According to Nikkei Asia, TSMC previously announced plans to build a second factory in Kumamoto Prefecture, Japan, and many related companies followed suit. But both the company and the Kumamoto prefectural government are currently facing a daunting challenge – land shortage.
TSMC is currently building its first factory in Japan in Kikuyo, a traditional farming town in Kumamoto Prefecture, which has attracted other projects, such as Sony’s massive image sensor plant.
▲ Source: TSMC
At last week’s annual shareholder meeting, TSMC Chairman Liu Deyin said: “From an economic point of view, Kumamoto will be the first choice to build a second factory.” Some suppliers pointed out that TSMC has always liked to build factory clusters rather than a single factory. For example, it is building two adjacent factories in Arizona, USA.
However, current Japanese law restricts development in “urbanization control areas” such as forests and generally prohibits the conversion of reserved agricultural land to other uses. Kumamoto is one of the largest grain-producing areas in Japan. Most of the Kikuyo-cho and surrounding areas are high-quality farmland, and it is difficult to use them for other purposes. 85% of the land in Kikuyo-cho is within the control area.
A survey by Kumamoto Bank late last year found that most companies that had considered expanding to Kikuyo had abandoned the idea due to land supply issues. The Kumamoto prefectural government has drawn up plans to reserve about 20 hectares at four sites for about 10 companies, with the development of the land to be completed as soon as fiscal 2025. But demand for industrial land across Kumamoto Prefecture is expected to reach 101 hectares, and these reserved lands are nowhere near enough to fill the gap.
Kumamoto Prefecture plans to build two industrial parks covering 25 hectares in the area by the fiscal year 2026, with an estimated total cost of 7 billion yen, while TSMC is currently in Kumamoto’s No. One factory covers 21.3 hectares, about the size of four large baseball fields.
