Chip Cities Rise in Japan's Fields of Dreams

(bloomberg.com)

108 points | by rbanffy 3 days ago ago

52 comments

  • wenc 13 hours ago

    Chitose (pop. 98k), though remote, is about 45 minutes by train -- with frequent service -- from Sapporo (pop. 2 mil), which is a fairly big city.

    This is similar to the commute from Chicago (pop. 2.7 mil) to Downers Grove (pop. 49k), which was my commute. I didn't care to live in the Chicago suburbs, but I didn't mind working out there while living in downtown Chicago.

    I can see a young family living close to Sapporo, but parents working at TSMC.

    The other TSMC facility in Kumamoto (pop. 738k) on the other hand is 2 hours from the nearest big city, Fukuoka (2.5 mil). Kumamoto is actually a less tenable location for talent. Yet things seem to be working out (the current workers there are mostly Taiwanese expats though).

    • akg_67 6 hours ago

      > Chitose (pop. 98k), though remote, is about 45 minutes by train -- with frequent service -- from Sapporo (pop. 2 mil), which is a fairly big city.

      > I can see a young family living close to Sapporo, but parents working at TSMC.

      The Chitose factory is not being built by TSMC, it is a Rapidus venture (IIRC Toshiba/Kioxia is one of the partners). They just received delivery of first EUV from ASML this week.

      No one with young family will live in Sapporo, too far specially during 5 months of winter when train disruptions/cancellations are frequent due to excessive snow/blizzards. For example, just this week, every day JR trains were cancelled and/or fewer trains were in operation, it snowed every day and temperature below zero.

      Most permanent workers will likely live between Kita Hiroshima (Ohtani's Japanese Pro baseball team new stadium located there) in the north and Tomakomai in the south.

      Sapporo population is less than 2 millions and declining (1,969,058 in March 2024 declined from 1,972,381 in April 2022). All municipalities within Hokkaido prefecture have declining population, only exception recently was Eniwa (near Chitose) where population increased by couple of dozen people, increase attributed to enrollment of international students in the area after lifting of COVID restrictions.

      > The other TSMC facility in Kumamoto (pop. 738k) on the other hand is 2 hours from the nearest big city, Fukuoka (2.5 mil). Kumamoto is actually a less tenable location for talent. Yet things seem to be working out (the current workers there are mostly Taiwanese expats though).

      Kumamoto is actually better/preferred location for Taiwanese expats, from proximity to Taiwan and warmer weather perspective, only little over an hour away from Fukuoka by Shinkansen. In comparison, Hokkaido is too cold and isolated, no high speed rail link to Chitose/Sapporo area or to mainland (Honshu).

      Source: Live in Sapporo, also have lived in Ottawa, Toronto, and Seattle; was approached earlier this year by someone on HN for onsite role with a Rapidus US supplier.

    • thrdbndndn 8 hours ago

      > The other TSMC facility in Kumamoto (pop. 738k) on the other hand is 2 hours from the nearest big city, Fukuoka (2.5 mil). Kumamoto is actually a less tenable location for talent.

      To be blunt, this is a ridiculous comparison. Kumamoto is a large city in its own right, with a very high quality of life. It may not be as close to Fukuoka, but it offers plenty for residents itself.

      On the other hand, Chitose, while close to Sapporo, is much smaller and doesn't offer the same level of living quality. Sapporo itself, though big, is pretty isolated compared to other parts of Japan, too.

      Also most people would probably prefer the milder, more temperate weather of Kyushu over Hokkaido's harsh winters.

    • klausa 12 hours ago

      I imagine if I was from Taiwan; Kumamoto would be much more attractive based on climate alone.

      Sapporo gets cold.

      • pezezin 10 hours ago

        I mentioned it in another comment: I am working in Aomori and my company struggles to find qualified engineers because few people want to live here. The climate is a MAJOR issue.

        Kyūshū looks like a much more attractive option.

        • wenc 9 hours ago

          Aomori pop 270k is different — it is somewhat less desirable to someone like me than somewhere close to Sapporo. I don’t think it’s the weather. It’s the isolation.

          Most Asian people love living around others. We crave the human energy, the hustle and bustle of economic activity, the opportunities, the food, etc.

          Climate is something one lives with. Given the choice between Bakersfield CA and Chicago, I’d choose Chicago any day, only because the opportunities are greater in Chicago. I absolutely loved living in Chicago. Even Seattle where I live now is too small for me.

          • maeil 7 hours ago

            > Most Asian people love living around others. We crave the human energy, the hustle and bustle of economic activity, the opportunities, the food, etc.

