Asian chip manufacturers are expanding their operations in Japan

Asian chip manufacturers are expanding their operations in Japan is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• In the 1980s, Japan led the tech world with a strong chip industry, but later saw its global market share decline to around 10% due to chip wars.
• Recently, Japan’s chip sector is witnessing a resurgence with more companies, especially from Taiwan, planning expansions, driven partly by the weak yen.
• Despite Japan’s optimistic outlook, challenges like talent shortages persist, as evidenced by a 20% decline in chip industry workers over the past two decades.

In the 1980s, Japan once dominated half of the tech world with a powerful chip manufacturing industry, but unfortunately lost in subsequent chip wars, causing its global market share to plummet from 50% to around 10%.

However, in the wake of time, Japan seems to have glimpsed hope of resurgence in a new round of chip manufacturing reshuffle, as an increasing number of chip companies, especially those from Taiwan, China, are planning expansions in Japan.

Statistics indicate that at least 9 Taiwanese chip companies have established factories or planned to expand operations in Japan over the past two years, including major players like TSMC and UMC. Industry insiders suggest that the weak yen is a significant factor driving this shift.

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There will be a growth period for Japan’s semiconductor market

This trend has instilled great confidence in Japan’s chip industry. Hiroyuki Furuzono, General Manager of AIchip Japan, anticipates a growth period for Japan’s semiconductor market, with the company actively seizing opportunities in Japan and already participating in several promising projects.

This Saturday, TSMC will hold the opening ceremony for its first factory in Kyushu Island, Japan. This contrasts sharply with TSMC’s struggling factory in Arizona, USA, which has been unable to commence production due to delayed financial subsidies and a shortage of construction talent. The lagging chip policies and cultural differences in labour in the United States also seem to continually impact the landing enthusiasm of Asian manufacturers like TSMC. Recently, TSMC announced plans to build a second wafer factory in Japan, avoiding further expansion in the United States.

In contrast, TSMC has openly stated that Japan’s diligent work culture, coupled with the government’s generosity, makes it easier for TSMC to survive and thrive in Japan. This viewpoint is evidently being embraced by an increasing number of Asian semiconductor manufacturers. Nori Chiou, Investment Director at White Oak Capital, highlights that the core strength of a semiconductor powerhouse lies not only in leading companies but also in a robust ecosystem. The proactive support, extensive subsidies, and reduced intervention by the Japanese government have distinguished it from other global nations.

Japan faces a shortage of talent

However, some industry experts note a critical issue hindering the revival of Japan’s chip prowess: a shortage of talent. Takamoto Suzuki, Research Director at Marubeni Trading Company, believes Japan may lack sufficient young scientific and industrial workers to meet demands. Data indicates that over the past approximately twenty years, the number of workers in Japan’s chip-related industries has decreased by about one-fifth.