KUMAMOTO, Japan: Japan’s bid to revive its semiconductor dominance is reshaping the rural heart of Kumamoto, where billions in government-backed investment and the arrival of tech titan Taiwan Semiconductor Manufacturing Company (TSMC) are driving job growth and a broader economic boom.
This comes as semiconductors have been designated a strategic pillar of the country’s industrial policy, as Tokyo seeks to rebuild domestic chipmaking capacity and reduce reliance on overseas supply chains.
Billions of dollars in state support are being channelled into chipmaking hubs such as Kumamoto prefecture in Kyushu, which is sometimes dubbed Japan’s “Silicon Island” for its semiconductor history.
SEMICONDUCTOR BOOM
Taiwan’s TSMC opened its factory in Kumamoto’s Kikuyo town in February 2024, under the name Japan Advanced Semiconductor Manufacturing. It is a joint venture with Sony Semiconductor Solutions, Denso, and Toyota as partners.
A second fabrication plant is under construction, though local media have reported that work has been paused as design changes are considered.
The total investment in the plants, estimated at more than US$20 billion, is the largest the prefecture has ever received. Kumamoto is now pushing for a third TSMC plant.
Kumamoto governor Takashi Kimura said the TSMC plant has triggered a semiconductor boom, attracting around 70 related firms and creating more than 6,000 jobs.
“The number of jobs increased by several thousand, but this is taking place in what has been a very rural town,” he noted.
“Without roads and infrastructure fully developed, the fabrication plant was completed. Around there, roads are congested. These are matters to be resolved.”
To meet growing demand for skilled workers, new training facilities have sprung up.
Nisso Technical Center Kumamoto opened just two months after TSMC’s factory, offering programmes to train new hires and career switchers in semiconductor manufacturing.
It has even set up a mock fabrication facility, complete with protective gear, sanitisation procedures and machines used in real production lines.
The training centre said it saw an opportunity to fill the need for trained workers.
“TSMC is one (of the reasons). There are also Sony and other semiconductor makers coming here, so we set up targeting them,” said Osamu Kyan, director of its human resources development division.
“They especially lack those (workers) with moderate experience – those in between newcomers and veteran workers.”
More than a thousand people have already passed through its programmes.
“I want to make products that satisfy customers and create made-in-Japan products,” said trainee Shogo Yoshioka.
GROWING PAINS AND PRESSURES
The influx of workers is also driving demand for other services such as schools, as more families move into the area.
Educational institutions are expanding to keep pace.
Kumamoto International School, for instance, began as a preschool in 2003. It accelerated plans to open its high school after TSMC arrived, launching grades seven, eight and nine in 2023.
Today, the school has more than 300 students and 55 staff, offering classes in Japanese, English and Mandarin for both native and non-native speakers.
“The plan is to expand the building … and to expand the number of students that we can admit,” said its principal Matthew Ohm.
As businesses move in, the cost of living is also rising.
Commercial land prices in Kikuyo jumped nearly 31 per cent last year, according to government data.
But the town’s coffers are also growing, with an estimated 30 per cent jump in property tax revenue for fiscal year 2025.
The drive to turn Kumamoto into the epicentre of Japan’s chip renaissance shows no sign of slowing.
Japan currently holds about 10 per cent of the global semiconductor market, down from 50 per cent in 1988.
“Industries that utilise the latest semiconductors hardly exist in Japan and the world,” said Kimura. “We would like to create a new industry that shapes the future in Kumamoto.”