Taiwan Semiconductor Manufacturing Company (TSMC) is expanding its operations to Kikuyo, a small town in southwestern Japan, in response to the global semiconductor industry’s changing landscape. The company opened a factory in Kikuyo, its first outside Taiwan since 2018, with support from the Japanese government. The area around the factory is bustling with TSMC employees, suppliers, and industry giants like Sony, Denso, and Toyota. Signs in traditional Chinese characters now dot the town, catering to the growing foreign population in Kikuyo.
The semiconductor industry is undergoing a significant transformation due to the risks associated with concentrated production in Taiwan, the global chip shortage, and geopolitical tensions. In response, governments worldwide are investing billions to bring chip manufacturing to their shores. TSMC is expanding its operations in the United States, Japan, and Germany, with plans for a third factory in Phoenix. Japan has committed $26 billion to revive its chip industry, with a focus on chips used in cars. Companies will require substantial investments, skilled workers, and infrastructure to support this expansion.
TSMC’s presence in Japan highlights the country’s commitment to revitalizing its chip industry by attracting major players like TSMC and building a robust supply chain. TSMC’s new factory in Kikuyo is already operational and will be fully functional by the end of the year, while its American factories have faced delays. The company’s expansion efforts have shown its ability to replicate the pace of production outside Taiwan, despite challenges faced in Arizona. Ensuring a pipeline of skilled workers remains a priority, with local engineering courses ramping up in response to demand.
The influx of TSMC workers to Kikuyo has led to a real estate boom in the area, with prices rising and investors purchasing farmland remotely. Many workers are relocating from urban centers in Taiwan to Kikuyo, seeking move-in ready homes, leading to a housing demand that is reminiscent of cities like Hsinchu in Taiwan. The growth in Kikuyo’s population and economy is evident in the town’s transformation, with local businesses and residents benefiting from the increased activity.
TSMC’s presence in Kikuyo has sparked economic growth and infrastructure development in the region, creating new opportunities for businesses and workers. The town’s strategic location and support from the Japanese government have helped attract investments and skilled labor. The expansion of TSMC’s operations to Japan is part of a larger trend of reshoring semiconductor manufacturing and diversifying the global supply chain. As the industry continues to evolve, companies like TSMC will play a crucial role in shaping its future and driving innovation in chip technology.
