Key facts
- Japanese local governments are increasing outreach to Taiwan for investment in semiconductors and AI.
- The city of Kitakyushu held an investment seminar in Taiwan in July.
- Itochu Techno-Solutions and Taiwan's Systex formed an IT joint venture in Fukuoka.
- Taiwanese direct investment in Japan reached 128 cases in 2025.
- Japan plans to invest 68 trillion yen in semiconductors by 2040.
- TSMC is building a second plant in Kumamoto and plans to mass-produce next-generation image sensors from 2029 with Sony.
Japanese local governments are actively seeking to attract Taiwanese investment in the semiconductor and artificial intelligence sectors, aiming to bolster their own industrial bases. The city of Kitakyushu, for instance, held an investment seminar in Taiwan in July, targeting companies operating near TSMC headquarters.
The deepening chip alliance between Taiwan and Japan, catalyzed by TSMC's establishment of a plant in Kumamoto Prefecture, is transforming Kyushu into a significant semiconductor hub. This collaboration extends beyond manufacturing, with Taiwanese chip partners increasingly moving into Japan and receiving tailored support. Itochu Techno-Solutions, a subsidiary of Japan's Itochu, recently partnered with Taiwan's Systex, the largest system integration firm in Taiwan, to establish a joint venture in Fukuoka. This venture will provide system development and network equipment procurement services for Taiwanese companies expanding into Japan, leveraging Systex's experience in building TSMC's IT infrastructure.
Official figures indicate a growing trend of Taiwanese investment in Japan, with approvals rising from 99 cases in 2024 to a record 128 cases in 2025. The Japanese government has committed substantial funding, planning to invest 68 trillion yen in semiconductors by 2040. The Kyushu region, with its historical ties to the chip industry and abundant groundwater, is seen as an ideal location. The region's disaster resilience was highlighted when semiconductor plants in Kumamoto recovered quickly after a magnitude-7.1 earthquake.
The semiconductor ecosystem around Kumamoto, including material and equipment suppliers like Tokyo Electron and a Sony image-sensor plant (a TSMC customer), further strengthens its appeal. Mitsui Fudosan is developing a "Kumamoto Science Park," modeled after Taiwan's Hsinchu Science Park, to serve as a semiconductor cluster hub. Cooperation is expanding into physical AI, with the establishment of a Physical AI and Semiconductor Technology Center (PASTEC) within the park.
Security concerns are also driving closer ties, with a focus on supply-chain cooperation. A recent "2026 Taiwan-Japan Tech High-Level Forum" emphasized the need for a "democratic camp" supply chain, combining Taiwan's wafer manufacturing strengths with Japan's expertise in materials and equipment. Taiwan's government is supporting this through a "Taiwan-Japan Joint R&D Program," covering up to 50% of project costs for joint ventures in key industries like semiconductors and AI.