The chip alliance between Taiwan and Japan, sparked by Taiwan's TSMC building a plant in Kumamoto Prefecture, is now lifting the "Silicon Island" of Kyushu, the southern island where Kumamoto sits. Following TSMC, Taiwanese chip partners are moving into Japan, and Japan is answering with tailored support, driving a rapid deepening of ties between the two.
According to Japan's Nikkei on the 24th, Itochu Techno-Solutions (CTC), a system integration firm and subsidiary of Japan's Itochu, recently set up an information-technology joint venture with Taiwan's Systex in Fukuoka. The venture will provide system development and network-equipment procurement services to Taiwanese companies expanding into Japan.
Behind CTC, Japan's second-largest player, teaming up with Systex, Taiwan's largest SI and IT company, lies the rising number of Taiwanese firms entering Japan. Systex builds TSMC's IT infrastructure in Taiwan itself, so the venture targets demand from TSMC's Taiwanese partners to quickly set up infrastructure in Japan as well. Taiwan's Ministry of Economic Affairs said approvals of Taiwanese direct investment in Japan reached 99 cases in 2024 and then hit a record 128 cases in 2025.
Analysts say Japan's "semiconductor courtship," which the government is pursuing with Kyushu as its base, is drawing Taiwanese firms even more strongly. The Japanese government plans to invest 68 trillion yen (about 591 trillion won) in semiconductors through public and private funding by 2040. With its abundant groundwater, the Kyushu region drove the heyday of Japanese chips in the 1980s, giving it an ideal location. When a magnitude-7.1 earthquake struck recently, semiconductor plants in Kumamoto recovered early, which observers said also proved the region's strong disaster resilience.
The semiconductor ecosystem in Kumamoto, the core area of Kyushu, is also cited as a strength. Around Kumamoto are clustered core chip materials, components and equipment firms such as Tokyo Electron and a Sony image-sensor plant, a TSMC customer. Adding large government subsidies to that mix, TSMC has begun building a second plant in Kumamoto and plans to invest 1 trillion yen with Sony to begin mass production of next-generation image sensors from 2029.
A "Kumamoto Science Park," modeled on Taiwan's Hsinchu Science Park, is also taking shape. Japanese real-estate developer Mitsui Fudosan announced last month that it had set up an operating company in Kumamoto Prefecture for the science park, a semiconductor cluster hub, and signed a cooperation agreement with a Taiwanese research institute. Mitsui Fudosan will also establish a Physical AI and Semiconductor Technology Center (PASTEC) within the science park. Cooperation with Taiwan is thus widening beyond chip manufacturing into physical AI.
Security concerns are another factor tightening ties between the two. Taiwan's think tank, the Chung-Hua Institution for Economic Research (CIER), held the "2026 Taiwan-Japan Tech High-Level Forum" on the 21st, putting the need for supply-chain cooperation between the two front and center. Participants shared the view that, with Taiwan's strengths in wafer manufacturing and advanced packaging and Japan's expertise in materials, components and equipment, the two should quickly build a "democratic camp" supply chain through complementary cooperation.
In response, Taiwan's government is adding policy support. Taiwan's Ministry of Economic Affairs said that, through a "Taiwan-Japan Joint R&D Program," it would cover up to 50% of the costs of projects jointly carried out by Taiwanese and Japanese firms in five key industries including semiconductors and AI. At a forum on the 3rd, Taiwan Premier Cho Jung-tai likened Taiwan and Japan, which complement each other in chips, to the "Heaven Sword and Dragon Saber" from the Chinese martial-arts novel of that name.
