Myoko semiconductor factory revival anchors JPY 600 billion investment plan
- Adam German
- 3 hours ago
- 2 min read
Tower Semiconductor is preparing a major expansion of its Japanese manufacturing operations, including the return of semiconductor production to its Arai facility in Myoko, Niigata Prefecture.
The project will increase capacity for advanced semiconductors used in AI data centres, high-speed communications and next-generation optical connectivity.
Japan’s Ministry of Economy, Trade and Industry certified the company’s supply assurance plan on July 14th.
METI estimates total project costs at approximately JPY 600 billion, with government assistance of up to around JPY 160 billion.
Tower separately describes its own investment as approximately USD 3 billion after accounting for about USD 1 billion in Japanese government grants. The figures use different currencies and reporting methods but relate to the wider expansion across Niigata and Toyama prefectures.
Myoko factory to return to semiconductor production
Tower plans to repurpose its Arai facility in Myoko, formerly known as Fab 6, for 300-millimetre silicon-photonics production and advanced optical packaging.
Manufacturing at the factory ended in July 2022 during a restructuring of Tower’s Japanese operations. Machinery was later sold or transferred, leaving the site outside the company’s active production network.
The investment would therefore restore semiconductor manufacturing at an established Myoko industrial site rather than simply expand an operating factory.
Silicon photonics uses light to move large volumes of data between processors and other components. Demand is increasing as AI systems and data centres require faster and more energy-efficient connections.
METI’s schedule anticipates that supply from Myoko will begin in May 2027.
Tower expects the broader first stage of the expansion to reach full production readiness during the fourth quarter of that year. This suggests that initial supply could begin before the wider programme reaches full operating capacity.
Tower said the investment would support skilled engineering and manufacturing employment while strengthening relationships with suppliers, universities and research institutions.
The company hasn’t disclosed how many new jobs will be created. The regional impact will depend on the scale of local recruitment, procurement and research activity generated as production expands.
Tower will also increase output at its Fab 7 facility in Uozu, Toyama Prefecture.
A proposed additional factory beside Fab 7 would add further capacity, although construction remains subject to the completion of related agreements.
Two Industries Converge on Myoko for Revitalization
The semiconductor project arrives as Patience Capital Group is also investing in Myoko’s tourism economy.
PCG is advancing Six Senses Myoko, a slopeside hotel and residential development at Myoko Suginohara Ski Resort.
Six Senses Myoko exterior CG rendering courtesy of PCG.
Plans include 57 rooms and suites, 21 branded residences, restaurants, a spa and a wider mountain village designed to support year-round activity.
The two investments expose Myoko to industries with different economic drivers.
Tourism can attract visitors, residents and local spending. Semiconductor manufacturing can support skilled employment, suppliers and technical partnerships as seen in Chitose with Rapidus turning the area into Japan’s next semiconductor boomtown.
Neither sector is immune to economic downturns. Together, however, they could make Myoko’s economy more resilient by reducing its reliance on a single industry for regional revitalization.
Further Reading:
METI Certified Supply Assurance Plan for Semiconductors (Japanese only)
