As more and more Taiwanese chip businesses develop here, not only to support a new TSMC facility but also because they are thrilled about the Japanese sector's prospects, Japan's efforts to restore its semiconductor industry are receiving a boost.
The surge coincides with the global chip industry's shifting alliances and interests as the US works to impede China's advancement in cutting-edge semiconductors and fortify relationships among its allies.
The China decoupling trend is shown by thefabless chipmaker Alchip Technologies, which specialised in bespoke chips known as application-specific integrated chips (ASICs). According to a source knowledgeable on the topic, Alchip started shifting responsibilities offshore, many of them to Japan, but the majority of its research and development engineers were still stationed in China in 2022.
The company stated that it is hiring in Taiwan, North America, and Japan, but it would not elaborate on its hiring practices.
General manager of Alchip Japan Hiroyuki Furuzono stated, "We're expecting growth in the semiconductor market in Japan, we're continuously capitalising on ASIC opportunities in Japan, and we're already engaged in several good projects."
A Reuters count indicates that during the last two years, at least nine Taiwanese chip companies have opened offices or increased their operations in Japan.
For instance, eMemory Technology, a chip design company, hired 11 people from Japan companies that used to dominate the industry and created an office in Yokohama, a city that is adjacent to Tokyo, two years ago.
"After we built the office there we are receiving more frequent communication with the customers and they are more willing to talk in Japanese with our local people, so we see business is booming," eMemory President Michael Ho said.
According to the source and another person with knowledge of the situation, more Taiwanese companies in the chip sector are considering expanding into Japan or entering the market for the first time. They also added that decisions of this nature have become simpler due to the weakening yen.
The sources declined to be named since the details were confidential.
Despite having some of the top producers of semiconductor equipment and materials, trade conflicts with the United States and rivalry from rivals in Taiwan and South Korea have caused Japan's share of the worldwide chip manufacturing market to drop from over 50% in the 1980s to 10% today.
However, Japan has recently committed enormous sums of money to rebuilding its chip manufacturing industry, realising the importance of semiconductors for economic stability and being encouraged by Washington and the worldwide chip scarcity during the pandemic.
The first factory of Taiwan Semiconductor Manufacturing Co. (TSMC), formerly known as Taiwan Semiconductor Manufacturing Co., will open on Saturday in the southern island of Kyushu, a centre for chip manufacturing.
The troublesome building of TSMC's Arizona factory stands in stark contrast to the on-track plan. It recently revealed intentions to build a second factory in Japan, increasing the total amount of capital invested in the project to above $20 billion.
According to Reuters, the world's largest chip manufacturer believes that Japan's hardworking workforce and approachable, generously subsidising government are a perfect match.
According to Nori Chiou, investment director at White Oak Capital, "the core strength of a strong semiconductor country lies not just in leading firms but in a robust ecosystem."
"Japan's proactive government support, marked by substantial subsidies and minimal political interference, sets it apart, fostering superior progress compared to many other countries."
Apart from TSMC, Rapidus, a chip foundry venture supported by the Japanese government, intends to start mass producing chips on Hokkaido, an island in the north, in 2027. Additionally, Taiwan-based Powerchip is requesting government funding to establish a $5.4 billion foundry in Japan.
Taiwanese companies are expanding their footprint in Japan. Global Unichip Corp (GUC), another fabless ASIC designer, is funded by TSMC and stated that it is drawn to the country for the business potential and engineering talent.
In addition, late last year saw the opening of a new lab in Kyushu by Materials Analysis Technology (MA-tek), which inspects semiconductor materials and lists TSMC as its largest client. Another important TSMC contractor, Finesse Technology, is developing a plant in Japan for semiconductor equipment and maintenance.
According to the sources, Marketech, a TSMC supplier, is also growing in Japan. Marketech opted not to respond.
As part of the decoupling process, "the trend will continue for the foreseeable future," stated Takamoto Suzuki, head of Marubeni's China economic research. But he cautioned that Japan might not have enough young people working in the scientific sector to meet demand.
Over the course of the previous 20 years or more, the number of workers in Japan's chip-related firms has decreased by around a fifth, despite increased efforts by the government and universities to attract students to this profession.
