(Source: "Global Times" July 24, 2025)
[Global Times reporter Li Meng, Global Times special correspondent in Japan Wang Tianqing, Global Times special correspondent Chen Lifei] Editor's note: In the past few years, Japanese brand stores on the streets and alleys in Taiwan have continued to expand. From the cosmeceutical leader Matsumoto Kiyoshi to the 24-hour discount retailer Don Quijote, and then to the commissioning of Shin-Etsu Chemical's semiconductor factory, the investment of Japanese companies seems to have taken root in many areas on the island. However, under the prosperous business cooperation scene, the actual investment of Japanese capital in Taiwan is quietly changing. Data show that Japan's direct investment in Taiwan in 2024 will be only US$452 million, a sharp drop of 73% from the peak of US$1.7 billion in 2022, and a year-on-year decline of 27%, triggering the market to re-examine the strategic layout of Japanese companies.
Decrease instead of increase
Financial Times 》Recently, it was reported that the U.S. Department of Defense put pressure on Japan and Australia regarding their response responsibilities when "something happens to Taiwan." However, the two countries did not give the answers that the United States expected. According to reports, Japanese government officials are telling Japanese companies operating in Taiwan that if a conflict breaks out across the Taiwan Strait and requires the evacuation of employees, each company must "find its own solution." Data shows that Japan’s investment in Taiwan has declined instead of increasing in recent years. Japan used to be Taiwan's third largest source of foreign investment, but last year's investment amount was US$452 million, a year-on-year decrease of 27%, far lower than the peak of US$1.7 billion in 2022.
According to survey data released by the Imperial Japan Database, as of July 2024, the number of Japanese companies stationed in Taiwan was 2,988, a decrease of 136 companies or 4.4% from two years ago. However, during the same period, the number of Japanese companies stationed in mainland China increased from 12,706 companies in 2022 to 13,034 companies in 2024, showing an opposite trend. From the perspective of industry classification, among Japanese companies investing in Taiwan, manufacturing companies accounted for the most, with a total of 1,156, but the total number decreased by about 5% in the past two years; followed by the wholesale industry, with a total of 877 companies, mainly covering the wholesale of industrial electrical machinery and equipment, industrial chemicals, Food and other fields accounted for 29.4%; there were 373 retail businesses, mainly ramen shops, izakayas and other formats, and also included e-commerce companies such as online shopping services using Taiwan as a "springboard" for the mainland Chinese market; there were 159 financial and insurance businesses, which was also slightly less than two years ago.
Behind the years of investing in Taiwan
Wu Yingjie, a researcher at the Japan Research Center of the w88 casino, told the Global Times reporter that Japanese companies in Taiwan mainly support the development and evolution of many key industries in Taiwan through direct investment, technology transfer and industrial cooperation. Through capital investment, technology transfer, etc., Japanese companies in Taiwan have played an important role in industries such as panels, semiconductors, key materials equipment and components, precision machinery, optics, department store retail, and real estate.
Looking back at history, Japanese investment in Taiwan has roughly gone through three stages: from the 1960s to the 1970s, Japanese companies mainly valued Taiwan’s cheap labor and established manufacturing bases; from the late 1980s to the early 1990s, as the electronics industry took off, Japanese companies’ investment in Taiwan focused on parts and household appliances; from the mid-1990s to 2010, they turned to semiconductors and precision machinery in the high-tech field.
In recent years, Japanese companies’ investment in Taiwan has shown significant development trends in two major areas: consumer products for people’s livelihood and semiconductor supply chains such as TSMC. In the retail market, Japanese brands are actively expanding their channels. Japanese retail giant Muji has continuously expanded its store scale since entering the island in 2004. By 2024, it has opened more than 50 stores across Taiwan. Japanese discount retailer Don Quijote will enter the Taiwan market in 2021 and by 2024 has opened multiple branches in Taipei, Taichung, Kaohsiung and other places. Matsumoto Kiyoshi, the leading Japanese cosmeceutical brand, has opened 24 stores in Taiwan since 2018 as of March 2025. Japanese food brands such as Calbee, Nissin and Yamazaki Bread are also accelerating their expansion in Taiwan.
In addition to food retail, in the semiconductor material supply chain, Japanese companies are also actively investing in research and development and production capacity expansion to strengthen support for advanced processes. For example, Shin-Etsu Chemical Industry is building a new factory at its factory in Yunlin County, central Taiwan, and will start production in 2021.
