If you use fs, be sure it's only within getInitialProps or getServerSideProps. (anything includes server-side rendering).

You may also need to create a next.config.js file with the following content to get the client bundle to build:

For webpack4

module.exports = {
  webpack: (config, { isServer }) => {
    // Fixes npm packages that depend on `fs` module
    if (!isServer) {
      config.node = {
        fs: 'empty'
      }
    }

    return config
  }
}

For webpack5

module.exports = {
  webpack5: true,
  webpack: (config) => {
    config.resolve.fallback = { fs: false };

    return config;
  },
};

Note: for other modules such as path, you can add multiple arguments such as

{
  fs: false,
  path: false
}

Ok, I played around with this issue & I think I have what cover all possible combinations. In the repo you can find working examples. There are 3 possible approaches, and the right one will depend on what's already in your project - details that were unspecified in the original question.

1. Solution while using webpack 5 next.config.js

module.exports = {
  future: {
    webpack5: true, // by default, if you customize webpack config, they switch back to version 4. 
      // Looks like backward compatibility approach.
  },
  webpack(config) {
    config.resolve.fallback = {
      ...config.resolve.fallback, // if you miss it, all the other options in fallback, specified
        // by next.js will be dropped. Doesn't make much sense, but how it is
      fs: false, // the solution
    };

    return config;
  },
};

1. Solution while using webpack 4 - next.config.js

module.exports = {
  webpack(config) { // we depend on nextjs switching to webpack 4 by default. Probably they will 
    // change this behavior at some future major version.
    config.node = {
      fs: "empty", // webpack4 era solution 
    };

    return config;
  },
};

1. You could consider using other library. According to node-jsencrypt readme they are node port of jsencrypt, and here I assume you try to build for browser. The node library got stuck at version 1, while the original library is already at version 3. As I checked in the last commit on main, if you use this library, it's building just fine without any issues.

Original, nextjs unaware answer:

Since version 5, webpack doesn't include polyfiles for node libraries. In your case, you most likely need to add resolve.fallback.fs: false to your webpack config.

More about this option- https://webpack.js.org/configuration/resolve/#resolvefallback It mentioned in v4 to v6 migration guide, if this is your case: https://webpack.js.org/migrate/5/