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Behind Taiwanese Chip Makers’ Japan Investment Spree
TSMC and other Taiwanese chip makers are investing heavily in Japanese production bases in a strategy that dovetails neatly with Japan’s own ambitions for a semiconductor renaissance. The author sheds light on the economic factors driving this new relationship.
Taiwan’s total share of the global foundry market comes to 67% (2023) when one adds in the output of firms like Lianhua Electronics Co. (UMC) and Power Crystal Semiconductor Manufacturing Co. (PSMC), which followed TSMC’s lead. After benefitting from the removal of tariffs worldwide, the semiconductor industry faced a raft of new import barriers and export restrictions, leading Chang to pronounce globalization and free trade “almost dead” in the microchip sector. Citing economic security, the governments of the leading industrial economies began offering generous subsidies and tax breaks to encourage domestic chip production, vying with one another to attract semiconductor companies like TSMC.
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