The initial excitement surrounding the construction of a Taiwanese semiconductor company, TSMC's chip production facility in western Japan has gradually been replaced by growing concerns over various challenges. These challenges include the lack of available land, an underdeveloped road network, and limited water resources in the region. Additionally, the complexities involved in securing a site for a second facility may further hinder the overall development.
Both the Nikkei Asian Review and Bloomberg reported on these emerging challenges, emphasizing the unpreparedness, primarily in the transportation infrastructure, of the agricultural Kumamoto Prefecture. As the main focus of the region has been on agricultural activities, the local transportation has inadequately developed, causing potential difficulties in both goods delivery and personnel movement. With a limited number of bus routes available and an already overcrowded railway line, establishing a strong transportation network remains a significant issue for the project.
Moreover, the area surrounding the construction site is predominantly rural, featuring privately owned land and narrow country roads that primarily support local farmers. Consequently, local authorities have been negotiating with numerous private landowners for the expansion of these roads, but many are resistant to selling their plots. Compounding this issue, land prices in the prefecture have risen by an average of 20%, further increasing the costs associated with acquiring additional land resources.
TSMC's Chairman, Mark Liu, recently expressed interest in constructing a second facility in Kumamoto Prefecture, which would potentially include TSMC contractors supplying consumables. However, allocating new plots of land remains a challenging task for the prefectural authorities, as a substantial portion of the territory is protected by a special law that restricts urbanization of land. Originally designed to safeguard agricultural activities and small farmers, these restrictions now threaten to impede large-scale investment projects that are critical to the future growth of the Japanese economy.
In the Kikuyo neighborhood, where the TSMC facility is being developed, over 85% of the area is protected by these restrictions. As a result, representatives from the Taiwan Electronic Equipment Manufacturers Association have addressed this issue in discussions with local authorities, hoping to mitigate the problem. To date, TSMC has not yet been able to secure large enough plot of land for a second plant in Japan, with their first site spanning only 21.3 hectares.
Throughout Kumamoto, concerns have arisen regarding public large-scale enterprises consuming its water resources. Despite being rich in underground freshwater sources, the region relies heavily on these resources for agricultural land irrigation. While modern industries strive to reuse treated water as much as possible, local residents remain concerned about the risk of potentially harmful emissions caused by the upcoming facility.
Nonetheless, the TSMC facility offers significant economic benefits to the local community, with the potential to provide employment opportunities for up to 1,700 local residents. Without these opportunities, many individuals would otherwise be limited to agricultural work or be forced to search for work in other, sometimes distant, regions of Japan.