Japan promised the Taiwan Semiconductor Manufacturing Company to provide government support amounting to $3 billion to encourage it to invest (Reuters)

The Taiwan Semiconductor Manufacturing Company (TSMC) inaugurated in an official ceremony today, Saturday, the first semiconductor factory in Japan as part of its existing plan to expand globally, according to the Associated Press.

“We are extremely grateful for the great support you have provided at every step,” said company President Mark Liu, after thanking the Japanese government, the local community and businessmen including electronics giant Sony and auto parts manufacturer Denso.

This comes as Japan seeks to regain its position in the chip production industry.

Advanced semiconductor manufacturing is scheduled to begin in Japan later this year.

Earlier this month, the Taiwanese company also announced plans to establish a second factory in Japan, and production is expected to begin within approximately three years.

The division over Taiwan was a point of contention in the relationship between the United States and China over the chip industry (Reuters)

Total private sector investment amounts to $20 billion in both plants, which are located in the Kumamoto region, southwestern Japan.

Prime Minister Fumio Kishida sent a congratulatory video message, calling the opening of the factory a "giant first step" and stressing Japan's friendly relations with Taiwan and the importance of cutting-edge semiconductor technology.

Japan promised Taiwan Semiconductor Manufacturing Company government support amounting to 476 billion yen ($3 billion) to encourage the semiconductor giant to invest, and Kishida confirmed a second package, raising Japan's support to more than 1 trillion yen ($7 billion).

Although the company has built its second factory in the United States and announced a plan to establish its first factory in Europe, Japan could be a more attractive option.

Due to its geographical proximity to Taiwan, Japan is an important ally of the United States, at a time when China asserts that the self-governing island is part of its territory and stresses the need for it to be subject to Beijing’s control.

The division constitutes a point of contention in the relationship between the United States and China, and this step is also important for Japan, which recently allocated about 5 trillion yen ($33 billion) to revitalize its chip industry.

Four decades ago, Japan dominated the chip industry with Toshiba and NEC controlling half of global production, and this number recently dropped to less than 10%, due to competition from manufacturers in South Korea, the United States, Europe, as well as Taiwan.

Source: Associated Press