TSMC made Kumamoto rich. Japanese media revealed the cruel truth behind the prosperity.

It has been five years since TSMC announced in 2021 that it would set up a factory in Kumamoto, Japan. It has driven semiconductor-related companies to set up factories one after another, which not only attracts population migration, but also greatly increases local financial strength. However, this semiconductor gold rush brings joy to some companies and sorrow to others. Japanese media revealed that local traffic congestion has become increasingly serious, land and rental prices have soared, and workers are attracted by high-paying semiconductor companies. Some small and medium-sized enterprises are in trouble and even forced to go out of business.

Japanese media "Yomiuri Shimbun" reported on the 11th that in Kikuyo Town, where TSMC's first factory in Kumamoto is located, during the evening rush hour, traffic jams of hundreds of meters long often appeared on the road in front of the factory. According to statistics from the Ministry of Land, Infrastructure, Transport and Tourism of Japan, there will be 38 major traffic congestion locations in Kikuyo Town and neighboring Aishi City and Otsu Town in 2025, an increase of approximately 40% from 2021.

With the entry of TSMC, the semiconductor industry cluster has expanded rapidly. As of the end of March this year, Kumamoto Prefecture had signed a total of 71 factory agreements with semiconductor-related companies. The local government has also actively promoted measures such as road widening and staggered commuting to cope with the traffic pressure caused by the presence of companies.

This wave of investment boom has also brought demographic dividends to Kumamoto. The latest census shows that compared with 2020, the population of Koshi City has increased by 2,542 people, Otsu Town has increased by 1,728 people, and Kikuyo Town has increased by 1,195 people, ranking among the top three in Kumamoto Prefecture with the largest population growth.

Local finance also benefits. The financial strength index of Kikuyo Town in 2024 reached 0.95, ranking highest in Kumamoto Prefecture, and it has become a municipality that does not need to receive local tax subsidies from 2025; the financial strength index of Otsu Town and Aishi City also reached 0.73 and 0.63 respectively, both higher than the average of 0.36 for cities, towns and villages in the prefecture.

However, the price behind the prosperity is gradually emerging. In the past five years, the average price of residential land in these three areas has increased by about 30% to 50%, and the price of commercial land has climbed to 1.3 to 2.2 times the original price, putting some local property owners under heavy rental pressure.

The Kumamoto Prefecture Federation of Chambers of Commerce and Industry conducted a survey of 489 public institutions in March this year. 88% of them said it was difficult to judge the impact of TSMC's presence. 9% believed that Taiwanese and engineering-related personnel drive accommodation and catering consumption, bringing positive benefits; another 3% pointed out that rising personnel costs and lack of workers have caused negative impacts.

The Otsu Chamber of Commerce and Industry in Kumamoto Prefecture revealed that some local businesses have withdrawn from the chamber of commerce and even closed operations due to rising rents. Some employees have also transferred to semiconductor-related companies for higher wages, causing small and medium-sized enterprises to face the problem of brain drain. Yukihisa Matsunaga, president of the Otsu Town Chamber of Commerce and Industry, said that if small and medium-sized enterprises want to attract talents, they must work hard to improve their competitiveness.

The report pointed out that the economic benefits brought by the entry of the semiconductor industry have not been evenly distributed. Some local people lamented that most of the positive benefits were enjoyed by large enterprises, while the negative impact fell on small and medium-sized enterprises. While TSMC is driving the rapid development of Kumamoto, how to take into account the survival of local residents and small and medium-sized enterprises has also become an issue that local governments must face.