The "Taiwan-Japan Relations Association" stated that Japan is currently Taiwan's third largest trading partner and one of the main sources of foreign investment and technology, and Taiwan is Japan's fourth largest trading partner. The total w88 volume between the two sides in 2024 will be US$72.297 billion, Taiwan's exports to Japan will be US$25.842 billion, imports will be US$46.455 billion, and Taiwan's w88 deficit with Japan will be US$20.613 billion.
Lin Jinnan, an economist on the island, said that Japan’s declining birthrate and aging population are serious. When the domestic demand market is not strong enough, Japanese companies will inevitably need to develop overseas. The reason for choosing Taiwan as a major market is that, first of all, the w88 between Japan and Taiwan has laid the foundation for long-term cooperation, and people on the island often travel to Japan for tourism and consumption, so Japanese companies are very familiar with the Taiwan market and preferences; secondly, people on the island have sufficient willingness to consume in food and entertainment; finally, Japan's domestic demand market has encountered bottlenecks, and it is imperative to invest overseas. The Taiwan market can serve as a stepping stone for Japanese companies to enter mainland China and other Asian markets.
Wu Yingjie told the Global Times reporter that while Taiwan has introduced a large number of investments from Japanese companies in some key industries over the years, it has also formed a structural dependence on Japanese companies to a certain extent. For example, upstream materials and core technologies such as panels and semiconductors are currently controlled by Japanese companies.
Japan has a precedent in recent years for controlling the upstream raw materials of key industries of its trading partners and putting pressure on them. In July 2019, Japan's Ministry of Economy, w88 and Industry suddenly announced that it would strengthen export controls to South Korea for a variety of materials needed in the semiconductor manufacturing process for smartphones and TVs. Among them, three controlled materials - fluoropolyimide, photoresist and high-purity hydrogen fluoride. Japanese companies occupied 70% to 90% of the international market share at that time, and large Korean companies such as Samsung and LG were highly dependent on Japanese companies for these three materials. This move once caused obvious impact on Korean companies.
Variables in the new w88 environment
w88 statistics released by relevant departments in Taiwan on July 8 showed that the export volume in the first half of 2025 was US$283.26 billion, a year-on-year increase of 25.9%, and the import volume was US$227.55 billion, a year-on-year increase of 20.5%. In June this year, Taiwan’s exports of high-tech products and artificial intelligence-related products performed strongly. In terms of categories, orders for communication products increased by 37.4% year-on-year, and orders for electronic products increased by 35%. By region, orders from mainland China increased by 15.4% year-on-year, orders from the United States increased by 34.8% year-on-year, orders from Japan increased by 38.5% year-on-year, and orders from Europe increased by 2.2%. At the same time, preliminary statistics released by the Japanese Ministry of Finance on the 17th showed that the w88 balance in the first half of 2025 was a deficit of 2.2158 trillion yen (approximately RMB 107.5 billion). As of fiscal year 2024, Japan has experienced w88 deficits for four consecutive fiscal years.
After U.S. President Trump started his second presidential term in 2025, Japan has felt that the international w88 environment has become increasingly harsh. On the 22nd, Trump stated on social media that the United States and Japan had reached the “largest” w88 agreement in history. According to the agreement, Japan will invest US$550 billion in the United States, pay a 15% reciprocal tariff to the United States, and fully open markets in key areas such as automobiles and agricultural products.
Wu Yingjie said that under the current w88 environment, the mentality of Japanese companies investing in Taiwan has fluctuated - the mentality of Japanese companies investing in Taiwan's high-tech industry has experienced a significant evolution from "technological dominant" to "equal collaborator" to "strategic hedging". This change profoundly reflects the structural reversal of the industrial competition and cooperation relationship between the two sides and the impact of geopolitical risks. Since the 2010s, Taiwanese companies have gradually challenged the monopoly of Japanese companies by acquiring Japanese semiconductor and passive component businesses. Japanese companies have shifted from "industrial cooperation" to "risk aversion" in high-tech investment in Taiwan. Due to lack of confidence in the Taiwan market, Japanese companies' strategic contraction intentions have further evolved into direct investment reduction and divestment. On the other hand, Japan still needs the semiconductor production capacity and technology of Taiwanese companies. Japan has actively attracted Taiwanese companies such as TSMC to invest and build factories in Japan, and Taiwanese companies' reverse investment in Japan has surged. Security anxiety caused by geopolitical risks overwhelms business logic, and the decrease in direct high-tech investment by Japanese companies in Taiwan will continue.
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