According to company executives and government data, Japanese companies are increasing their investments in Taiwan to strengthen ties in the tech supply.
Data from the island’s Investment Commission indicated that foreign direct investment from Japan to Taiwan had increased since 2018, when the sum crossed US$1 billion for the first time in more than a decade, on the way to a record US$1.7 billion last year.
As the supply chains for technology are being realigned, Japanese businesses are now seeking secure locations to expand their operations.
The high-tech gear essential to both economies, such as semiconductor chips, attracts a large portion of Japan’s investment in Taiwan.
A partner with a professional services firm in Taipei stated that Japan, Taiwan’s third-largest trading partner, is “one of the main sources of technology.”
He said Taiwan is a top destination for semiconductors and other components for electric cars and connected devices for Japanese tech firms.
Since the 1980s, Taiwan has positioned itself as a manufacturing hub for producing tech hardware. Nowadays, the technology sector accounts for 30% of the global economy, and Taiwan supplies 60% of the world’s chips, including the most advanced ones.
In addition to technology, Japanese investors have invested in biotech, medical devices, and renewable energy in Taiwan.