Taiwanese Chip Companies Shift from China to Japan at Full Speed

Japan is experiencing a second golden age of semiconductors. In the early 80s, the country controlled almost 50% of the world’s chip production, and now, nearly 45 years later, the percentage has dropped to just 10. As a result, much like in Europe, Japan is seeking to revamp the industry by investing heavily. Capitalizing on the US sanctions against China, this move is proving favorable for the Land of the Rising Sun, as Taiwan’s semiconductor firms are quickly leaving China to establish themselves in Japan.

China’s market is becoming increasingly dominated by domestic firms, which are rapidly constructing fabs to capitalize on the ongoing exodus of foreign chip-making companies. Taiwan, due to its ties to China, is accelerating this process so quickly that Taiwanese firms are encountering issues in Japan due to the hasty transition.

TSMC plans to open a second fab in Japan, followed closely by other Taiwanese chip-making businesses leaving China. Several factors are contributing to this migration, according to semiconductor industry experts and analysts. Firstly, the US and its blockades are closing the market to any non-US-based businesses. Secondly, Japan offers a robust ecosystem for semiconductors, and the government is increasingly supporting the industry with seemingly limitless funding, a sentiment echoed by the US and South Korea.

Additionally, Japan’s effort to attract companies in the chip-making sector is enhanced by the support from Taiwanese firms leaving China. These businesses are welcomed with open arms due to Japan’s need for skilled workers and specialized infrastructure.

This massive exodus of firms from China to Japan and Taiwan has been dubbed “decoupling.”- Japan could represent a threat to South Korea.

Despite tensions arising from disputes over wafer supplies and other issues, both countries are competing fiercely in the semiconductor landscape. South Korea has ramped up investments, but Japan boasts a greater number of companies, more diverse offerings, and broader infrastructure thanks to Taiwan’s support.

Companies like Alchip claim that Japan’s semiconductor market is booming once again, spurred by Taiwanese clients eager to build closer relationships and even going so far as to learn Japanese. There’s undoubtedly synergy between the two countries.

The influx of Taiwanese companies to Japan is likely to further boost the nation’s semiconductor industry, as local workers will be trained by skilled professionals from these established businesses. Japan is fast becoming a new powerhouse in the semiconductor sector, a development that the US is currently welcoming… for now.