According to the Reiwa 6 Land Price Notice announced on 2024/3/27, the expansion of TSMC, the largest semiconductor manufacturer in Taiwan, has had a major impact on land prices in Kumamoto Prefecture. In particular, commercial areas in Otsu Town and Kikuyo Town had an annual rate of increase of 33.2% for “Kumamoto Otsu 5-1” and an annual rate of +30.8% for “Kikuyo 5-1.” The reason behind this is that TSMC established JASM in November 2021 and announced that it will build a factory in Kikuyo-cho, and the expansion of related companies along with this has had a significant impact. In the 3 years from Reiwa 3, there was an increase in land prices of +60.4% for “Kumamoto Otsu 5-1” and +66.1% for “Kikuyo 5-1.”
The residential area “Kikuyo-301” in Kikuyo-cho also showed an annual rate of increase of +13.3%, ranking second in Kumamoto prefecture. The rise in demand for housing is due to employees of JASM and related companies moving to Kumamoto, and there is an urgent need for new housing supply throughout the region. Since there are many urbanization adjustment zones and the supply of residential land is limited, lack of supply is accelerating the rise in land prices. In particular, 300 engineers dispatched from Taiwan and their families are hoping for new construction or properties within 3 years, so there are an increasing number of cases where second-hand detached houses of about 100 tsubo are being demolished and apartment houses are being built.
Land prices have risen drastically not only in commercial and residential areas, but also in industrial areas. According to the 2023 land price survey, “Otsu (prefecture) 9-1” recorded an annual rate of +31.1%, and “Kikuchi (prefecture) 9-1” recorded an annual rate of +29.2%, making it the first and fourth highest rate of increase nationwide, and it can be seen that the effects of JASM expansion are widespread.
Also, JASM plans to hire 1200 people out of 1,700 employees locally for operation at the end of 2024, and the monthly salary for new graduates is 280,000 yen for college graduates, 320,000 yen for master's degrees, and 360,000 yen for doctorates, which greatly exceeds the average starting salary in Kumamoto prefecture (about 201,000 yen for college graduates, about 207,000 yen for graduate students, and about 182,000 yen for specialist/junior college graduates). Due to this favorable treatment, labor shortages have surfaced within Kumamoto prefecture, and there are concerns about an outflow of human resources even in Oita prefecture, the neighboring prefecture where I live. Following the advance of JASM, Kyushu National University concluded international partnership agreements with Taiwanese universities for research and human resource development in 6 fields such as semiconductors, etc., and Kyushu University also signed an agreement with TSMC on human resource development, etc.
Meanwhile, logistics companies and related companies are expected to be attracted and expanded in Oita Prefecture as well. On April 25, the Ministry of Land, Infrastructure, Transport and Tourism began commercialization studies for early development of the high-standard road “Nakakyushu Road,” which connects Kumamoto City and Oita City. As a result, location needs for logistics bases and semiconductor manufacturing companies in Taketa City and Bungoono City have increased, and it is expected that there will be a positive impact on land prices in Oita Prefecture. The number of companies considering land acquisition across prefectural borders is also increasing, and wide-area economic development is expected.
Land prices in Kumamoto Prefecture have skyrocketed due to the expansion of JASM, and major changes have occurred in the regional economy. In particular, the Tosu area, which is close to Fukuoka Airport and Saga Airport, is expanding one after another because it is relatively inexpensive. The ripple effect of rising land prices extends to neighboring prefectures, and economic revitalization of Kyushu as a whole is expected. Attention will continue to be drawn to how this movement develops.
