Japan Entertains More Taiwan Chip Companies as China Decoupling Grows

A recent report by Reuters suggests that Japan’s continuous push to revive its semiconductor industry has increased the expansion of more Taiwanese chip companies on its shores. 

These companies are interested in supporting a new TSMC plant and aiming to benefit from the promising outlook of the Japanese sector. 

This rise in activity occurs when the global chip industry is recording massive shifts in operational priorities due to the USA’s restrictions on China’s semiconductors.

Taiwan Expands Chip Operations

One notable participant in this trend is Alchip Technologies, a fabless chipmaker specializing in application-specific integrated chips (ASICs). As of 2022, most of its research and development engineers were based in China.

But it has started moving some roles overseas, with more concentration in Japan.

While Alchip is actively hiring in Japan, North America, and Taiwan, specific details about personnel matters remain undisclosed. As reported by Reuters, the general manager of Alchip Japan, Hiroyuki Furuzono, expressed optimism about the semiconductor market’s growth in Japan.

He emphasized their focus on ASIC opportunities and engagement in several promising projects. Reuters count indicates nine Taiwanese chip firms have established or expanded operations in Japan over the past two years.

For instance, chip design company eMemory Technology opened an office in Yokohama two years ago, hiring employees from Japanese conglomerates. This strategic move has facilitated increased communication with customers and a booming business.

According to Michael Ho, President of eMemory, establishing their office in Yokohama has resulted in more frequent and effective customer communication. These individuals have already expressed their willingness to communicate in Japanese with their local team.

Additionally, sources familiar with the matter revealed that more Taiwanese chip sector firms are considering expanding their presence or entering the Japanese market for the first time. The favorable exchange rate reportedly facilitates the decision-making process, with a weak yen making such strategic moves more appealing.

Significant Support from Tech Firms

This weekend marks the beginning of TSMC’s inaugural plant in Kyushu, the southern island known for its chipmaking prominence. In contrast to the challenges faced in constructing TSMC’s Arizona facility, the company has unveiled plans for a second fabrication plant in Japan.

This now amounts to a total investment exceeding $20 billion. According to Reuters, TSMC perceives Japan as an ideal fit because of its dynamic work culture and a government characterized by easy collaboration and generous support.

Beyond TSMC, other players like the Japanese government-backed chip foundry venture Rapidus and Taiwan’s Powerchip are also making significant strides in the country. 

Additionally, TSMC-backed Global Unichip Corp (GUC), a fabless ASIC designer, is also drawn to Japan by its engineering talent and business prospects.

Furthermore, crucial TSMC partners like Materials Analysis Technology (MA-tek) and Finesse Technology have expanded their presence in Japan. While MA-tek formed a new lab in Kyushu, Finesse Technology has begun its factory, which is currently under construction.

Notably, the trend of Taiwanese firms expanding in Japan is expected to persist, driven by the ongoing decoupling dynamics. However, Takamoto Suzuki, the head of China’s economic research for Marubeni, cautioned that Japan might face challenges in meeting the demand. 

This is mainly due to a potential shortage of young talent in the science industry.