Participating companies include NTT, NEC, Furukawa Electric, Shinko Electric and Kioxia in consultation with Intel and SK Hynix.

The chip industry aims to harness light for sending signals, speeding up transmission and cutting power consumption.

"Hopefully (the technology) is a future game changer," Japan's industry minister Ken Saito told reporters.

The initiative comes as Japan strives to retain its edge in the chip industry and deepen partnerships with allied nations as China makes strides in advanced technologies.

($1 = 147.4200 yen)

(Reporting by Sam Nussey and Miho Uranaka; Editing by Tom Hogue)

By Sam Nussey and Miho Uranaka