            Any statement starting with "Most Asian people" that doesn't end with something like "have two arms and two legs" can be discarded. 4.6 billion people, many of whom are culturally as close to each other as they are to someone from Sweden.

            Even here in Seoul, one of the more populous cities, so many people would move in a heartbeat if they could keep the same job and e.g. education for their children. They certainly don't love it.

          • pezezin 7 hours ago

            1) Asian where? Asia spans from Japan to Turkey.

            2) The weather is definitely a big factor. The cold, some of the highest amount of snow fall in the world, strong winds, and houses without insulation make for a poor combination. It is so nasty that even the colleagues from Northern Europe were complaining. But it doesn't matter if you like or not; what matters is if the average Japanese person likes it, and they don't. When I travel around Japan and tell people where I live, they are always shocked and ask me what am I doing in such a cold place.

          • lotsofpulp 6 hours ago

            > Climate is something one lives with. Given the choice between Bakersfield CA and Chicago, I’d choose Chicago any day, only because the opportunities are greater in Chicago. I absolutely loved living in Chicago. Even Seattle where I live now is too small for me.

            The data on population changes in the USA indicates the people want to avoid freezing temperatures over hot temperatures.

            • ghaff 2 hours ago

              >The data on population changes in the USA indicates the people want to avoid freezing temperatures over hot temperatures.

              That data is probably at least somewhat biased by retirees who turn the air conditioner on and don't want to deal with some of the inevitable physical demands and transportation difficulties associated with snow.

      • rjsw 9 hours ago

        Some people like the cold. Being able to go skiing after work would be an attraction to me.

      • wenc 9 hours ago

        Eh. Sapporo goes down to -10C (14F). That’s nothing for anyone who’s ever lived in Canada or the northern US (apart from Seattle).

        Source: personal experience.

        Taiwanese people will move to where the opportunities are. You’ll find many of them in the northern US states, which are, if not snowier, are definitely colder than Sapporo.

        • ghaff 2 hours ago

          There's probably something of a California (or at least West Coast) bias on this board. But much of the US is less moderate in overall climate, towards both cold/snow and heat at various times of the year.

          A large portion of the US has real winters. (And some of those areas get pretty hot and humid in the summer--like, umm, Tokyo.)

    • xigency 7 hours ago

      > I didn't care to live in the Chicago suburbs, but I didn't mind working out there while living in downtown Chicago.

      I hear this a lot, but I'm quite the opposite. The suburbs are nice and quiet and I can go to the city for anything I need if ever.

      Similarly, I will say that the smaller towns in Japan are quite nice and idyllic, and well within reach of the megalopolises by train.

      • EricE 2 hours ago

        Yes - if Cities were so inherently attractive why did so many willingly flee them during the pandemic and not return?

        • dukeyukey an hour ago

          Probably because the things that make cities attractive were literally outlawed during COVID?

        • ghaff 2 hours ago

          Different strokes for different folks. There's an attraction to having more space/less noise/etc. and being able to travel into a big city for activities without too much hassle/time. There's also an attraction to having a probably smaller place and just walk/cab/transit to those activities.

          I ended up mostly gravitating to the former but I understand the attraction of the latter and, who knows, I may change my preference some day.

    • majormajor 12 hours ago

      2mil isn't a small town but it's not that big a city, especially if it makes up most of the metro area around it.

      According to https://en.wikipedia.org/wiki/List_of_metropolitan_areas_in_... the Sapporo metro area is 2.7M. Is that correct? Looking at the map the area between those two places looks a lot sparser, so it seems like definitely more of a small town by a small-to-mid-size-city vibe.

      The Chicago metro area is 9.6M per https://en.wikipedia.org/wiki/Chicago_metropolitan_area so that comparison feels pretty off.

      I think a lot of people would take living directly in a 738k city over living 45minutes from a 2mil population city in a <100k city.

      <100k cities are SMALL.

      • jmillikin 12 hours ago

        Sapporo is denser than an American city would be with the same population, for cultural and geographic reasons. And in Japan it's common to have a train commute of 30-60 minutes, though living in Sapporo and commuting to a suburb might be considered more of a "reverse commute" (other direction is more common here IME).

        Not to mention that Chitose is where Sapporo's international airport is located, so someone who travels often might find it more convenient than living in Sapporo proper.

        • pezezin 11 hours ago

          Sapporo might be denser that the average American city, but it is still endless urban sprawl. It is nothing like Tokyo or Osaka.

      • bugglebeetle 11 hours ago

        Sapporo/Hokkaido is traditionally where many people in Japan flee from various of life’s foibles and circumstances, so it’s a wonderful city with many colorful characters and great food.

