(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. and other related companies will add ¥11.2 trillion ($80 billion) to Japan’s chip-making hot spot of Kumamoto prefecture over the next decade, according to analysis from a local bank.
Kyushu Financial Group, a regional lender based in Kumamoto’s capital, almost doubled its projection for the economic impact that the chip sector will bring to the region compared to its estimate a year earlier, according to a presentation on Thursday. The bank said that 171 firms had made new investments since November 2021, up from 90 in an earlier analysis.
TSMC’s Kumamoto location was once a sleepy farming area, but has undergone rapid growth as part of Japan’s chipmaking ambitions. The Taiwanese tech giant opened its first plant there in February and will start building a second by the end of the year, while indicating intentions to construct a third.
The local economy is racing to keep up, with skyrocketing land prices and new infrastructure planned to deal with congestion from an influx of industry personnel. Kumamoto’s growth spurt has been supported by generous government subsidies, including grants totaling around ¥1.1 trillion for TSMC’s two plants to date.
--With assistance from Sarah Hilton.
©2024 Bloomberg L.P.
