TSMC helps Kumamoto regain pivotal position: Japanese business leader

Kumamoto, Japan, Feb. 23 (CNA) In an interview with CNA, a local business leader in Japan's Kumamoto prefecture said that the arrival of Taiwan Semiconducator Manufacturing Co. (TSMC) in the prefecture marks the regaining of the area's pivotal position established during the Meiji Restoration in the 19th century.

The first fab of Japan Advanced Semiconductor Manufacturing, Inc. (JASM), TSMC's majority-owned manufacturing subsidiary in Kumamoto is set to open Saturday.

Akito Kuga, chairman of the Kumamoto Chamber of Commerce and Industry, talked to CNA before the opening of the Kumamoto fab about the drive to once again become the driving force in Kyushu.

After the 1868 Meiji Restoration, Kumamoto was of key importance as it was home to a major garrison national defense. However, that position was ceded to Fukuoka after World War II as Japan turned to foreign trade for post-war economic development, and Kumamoto does not have a port, Kuga said.

JASM was set up by TSMC, the world's largest contract chip maker, and Japan's Sony in Kumamoto -- and with it came a range of industries. As a result, the prefecture has gained renewed attention, the chairman said.

Kyushu, where Kumamoto prefecture is situated, once had a successful semiconductor industry that led to it being called "silicon island Kyushu," said Kuga, but it later fell into decline.

With TSMC's arrival, some have suggested that "silicon island Kyushu" is rising again, but Kuga said a "reborn silicon island Kyushu" would be a more apt description.

Japanese conglomerations such as Sony, Mitsubishi Electric, SUMCO and Kyocera have all made major semiconductor-related investments in Kyushu following TSMC's announcement in 2021 that it planned to set up a plant it Kumamoto.

Fujifilm also expanded manufacturing facilities in its semiconductor materials factory January in Kumamoto's Kikuyo town, where TSMC's plant is located. Ebara Corporation, a major industry machinery producer, announced plans to set up new factories to produce semiconductor-making equipment in Kumamoto in June.

Rohm Semiconductor, a Japanese company, is investing 289.2 billion yen in a new semiconductor plant in Miyazaki Prefecture, also in Kyushu, to produce silicon carbide power chips popular with electric car makers.

When asked about the estimated economic benefits to be generated by the TSMC Kumamoto plant, Kuga said if two Kumamoto fabs are built, bringing in 3.2 trillion yen of investment, there could be a total of 10.5 trillion yen over 10 years until 2030, citing an estimation done by the Kyushu Economic Research Center last December.

However, that number does not include investments made on residences and other infrastructure, Kuga said, estimating that the figure could reach tens of trillions of yen if these are included.

Taiwan is not the only country that is seeing its semiconductor-related companies invest in Japan, as some major U.S. semiconductor companies are also building new plants in Japan, Kuga said.

However, the Japanese business head said that since TSMC's business model is one of co-manufacturing and co-researching new techniques with different kinds of corporations, it has the best prospect among those investing in Japan.

Kuga also mentioned misgivings about TSMC's arrival in Kumamoto, a prefecture that is the fifth biggest producer of agricultural products in the country.

The influx of factories will make striking a balance between the needs of farmland for livestock farming and industrial development an ongoing task for the local government, he said.

At the end of the interview, Kuga told CNA that he welcomes Taiwanese people working in Kumamoto, as he believes there are many similarities between Taiwanese and Kumamoto people, such as proactivity, work capabilities, and most importantly, their cheerfulness.

"Pay has also been pushed up [by the semiconductor boom]," he said.