    • nikanj 2 hours ago

      Kumamoto is in the same ballpark as many European capitals, such as Athens, Helsinki. Most people don't consider those cities "too small to attract talent"

  • Animats 11 hours ago

    This is encouraging. Hopefully it will be a success.

    It's good that the fabs are so far apart. No one disaster or attack is likely to hit both. Have to think about that now.

  • teractiveodular 12 hours ago

    Japan has a long and storied tradition of pumping immense amounts of government cash into failures. Off the top of my head, there's hydrogen fueled vehicles, fast breeder reactors, and more or less every Japanese attempt ever at exporting its own computing standards.

    • starspangled 9 hours ago

      Japan has a much lower government expenditure as a proportion of GDP than many European countries like Germany, France, Italy, Sweden, Spain, Austria, etc., and has much better public infrastructure and services like transport and healthcare than USA.

      Governments by nature are wasteful, corrupt, and incompetent, sure, but is Japan really particularly bad? You could point to spectacular high speed rail failures in USA or a healthcare system which costs double per-capita as other developed countries for much worse outcomes in most objective measures of public health, incredibly expensive violent and ultimately failed attempts to "export democracy" to places like Afghanistan, and on and on.

      So... yes maybe it does, but it seems misleading to make a comment like that unless you can say how it's particularly worse than any other government's waste and failure.

      • teractiveodular 6 hours ago

        I'm not talking about healthcare etc or claiming Japan as a whole is bad/worse, I'm simply stating that the Japanese government's industrial policy of trying to pick winners has a long track record of subsidizing losers instead. Any (recent-ish) counterexamples you'd like to point out?

        • starspangled 4 hours ago

          > I'm not talking about healthcare etc

          Healthcare is an immense government expenditure though, vastly, vastly bigger than your examples, and I would say US government pumping in a trillion dollars every year for a substandard result fits the your description pretty well.

          > or claiming Japan as a whole is bad/worse,

          Oh. Well then as I said your comment seemed a bit strange to me if it isn't notably worse than other countries, I thought it implied that Japan is notably bad, but if not then carry on.

          > I'm simply stating that the Japanese government's industrial policy of trying to pick winners has a long track record of subsidizing losers instead. Any (recent-ish) counterexamples you'd like to point out?

          Counterexamples for what? I didn't say Japan's government isn't incompetent and/or doesn't take risks on investing in long shots, like other governments, so I'm not claiming there is no such long history. What I was asking is what makes Japan particularly bad, but you say it's not so I don't really have more to say.

        • wezdog1 5 hours ago

          Broken clocks

      • Dalewyn 6 hours ago

        >Governments by nature are wasteful, corrupt, and incompetent, sure, but is Japan really particularly bad?

        It's not that their government is particularly bad, it's their culture that is particularly bad.

        To give you some idea: Japan still thinks metaverse is the bleeding edge of tech and wants to become its leader. Also more fundamentally, Japan thinks they can become the leader in the "AI" industry despite literally only being a consumer and not a producer.

        Japanese persons are some of the most clever, skilled, innovative bunch of gentlemen that humanity has ever known, but Japanese people are some of the most closed-minded, incompetent, bass ackwards bunch of misfits that humanity has ever known.

        Note: I'm Japanese(-American), I will take every justifiable opportunity to shit on my fellow people because they deserve it.

        • starspangled 6 hours ago

          > It's not that their government is particularly bad, it's their culture that is particularly bad.

          Well we were talking about the government being bad, so are you agreeing with me here or disagreeing?

          > To give you some idea: Japan still thinks metaverse is the bleeding edge of tech and wants to become its leader. Also more fundamentally, Japan thinks they can become the leader in the "AI" industry despite literally only being a consumer and not a producer.

          When you say "Japan thinks", do you mean government, bureaucrats, and some dinosaur corporations? Because I assure you western governments and non-US corporations all over the world think they can become leaders in "AI". It was only a few years ago that incompetent bureaucrats in major western cities finally gave up talking about using blockchain technology to make their cities run better.

          > Note: I'm Japanese(-American), I will take every justifiable opportunity to shit on my fellow people because they deserve it.

          You're looking specifically at the computer technology field where USA is an outlier that does well, so I'm not sure you have the necessary perspective. Though even USA has big failures there, the loss of semiconductor manufacturing leadership and attempts by government to prop it up, for a topical example.

          > Japanese persons are some of the most clever, skilled, innovative bunch of gentlemen that humanity has ever known, but Japanese people are some of the most closed-minded, incompetent, bass ackwards bunch of misfits that humanity has ever known.