(Source:www.businesstoday.in)
The surge coincides with the global chip industry's shifting alliances and interests as the US works to impede China's advancement in cutting-edge semiconductors and fortify relationships among its allies.
The China decoupling trend is shown by thefabless chipmaker Alchip Technologies, which specialised in bespoke chips known as application-specific integrated chips (ASICs). According to a source knowledgeable on the topic, Alchip started shifting responsibilities offshore, many of them to Japan, but the majority of its research and development engineers were still stationed in China in 2022.
The company stated that it is hiring in Taiwan, North America, and Japan, but it would not elaborate on its hiring practices.
General manager of Alchip Japan Hiroyuki Furuzono stated, "We're expecting growth in the semiconductor market in Japan, we're continuously capitalising on ASIC opportunities in Japan, and we're already engaged in several good projects."
A Reuters count indicates that during the last two years, at least nine Taiwanese chip companies have opened offices or increased their operations in Japan.
For instance, eMemory Technology, a chip design company, hired 11 people from Japan companies that used to dominate the industry and created an office in Yokohama, a city that is adjacent to Tokyo, two years ago.
"After we built the office there we are receiving more frequent communication with the customers and they are more willing to talk in Japanese with our local people, so we see business is booming," eMemory President Michael Ho said.
According to the source and another person with knowledge of the situation, more Taiwanese companies in the chip sector are considering expanding into Japan or entering the market for the first time. They also added that decisions of this nature have become simpler due to the weakening yen.
The sources declined to be named since the details were confidential.
Despite having some of the top producers of semiconductor equipment and materials, trade conflicts with the United States and rivalry from rivals in Taiwan and South Korea have caused Japan's share of the worldwide chip manufacturing market to drop from over 50% in the 1980s to 10% today.
However, Japan has recently committed enormous sums of money to rebuilding its chip manufacturing industry, realising the importance of semiconductors for economic stability and being encouraged by Washington and the worldwide chip scarcity during the pandemic.
The first factory of Taiwan Semiconductor Manufacturing Co. (TSMC), formerly known as Taiwan Semiconductor Manufacturing Co., will open on Saturday in the southern island of Kyushu, a centre for chip manufacturing.
The troublesome building of TSMC's Arizona factory stands in stark contrast to the on-track plan. It recently revealed intentions to build a second factory in Japan, increasing the total amount of capital invested in the project to above $20 billion.
According to Reuters, the world's largest chip manufacturer believes that Japan's hardworking workforce and approachable, generously subsidising government are a perfect match.
According to Nori Chiou, investment director at White Oak Capital, "the core strength of a strong semiconductor country lies not just in leading firms but in a robust ecosystem."
"Japan's proactive government support, marked by substantial subsidies and minimal political interference, sets it apart, fostering superior progress compared to many other countries."
Apart from TSMC, Rapidus, a chip foundry venture supported by the Japanese government, intends to start mass producing chips on Hokkaido, an island in the north, in 2027. Additionally, Taiwan-based Powerchip is requesting government funding to establish a $5.4 billion foundry in Japan.
Taiwanese companies are expanding their footprint in Japan. Global Unichip Corp (GUC), another fabless ASIC designer, is funded by TSMC and stated that it is drawn to the country for the business potential and engineering talent.
In addition, late last year saw the opening of a new lab in Kyushu by Materials Analysis Technology (MA-tek), which inspects semiconductor materials and lists TSMC as its largest client. Another important TSMC contractor, Finesse Technology, is developing a plant in Japan for semiconductor equipment and maintenance.
According to the sources, Marketech, a TSMC supplier, is also growing in Japan. Marketech opted not to respond.
As part of the decoupling process, "the trend will continue for the foreseeable future," stated Takamoto Suzuki, head of Marubeni's China economic research. But he cautioned that Japan might not have enough young people working in the scientific sector to meet demand.
Over the course of the previous 20 years or more, the number of workers in Japan's chip-related firms has decreased by around a fifth, despite increased efforts by the government and universities to attract students to this profession.
(Source:www.businesstoday.in)
