The world's largest contract manufacturing company for semiconductors, Taiwan's TSMC, has completed construction of Japan's first factory in Kumamoto Prefecture and will begin full-scale operations by the end of this year.

The company is also planning to build a second factory, and the government is providing huge amounts of support to attract the increasingly important semiconductor industry.

The opening ceremony for TSMC's semiconductor factory, built in Kikuyo Town, Kumamoto Prefecture, will be held on the 24th, with the company's top management and Minister of Economy, Trade and Industry Saito in attendance.

The investment in the new factory will be approximately 8.6 billion dollars (approximately 1.29 trillion yen in Japanese yen), and the government will subsidize up to 476 billion yen, citing the importance of semiconductors for economic security.

In addition to starting full-scale production at the new factory by the end of this year, the company has also decided to construct a second factory, and the government plans to provide up to 730 billion yen in subsidies.

The two factories will produce 40-nanometer semiconductors and 6- to 7-nanometer advanced semiconductors for a wide range of industries, including automobiles.

Against the backdrop of conflicts between the United States and China and supply shortages due to the coronavirus pandemic, each country has positioned semiconductors as an important commodity and is stepping up their development and production.

In particular, cutting-edge semiconductors are essential for AI and self-driving technology, but Japan is lagging far behind, so the government is hoping to attract bases with huge amounts of support and expand production.

However, the international competitiveness of Japan's semiconductor industry has declined, with the exception of some areas such as manufacturing equipment and materials, and securing and training engineers is an issue in order to make a comeback.