Japan’s investment in Taiwan nears US$900 million, with focus on semiconductors, AI and renewable energy
The Japanese Chamber of Commerce and Industry in Taipei says Taiwan and Japan have complementary strengths in technology clusters, key materials and manufacturing equipment, creating room for deeper cooperation.
Japanese companies’ direct investment in Taiwan totaled nearly US$900 million in 2025, with investment gradually expanding beyond traditional market entry strategies into semiconductors, artificial intelligence (AI), precision machinery and renewable energy. The Japanese Chamber of Commerce and Industry in Taipei said Taiwan’s technology industry clusters complement Japan’s strengths in key materials and manufacturing equipment, leaving room for closer cooperation.
According to a Central News Agency report on Oct. 31, the chamber’s 18th white paper said Japanese companies made 271 direct investments in Taiwan in 2025, with total investment nearing US$900 million. The chamber said the number of investments reflects broad interest among Japanese companies in Taiwan’s market, while investment targets have become increasingly diverse over the past three to five years.
In addition to traditional investments aimed at entering Taiwan’s market and expanding sales, Japanese companies have in recent years shown greater interest in semiconductor- and AI-related materials, equipment and precision machinery, as well as renewable energy, net-zero transition initiatives, healthcare and long-term care.
The chamber said Taiwan’s strengths include advanced industry clusters, manufacturing capabilities, supply chain flexibility and the speed of commercializing products. Japan, meanwhile, is competitive in key materials, precision machinery, manufacturing equipment, quality management and the long-term stable operation of equipment. Integrating the two sides’ technology and industrial resources could help strengthen the resilience of regional supply chains, it said.
In the energy sector, Japanese companies are also focusing on Taiwan’s supply of renewable electricity and the cost of reducing carbon emissions. The chamber said businesses face challenges not only from the price of renewable energy certificates, but also from the volume of renewable electricity available, ease of access, price predictability and the conditions for power transmission, distribution and grid connection.
The chamber also reiterated recommendations in its white paper for adjusting import tariffs on automotive parts. It called on Taiwan to review tariffs on certain engines and components to help expand vehicle production in Taiwan and improve the industry’s competitiveness. The recommendations are still being discussed with the relevant authorities, however, and no specific policy changes have yet been made.
Japan’s expanding investment in Taiwan reflects the island’s important role in the global semiconductor and technology supply chain. Whether Taiwan-Japan cooperation can extend beyond financial investment into joint research and development, technical standards and cross-border manufacturing strategies will be an important indicator of the future direction of bilateral industrial ties.