From transportation to education, governments and businesses are gearing up for the arrival of foreign newcomers ahead of the opening of Taiwan Semiconductor Manufacturing Co. (TSMC) plant in Kikuyo, Kumamoto Prefecture.

Hong Konger Wen Shihao, 30, a staff member of Kumamoto Driving School in Kumamoto city’s Kita Ward, near Kikuyo, presents lectures for foreign students.

“People in our classes often need three to four hours to get used to driving here because vehicles are driven on the right side in China and Taiwan,” Wen said. “I especially urge caution when they make right turns because they could enter the wrong lanes.”

Kumamoto Driving School set up an “international” division about five years ago, given the diverse nationalities of its students. Lessons are currently available in seven languages.

Yoshiko Nagata, president of the school operator, said Vietnamese and Nepalese typically take courses there.

But more students from Taiwan started flocking to the school two years ago, when TSMC, one of the world's largest chipmakers, announced plans for the factory in Kikuyo.

The influx of personnel from semiconductor-related businesses and construction companies has led to rush-hour traffic jams around Kikuyo.

Nagata said the company is receiving an increasing number of inquiries about licenses for motorcycles, a popular form of transportation in Taiwan.

Kumamoto Driving School plans to hire a Taiwanese worker because a further surge in students from the island is expected with the opening of the TSMC factory.

NEW STATION, INTERNATIONAL SCHOOL

TSMC is expected to hire 1,700 people for the No. 1 plant. It partially began operations at an office building adjacent to the factory in August 2023.

The industrial land management department of Kumamoto Prefecture said 750 TSMC employees and family members arrived in Kumamoto city, Kikuyo town and elsewhere by autumn.

The company also plans to open a No. 2 plant in Kumamoto Prefecture in 2027.

To deal with the projected influx of residents, a new station in Kikuyo will be built along the JR Hohi Line just 1.3 kilometers from neighboring Sanrigi Station.

The Kikuyo town government requested the new stop.

In February, Kyushu Lutheran School in Kumamoto city’s Chuo Ward was finishing the interior of an international educational institute for elementary school children.

Michiaki Matsumoto, the Kyushu Lutheran College president responsible for opening the elementary school in April, said the initial plan was to cater only to students of junior and senior high school age inside existing facilities.

But as details of TSMC’s expansion were revealed, the school operator learned that many overseas parents with younger children would be entering the prefecture.

After a request by the prefectural government, Kyushu Lutheran School decided in December 2022 to introduce an elementary school for international children and embarked on soliciting teachers.

SKYROCKETING LAND PRICES

Construction of apartments and homes has continued at a rapid clip as housing demand is expected to grow in the Kikuyo area.

Three three-storied residential complexes were being built in early February on a hill in neighboring Ozu town.

Kumamoto-based Meiwa Real Estate, which manages the apartments, said most of the areas around the construction site were previously home to rice paddies and agricultural fields.

Real estate agencies started vying for properties in the area after TSMC’s plans were announced.

Meiwa Real Estate used to do business primarily in Kumamoto city, but it opened a branch in Kikuyo last fall.

The branch’s head, Kentaro Nishida, said demand for housing has “more than doubled” there, outstripping supply.

Monthly rents for a new single-bedroom apartment with a living-dining area and kitchen have jumped by at least 10,000 yen ($66) from the previous standard of less than 60,000 yen.

“The booming demand will continue for some time,” Nishida said.

Nishida mentioned future plans to provide more housing complexes fitted with restaurants and other stores, which are still quite rare in the area.

The benchmark land price for the commercial district in Ozu had risen 30 percent year on year by summer 2023, the highest gain among all surveyed points across Japan.

Industrial land prices in Ozu surged by the second largest rate nationwide.

Farmers near the TSMC site are increasingly concerned about a possible paucity of agricultural sites and the termination of farming land lease contracts.

To address such concerns, Kumamoto Prefecture has instituted a system to effectively share information with surrounding municipalities.

INVESTMENTS ENTICED

Private think tank Kyushu Economic Research Center estimates an economic ripple effect of 10.5 trillion yen through 2030 from the new semiconductor-related enterprises in Kumamoto Prefecture, including the operation of TSMC’s No. 2 factory.

The impact of TSMC’s expansion is already apparent at the prefectural capital.

A group of Taiwanese entrepreneurs toured unoccupied properties in the city’s urban center toward the end of 2023, accompanied by officials from the municipal government and a real estate agency.

They intend to create a “Taiwan town” for sales of Taiwanese food and other items.

Sun Zheng-qiang, chairman of Toplus Group, which runs a wedding hall, restaurant and other businesses, said he wants to build a shopping mall in the city.

“Kumamoto is drawing considerable attention from parties the world over,” he said. “I want to promote Taiwan here in front of people from across the globe.”

Toplus already has outlets in China and Hokkaido.

A different Taiwanese enterprise had already made inroads in Kumamoto.

Chen Jia-wen, head of Taiwan’s CTBC Financial Holding Co., visited Japan in December 2023 to celebrate the opening of the Kumamoto branch of affiliate Tokyo Star Bank Ltd. in a new office building near JR Kumamoto Station.

“As you all know, a huge amount of investment has come in as a result of TSMC’s introduction of a factory in Kumamoto,” said a beaming Chen.

It was the bank’s first new base in five years and the only one located west of Kobe. Tokyo Star Bank doesn’t even have an office in Fukuoka, the most populous city in Kyushu.

Two of the new branch’s four staff members are Taiwanese.

“Not only TSMC employees but also companies constituting its supply chain will be reaching here,” Chen said. “I am certain that Kumamoto will develop dramatically in the next 10 years.”

(This article was written by Kikuma Morikita and Nami Sugiura.)