Japan Aims to Boost Semiconductor Production Local Governments Expect Benefits

21 Jun, 2024

Japan Aims to Boost Semiconductor Production Local Governments Expect Benefits

In an effort to bolster supply chains and economic security following the global semiconductor shortage caused by the COVID-19 pandemic, the Japanese government is encouraging businesses to increase domestic semiconductor production. This initiative includes the construction of new factories throughout the country.

A factory for Tokyo-based chipmaker Rapidus Corp. is swiftly being built on the east side of New Chitose Airport in Hokkaido. Established in 2022 and funded by major Japanese companies with government support, Rapidus aims to mass-produce next-generation chips at this facility. A prototype production line is expected to be operational by April next year, with full-scale production slated for 2027.

The new plant is anticipated to bring around 1,000 employees to Chitose, leading to a rise in condominium construction in the city. This mirrors a previous construction boom in Kumamoto Prefecture following the arrival of Taiwan Semiconductor Manufacturing Co.

The factory’s construction has generated various jobs, and the Chitose Chamber of Commerce and Industry has received many inquiries related to Rapidus. The number of special members in the chamber has grown from 26 to 46 between March 2023 and March 2024. Land prices in Chitose have significantly increased due to the semiconductor industry's growth.

In Ohira, Miyagi Prefecture, Powerchip Semiconductor Manufacturing Corp. and SBI Holdings Inc. plan to start a new plant's operations in 2027. Local governments are creating new departments to support the semiconductor industry, with Miyagi establishing a seven-person office for this purpose. Sendai has also appointed a section chief to attract semiconductor-related businesses.

Kenji Nakamura from Kushiro Public University advises local governments to focus on attracting related industries and improving living conditions to accommodate an influx of talent. This initiative presents an opportunity to enhance education and leisure activities in the affected areas.