaceutical research, driving its adoption and market growth.

Restraint

Quantum Decoherence and Error Rates

One of the primary restraints in the advancement and application of quantum computing is the challenge of quantum decoherence and high error rates in quantum bits (qubits). Quantum systems are extremely sensitive to external environments, which can lead to decoherence, effectively disrupting the quantum state of qubits and leading to computational errors.

This sensitivity necessitates the development of sophisticated error correction techniques and advanced quantum algorithms to manage and mitigate errors, posing a significant barrier to the practical implementation of quantum computing technologies.

Despite continuous improvements and innovations in quantum hardware and software, the technical complexity associated with maintaining qubit stability and accuracy remains a daunting challenge, hindering the scalability and reliability of quantum computing solutions across various sectors, including healthcare and pharmaceuticals.

Opportunity

Quantum Computing in Personalized Medicine

The integration of quantum computing into personalized medicine presents a substantial opportunity in the healthcare sector. Personalized medicine relies on the analysis of large volumes of genetic and clinical data to tailor treatments to individual patient characteristics, improving outcomes and minimizing side effects. Quantum computing’s ability to process and analyze complex datasets at an unparalleled speed offers the potential to revolutionize this field.

By enabling the precise modeling of genetic interactions and the effects of pharmaceuticals on an individual’s unique genetic makeup, quantum computing can facilitate the development of highly targeted therapies. This approach not only enhances the efficacy of treatments but also opens new avenues for the customization of healthcare, marking a significant shift towards more patient-centric medical practices.

Challenge

Skills Gap and Workforce Development

A significant challenge facing the adoption of quantum computing, especially in specialized sectors like healthcare and pharmaceuticals, is the skills gap and the need for workforce development. Quantum computing is a highly specialized field that requires a deep understanding of quantum mechanics, computer science, and specific industry knowledge.

Currently, there is a scarcity of professionals equipped with the necessary skills to develop and implement quantum computing solutions. This skills gap is exacerbated by the rapid pace of technological advancements, making it difficult for educational institutions and training programs to keep up.

Bridging this gap necessitates significant investments in education and training programs, as well as the cultivation of interdisciplinary collaboration between quantum physicists, computer scientists, and industry specialists. Overcoming this challenge is essential for the successful integration of quantum computing technologies into practical applications, driving innovation and efficiency in sectors poised for transformation.

Emerging Trends

• Transition to Error-Corrected Logical Qubits: As the field progresses, a significant shift from physical qubits to error-corrected logical qubits is anticipated. This evolution marks a critical step towards more stable and reliable quantum computations, enhancing the technology’s applicability in real-world scenarios​​.
• Integration with High-Performance Computing (HPC) Centers: The convergence of quantum processors and HPC centers is expected to create a hybrid computational landscape. This integration leverages the unique capabilities of both classical and quantum machines, promising to accelerate research and innovation across sectors, including AI, material science, and cryptography​​.
• Advancements in Quantum-Safe Cryptography: With the potential threat to current encryption models posed by quantum computing, significant efforts are being directed towards developing quantum-safe cryptography and key distribution. These advancements are crucial for maintaining data security in the quantum era, with networks employing quantum-safe key distribution to counter compromised key distribution risks​​.
• Collaborative International Efforts: Recognizing the importance of global collaboration for staying at the forefront of quantum advancements, 2024 is expected to witness increased international cooperation. Such collaborations are instrumental in pooling resources and expertise, driving faster progress and adoption of quantum technologies​​.
• Growing Public Sector Adoption: Governments and public sector entities are increasingly exploring quantum computing to address challenges in areas such as sustainability, transportation, logistics, and healthcare. This trend is supported by initiatives like the quantum sandbox and test bed programs, focusing on near-term application development to solve real-world problems​​.

Key Players Analysis

The Japan quantum computing market comprises several key players who are actively contributing to the development and growth of quantum computing technologies in the country. These players are involved in various aspects of quantum computing, including hardware manufacturing, software development, and research.

The Japan Quantum Computing Market is experiencing significant growth, driven by the commitment of key players who are pioneering advancements in quantum technologies. Among these, companies like Toshiba, Fujitsu, and NEC stand out due to their substantial investments in research and development. Toshiba is leveraging its expertise in quantum cryptography, focusing on securing data transmission against the backdrop of evolving cyber threats. Fujitsu, on the other hand, is making strides in quantum-inspired computing, offering solutions that bridge the gap between classical computing and the quantum future.

Top Market Leaders

• Riken
• Fujitsu Limited
• Hitachi Ltd.
• Toyota Motor Corporation
• Mitsubishi UFJ Financial Group Inc.
• Sumitomo Mitsui Trust Bank Ltd.
• JSR Corporation
• Mitsubishi Corporation
• Canon
• Nippon Telegraph and Telephone Corporation
• NEC Corporation
• Toshiba Corporation
• JSR Corporation
• Sony Corporation
• Mizuho Financial Group Inc.
• Quantinuum
• Mitsubishi UFJ Financial Group
• Other Key Players

Recent Developments

• In March 2023, Fujitsu and Osaka University’s Center for Quantum Information and Quantum Biology (QIQB) achieved a significant milestone in quantum computing by developing a highly efficient analog rotation quantum computing architecture. This breakthrough reduces the number of physical qubits required for quantum error correction by 90%, from 1 million to 10,000 qubits. This advancement brings practical quantum computing closer to reality and has the potential to revolutionize various industries.
• Additionally, in March 2023, a collaborative effort by researchers from RIKEN and affiliated institutions resulted in the development of Japan’s first quantum computer. This cutting-edge quantum computing system is now accessible to external users, offering high computational capacity and accelerated processing speeds by leveraging the principles of quantum mechanics.

Report Scope