          I assure you this is what many westerners (including or probably I should say particularly Americans) think about their government and people at large.

          • Dalewyn 5 hours ago

            >Well we were talking about the government being bad, so are you agreeing with me here or disagreeing?

            Government is merely an expression of the underlying society and culture.

            >When you say "Japan thinks", do you mean government, bureaucrats, and some dinosaur corporations?

            Yes and also all the others.

            >You're looking specifically at the computer technology field where USA is an outlier that does well,

            Japan has gained the throne of countless industries and then squandered them time and time again. I'm not merely speaking of IT or industrial electronics, which they also gained the thrones of and then squandered.

            Among other things: Consumer electronics (eg: mobile phones, TVs, etc.), household appliances, cars, aviation/aeronautics, medicine, pop culture (eg: anime, video games, music, etc.), and more.

            Consider that Japan literally owns the CPU architecture found in practically every mobile device (Softbank owns ARM) and they can't figure out how to fucking succeed. Japan's proud tradition of clutching failure from the jaws of success are rooted in problems with their very culture itself.

            • starspangled 4 hours ago

              > Government is merely an expression of the underlying society and culture.

              That didn't answer the question though, it didn't address the discussion of the thread you replied to.

              > Yes and also all the others.

              Okay, well that's no different from other countries then.

              > Japan has gained the throne of countless industries and then squandered them time and time again. I'm not merely speaking of IT or industrial electronics, which they also gained the thrones of and then squandered.

              Same old story everywhere else then. Britain was once the textile manufacturing powerhouse of the world. USA once made the best automobiles.

              > Among other things: Consumer electronics (eg: mobile phones, TVs, etc.), household appliances, cars, aviation/aeronautics, medicine, pop culture (eg: anime, video games, music, etc.), and more.

              Many examples of such things in countries everywhere.

              > Consider that Japan literally owns the CPU architecture found in practically every mobile device (Softbank owns ARM) and they can't figure out how to fucking succeed.

              ARM is doing pretty well. It's the object of desire of Nvidia, Apple, China, Qualcomm, and more. Between x86 and riscv and its warring customers it does find itself in a competitive and difficult environment to be sure. Not sure what you mean there.

              > Japan's proud tradition of clutching failure from the jaws of success are rooted in problems with their very culture itself.

              I'm still not seeing what's special about Japan here. Things rise and fall. Phones? Finland had Nokia and messed that up so badly it's laughable. Canada had BlackBerry and did the same. Chinese companies haven't been able to beat out Apple and Samsung...

              Japan makes some good stuff. Cars, motorbikes, engines, electronics, video games, sensors, lenses, cameras, machinery and tools.

    • Hilift 11 hours ago

      I wouldn't classify hydrogen as "failed" yet. Much of today's industry runs on natural gas. However after many large companies converted to using natural gas in the 1990's, it was almost a disaster due to the price of gas rose dramatically, peaking around 2005 several times today's price. That's ancient history now, but at the time it looked like natural gas was doomed. Then fracking blew the economics away. If the price of gasoline or diesel did what happened to natural gas, there would have been riots. https://www.macrotrends.net/2478/natural-gas-prices-historic...

      • pjc50 8 hours ago

        Hydrogen is just greenwashing for natural gas. No CO2 at the point of use .. but it's dumped into the atmosphere somewhere else when the hydrogen is made from natural gas.

        You can make it from electrolysis, but it's much more expensive to do so, so that won't happen.

        • ben_w an hour ago

          > You can make it from electrolysis, but it's much more expensive to do so, so that won't happen.

          I'm not convinced by that. The cheaper electricity gets, say the way PV is absurdly cheap these days, the less the inefficiency of electrolysis matters.

          What doesn't change with cheaper PV etc. is that hydrogen is so hard to work with or store, both as a gas and as a liquid.

          I can't rely on my gut feelings or comparisons to e.g. the space shuttle external fuel tank to say if these problems can be "solved" well-enough at an acceptable cost, as I've only got a GCSE in chemistry from the turn of the millennium.

        • defrost 8 hours ago

          Already happening and underway with plans to scale up to current non-green hydrogen global production levels and then beyond.

          * Central Queensland Hydrogen Project (CQ-H2)

              A large-scale project that aims to produce 200 tonnes of green hydrogen per day by 2029 and 800 tonnes per day by 2031. The project will supply hydrogen to an ammonia production facility in Gladstone and may eventually export it to Japan
          
          * Project Yuri

              A commercial-scale hydrogen electrolyser project at Yara's Pilbara fertilizer plant that is currently under construction.
          
