In local governments like Kumamoto, where the number of foreign residents is rapidly increasing (Foreign residents in Kumamoto Prefecture increase by about 15% to a record high 2025-07-07 NHK), businesses targeting foreigners are expanding accordingly. This will be an excellent material for predicting the future of the Japanese economy from the perspective of domestic demand.
1. Overview of TSMC’s Entry into Kumamoto and the Influx of Foreign Residents 
TSMC (Taiwan Semiconductor Manufacturing Company) began construction of its Kumamoto plant under the name JASM (Japan Advanced Semiconductor Manufacturing), with mass production scheduled to begin in December 2024. Phase one alone is expected to create over 1,700 jobs, and plans for a second plant are also underway (honichi.com, ogiu-sr.com).
Following the announcement in October 2021, the number of Taiwanese nationals residing in Kumamoto surged from 233 to 1,753. As of June 2024, there are approximately 27,380 foreign residents in Kumamoto Prefecture, with 10,051 residing in Kumamoto City (panda-f.com). Reports suggest that foreign engineers comprise around 20% of JASM’s workforce, about half of whom are from Taiwan (world-economic-review.jp).
2. Labor Market Impact and Changes in Employment Structure
Amid Japan’s nationwide labor shortage, Kumamoto’s foreign workforce has expanded notably, especially in manufacturing, construction, and logistics. As of October 2024, the number of foreign workers in Kumamoto reached 21,437 (ogiu-sr.com).
Forecasts show that Kumamoto will face a labor shortage of approximately 65,000 workers by 2030, a demand that TSMC-related industries are expected to greatly exceed (chisou.go.jp).
In addition to highly skilled engineers, foreign workers under Japan’s Technical Intern and Specified Skilled Worker programs are supporting the local industries (ogiu-sr.com).
3. Administrative Support and Educational Infrastructure for Foreign Residents
Kumamoto Prefecture and municipalities like Kumamoto City have expanded multilingual support centers and education systems for foreign children. A reduction in consultations at the prefectural level has been attributed to better support systems in each municipality (kumanichi.com).
With the influx of Taiwanese children accompanying TSMC employees, the prefecture requested assistance from the Ministry of Education for more staff and interpreters in public schools (kyobun.co.jp).
4. Expansion of Foreign Resident-Oriented Businesses
(1) Real Estate & Leasing Services
Due to the rising number of foreign engineers and construction workers, real estate agencies have started offering services in English, Chinese, and Vietnamese. Foreign-friendly housing—furnished, no guarantor required—is increasingly available.
(2) Food & Retail
Restaurants offering Taiwanese, Indian, Vietnamese, and Nepalese cuisine have grown in number around Kumamoto City and the Hikarinomori area. These eateries cater not only to foreign residents but also to Japanese consumers, boosting local demand.
Specialty grocery stores and services for international remittance and SIM card sales have also gained traction, forming a small but fast-growing multicultural consumer market.
(3) Education, Medical, and Interpretation Services
With more families settling long-term, the demand for medical interpreters and education services has expanded. Private Japanese-language schools, child education centers, and multilingual startups are emerging.
Due to the sharp rise in Taiwanese children, education services are beginning to include native language instruction and multicultural teaching approaches (diamond.jp).
5. Economic Ripple Effects and the Creation of Local Demand
Estimates show that TSMC and affiliated companies could generate a ¥11.2 trillion economic impact in Kumamoto between 2022 and 2031, raising the prefecture’s GDP from ¥6.4 trillion to over ¥7 trillion (panda-f.com).
Real estate prices have soared—industrial land in Kikuyo Town increased by 31.6%, residential by 9.7%, and commercial by 21.7%. Housing demand for over 1,000 new units has emerged in the region (honichi.com).
In response, both public and private sectors have accelerated investment in infrastructure, transportation, and multilingual communication.
6. Enriched Lives and Emerging Challenges
- Multicultural Domestic Market ExpansionForeign workers and their families are transforming from mere labor resources into long-term residents and active consumers. Restaurants, housing, education, and other services are diversifying, creating structural changes in the local economy.
- Public-Private CooperationMunicipal support systems and private services such as interpreters and housing assistance are evolving in tandem, building a foundation for sustainable settlement.
- Challenges and ProspectsWhile issues remain—labor shortages, housing demands, infrastructure stress—the TSMC-triggered focus on multicultural coexistence offers a strong model for regional revitalization.
Conclusion: TSMC’s Entry as a Glimpse into Japan’s Domestic Demand Future
The arrival of TSMC in Kumamoto has catalyzed not only industrial development but also a broader transformation in how the region engages with foreign residents. Their growing role as workers, consumers, and taxpayers signifies the potential for multicultural domestic demand to serve as a new pillar of local economies.
With coordinated efforts from local governments, businesses, and communities, Kumamoto is shaping what may become a “Kumamoto Model” of economic growth through multicultural integration. As Japan grapples with depopulation and labor shortages, Kumamoto offers a forward-looking example of how foreign residents can help revitalize and sustain the economy—not just as outsiders, but as integral members of society.