As Thousands of Taiwanese Expatriates Move to Kumamoto
Department Stores and Semiconductor Companies Form Dedicated Teams
An Exception in the Department Store Industry, Which Usually Concentrates in Major Cities
The world's largest foundry (semiconductor contract manufacturer), Taiwan's TSMC, has established itself in Kumamoto Prefecture, Japan, revitalizing consumption in the Kyushu region. Notably, while department store sales in Japan tend to concentrate in major cities, Kumamoto has shown signs of recovery.
According to the Nihon Keizai Shimbun, since early this year, several customers have visited the wine section on the basement first floor of Tsuruya Department Store, the only department store in Kumamoto Prefecture, purchasing high-priced wines costing between 100,000 and 200,000 yen (approximately 870,000 to 1,740,000 KRW) per bottle in quantities of dozens. Nihon Keizai reported that these buyers were not locals or foreign tourists visiting Japan, but executives from TSMC or its affiliated companies.
The TSMC factory and nearby residential area in Kumamoto Prefecture, Japan [Image source=AFP Yonhap News]
The construction of TSMC's Kumamoto plant is boosting the local consumption economy. TSMC plans to fully operate the Kumamoto Plant No. 1 by the end of this year. Accordingly, about 750 TSMC employees and their families will relocate from Taiwan to Kumamoto. Including personnel from TSMC's affiliated companies, it is estimated that the number of expatriates could reach several thousand. This can be interpreted as a rapid increase in local consumers.
Tsuruya Department Store reportedly formed a dedicated team last year in anticipation of TSMC's local entry. They organized a team of four sales representatives to handle over 60 semiconductor-related companies that have entered Kumamoto. Since expatriates and their families residing in Japan need to purchase household appliances, bedding, and other items locally, this team was responsible for identifying and placing orders for such demand.
Hakata Daimaru Department Store in nearby Fukuoka City, Kumamoto Prefecture, has also recently appointed dedicated staff to handle business related to semiconductor companies concentrated in Kumamoto. As Taiwanese financial firms prepare to establish branches in Fukuoka City following TSMC and its affiliates setting up bases in Japan, these dedicated staff members are also responsible for related tasks.
The Nihon Keizai Shimbun explained that while the share of department store sales in regional cities in Japan is steadily declining, Kumamoto is showing an exceptional trend. According to the Japan Department Stores Association, the share of department store sales in regional cities excluding the 23 wards of Tokyo, Osaka City, Nagoya City, and other top 10 cities was 24% last year, down 10 percentage points from 33% in 2013, indicating an accelerating concentration in major cities.
Earlier, in March, Akito Kuga, chairman of Tsuruya Department Store and Kumamoto Chamber of Commerce, stated in an interview with the Sankei Shimbun that with the rapid increase of Taiwanese people in Kumamoto, there are plans to apply for the establishment of a "Taiwan Economic Special Zone" to support expatriate settlement and attract tourists. Chairman Kuga said in the interview, "Not only TSMC's Plant No. 1 but also Plant No. 2 is being built, and it is expected that about 10,000 Taiwanese will live here. If Taiwanese people can work with peace of mind, productivity will improve, Taiwanese investment will become more active, and the Kumamoto local plants will be revitalized."
TSMC announced in October 2021 that it would build its first plant in Kumamoto, Japan, and completed the construction ceremony this year. Mass production is planned to start within the year. In February, TSMC announced plans to build a second plant near Plant No. 1, and there are also discussions inside and outside Japan about the possibility of TSMC building a third plant in Kumamoto.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
