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According to a report from Commercial Times, citing NHK, TSMC’s first factory in Kikuyo Town, Kumamoto Prefecture, began mass production in December 2024. Many had anticipated that TSMC’s presence would help boost the local economy. However, the report points out that recent data has revealed an unexpected surge in corporate bankruptcies in Kumamoto in 2024.
As the report notes, the number of bankruptcies involving companies with debts exceeding JPY 10 million reached 80 cases, marking the highest level in 12 years. Notably, nearly half of these bankruptcies involved businesses that had been operating for over 20 years, as indicated by the report.
However, the report also highlights that despite the rise in bankruptcies, the total amount of liabilities decreased to JPY 8.789 billion, down approximately JPY 3.5 billion from the previous year, suggesting that most of the bankruptcies involved smaller businesses.
The report, citing Tokyo Shoko Research, notes that this wave of corporate failures may be rooted in the lingering impact of the COVID-19 pandemic. The pandemic caused many businesses to fall short of their expected performance, leading to mounting debts and, ultimately, financial distress.
Challenges for Kumamoto Possibly Resulted from the Expansion of TSMC
Additionally, the NHK report, citing the Kumamoto branch of Teikoku Databank, highlights that TSMC’s rapid expansion in the region has intensified competition for skilled workers. The report further suggests that in 2025, external challenges such as labor shortages and rising prices are unlikely to see significant improvement, which could lead to a continued, gradual rise in corporate bankruptcies.
A report from Yomiuri Shimbun also notes that TSMC’s presence in Kumamoto has led to a substantial influx of workers from abroad. The Yomiuri Shimbun report further highlights that as the semiconductor sector in the region continues to expand, the trend of increasing foreign labor and international migration to Kumamoto is expected to persist. However, as the report points out, this rapid demographic shift also brings challenges, such as housing shortages and the integration of foreign workers into the local community.
Record High Number of Foreign Workers in Kumamoto
As indicated by another report from Commercial Times, citing Kumamoto Asahi Broadcasting, the number of foreign workers in Kumamoto Prefecture has reached an all-time high. Citing the Kumamoto Labor Bureau, the report states that as of the end of October 2024, the number of foreign workers stood at 21,437, marking an increase of 3,211 compared to 2023.
According to the report from Kumamoto Asahi Broadcasting, Vietnamese workers made up the largest group by nationality, followed by Filipino and Indonesian workers. Meanwhile, the number of Taiwanese workers has increased significantly since 2023, largely due to TSMC’s expansion in the region.
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(Photo credit: TSMC)
