Taiwan Semiconductor Company Launches First Factory in Japan

Taiwan’s semiconductor manufacturing company, TSMC, inaugurated today, Saturday, its first semiconductor factory in Japan as part of its global expansion plan, according to the Associated Press agency.

Mark Liu, the company’s president, expressed gratitude to the Japanese government, the local community, and businesses, including the electronics giant Sony and the automotive parts manufacturer Denso, saying, “We are deeply grateful for the tremendous support you have provided at every step.”

This comes as Japan seeks to regain its position in the semiconductor production industry. Advanced semiconductor manufacturing in Japan is expected to begin later this year.

Earlier this month, the Taiwanese company also announced plans to establish a second factory in Japan, with production expected to start in about three years.

Total private sector investments amount to $20 billion in both factories, located in the Kumamoto region, southwest Japan.

Prime Minister Fumio Kishida sent a congratulatory message via video, describing the factory’s opening as a “giant initial step” and emphasizing Japan’s friendly relations with Taiwan and the importance of advanced semiconductor technology.

Japan has pledged governmental support of 476 billion yen ($3 billion) to encourage the giant semiconductor company’s investment, with Kishida confirming a second package, raising Japan’s support to over a trillion yen ($7 billion).

Despite the company building its second factory in the United States and announcing plans to establish its first factory in Europe, Japan could be a more attractive option.

Due to its geographical proximity to Taiwan, Japan is an important ally to the United States, especially as China insists that the self-governing island is part of its territory and insists on its control.

The division over Taiwan is a point of contention in US-China relations, and this move is also significant for Japan, which recently allocated around 5 trillion yen ($33 billion) to revitalize its semiconductor industry.

Japan dominated the semiconductor industry four decades ago, with Toshiba and NEC controlling half of global production. This figure has recently dropped to less than 10% due to competition from manufacturers in South Korea, the United States, Europe, as well as Taiwan.