          * Arrowsmith Hydrogen Project-HP1

          * ATCO-Hydrogen-Blending-Project

          * Australian Renewable Energy Hub

          * Boolathana Project.

          See: https://www.dcceew.gov.au/energy/hydrogen

        • fc417fc802 7 hours ago

          > but it's much more expensive to do so, so that won't happen.

          It's the exact same story for any other subsidized technology at the beginning. If it were already cost competitive then the switch would likely already have happened. One of the common arguments against electric cars used to be that you were still burning coal or natural gas at the end of the day.

          The technology hasn't remained static either. I barely follow hydrogen stuff but I recall there were several notable advancements in catalysis from various precursors over the past several years.

          It's exactly the sort of medium to long term gamble that it makes sense for a government to invest in but likely doesn't for a corporation on its own.

      • Tade0 10 hours ago

        Hydrogen is already the cheapest it will ever be, as it's made primarily from natural gas.

        There's of course so-called white hydrogen:

        https://hydrogeneurope.eu/excitement-grows-about-natural-h2-...

        But known reserves are really small compared to those of natural gas.

    • gkanai 8 hours ago

      In this case, semiconductors are a segment which Japan was leading back in the 80s. And Japanese inputs have been continuously critical for even today's leading edge semis from TSMC as well as for others like from Samsung or AMD.

      So if the Japanese govt. is going to 'bet' on anything, then betting on a segment where Japanese inputs are critical, and where Japanese companies had led the world previously, is a safer bet than a segment where there is no history or inputs.

    • nnm 11 hours ago

      The projects might fail, but knowledge accumulated and scientists / engineers created from them can bring success to other areas

      • roenxi 11 hours ago

        If you define failure as a form of victory then success is inevitable. However, in the spirit of some vague sense of accountability, it seems like an unreasonable position.

        • zombiwoof 9 hours ago

          If failure is defined and victory and one succeeds do they actually fail

        • Epa095 10 hours ago

          > If you define failure as a form of victory then success is inevitable.

          No, you can also do just enough to slumber away in mediocracy forever.

      • Dalewyn 6 hours ago

        >knowledge accumulated and scientists / engineers created from them can bring success to other areas

        Japanese companies and institutions hate sharing knowledge (read: trade secrets) with each other.

    • leoc 12 hours ago

      The Fifth Generation https://en.wikipedia.org/wiki/Fifth_Generation_Computer_Syst... was another notable failure. OTOH MITI did also organise the Japanese VLSI project https://www.asianometry.com/p/the-rise-and-peak-of-japanese-... https://dspace.mit.edu/bitstream/handle/1721.1/47985/fromimi... , which was apparently a smashing success. (I am not an expert on anything.) On the third hand, according to Johnstone https://www.hachette.co.uk/titles/bob-johnstone/we-were-burn... the success of Japanese consumer electronics had very little to do with MITI and government industrial policy, as MITI despised the consumer-electronics firms and doted on the "real" computer companies.

      Right at the moment I assume that the Japanese government is probably still kicking itself for not spending whatever it took to keep Nikon's EUV-machine development going: apparently Nikon wasn't that far behind ASML. https://www.youtube.com/watch?v=8_OOta7Y6Ik Likely it's determined not to make that mistake again; and it's not as if the US is in any position to complain about Japan having an activist industrial policy in semiconductors at the moment.

    • numpad0 4 hours ago

      This reads like a lossy compression of METI and Sangyo Saisei Kiko("Industry rejuvination body") project criticism. The METI(ministry of economy, trade, and industry) had attempted to intervene to revitalize multiple major Japanese corporations over the past few decades, very few of which saw successes.

      Bureucratic and indecisive nature of managing government employees are often brought up as a contributing factor, which applies to every government decisions ever, so this assertion do need citations to be a valid point in a discussion.

    • tokioyoyo 10 hours ago

      At least they’re trying?

    • m463 10 hours ago

      lol. Reminds me of the story of the couple that went to vegas. The husband gets mad when he finds out his wife spent $200 on the slot machines. She points out that he lost $3000 last year's trip, but he retorts "Yeah, but I know how to gamble!"

      So... they have working bullet trains.

    • tomlockwood 10 hours ago

      And to think, all America has is the banks.

      • lotsofpulp 6 hours ago

        The US’s most valuable bank is only #12 by market cap, and worth an order of magnitude less than the top companies.

        The second most valuable is #25 by market cap.

  • zombiwoof 9 hours ago

    The south one should be closer to Miyazaki or Hyuga and it would be an amazing place to expat/live

  • teractiveodular 13 hours ago