Taiwanese Chip Companies Expand in Japan Amid Decoupling from China

The semiconductor landscape is witnessing a significant shift as Taiwanese chip firms increasingly establish and expand their operations in Japan, signaling a strategic move amidst the accelerating decoupling from China. This trend aligns with Japan’s efforts to revitalize its semiconductor industry, offering a promising outlook for the sector’s future in the country.

The shift is partly driven by global dynamics, including the United States’ initiatives to curb China’s advancements in high-tech semiconductors and to fortify alliances with its allies. Among the companies making the move is Alchip Technologies, a fabless chipmaker specializing in application-specific integrated chips (ASICs), which is transitioning its research and development roles out of China, with many headed to Japan.

This relocation trend underscores the broader industry realignment, with at least nine Taiwanese chip firms establishing or broadening their presence in Japan over the last two years. This includes eMemory Technology, which has capitalized on the skilled workforce and business opportunities in Japan, particularly in regions like Yokohama.

The strategic shift comes as Japan aims to reclaim its stature in the global chip manufacturing market, which has dwindled from 50 percent in the 1980s to 10 percent today. Recent years have seen Japan inject substantial investments into the semiconductor sector, recognizing its critical role in economic security. This includes welcoming Taiwan Semiconductor Manufacturing Co’s (TSMC) first plant in Kyushu and supporting the government-backed chip foundry venture Rapidus, set for mass production in Hokkaido by 2027.

Taiwanese firms are not only drawn by Japan’s engineering talent and business potential but also by the proactive government support marked by significant subsidies and minimal political interference. This favorable environment, coupled with Japan’s industrious work culture, makes it an attractive hub for semiconductor operations.

However, the expansion of Taiwan’s semiconductor industry in Japan is not without challenges. Concerns have been raised about Japan’s ability to supply enough young workers skilled in the science industry to meet the growing demand, despite government and academic efforts to address this issue.

As the global semiconductor industry continues to realign in response to geopolitical pressures and strategic partnerships, Japan’s role as a burgeoning center for chip manufacturing and research is increasingly solidified, marking a new chapter in the global tech landscape.