Japan Drastically Eases Development Regulations to Attract Semiconductors... Lifts Urbanization Control Zones

Temporary Greenbelt Lifted Due to Industrial Land Shortage
Promoting Semiconductor Regional Factory Sites... Aiming to Secure Employment

The Japanese government plans to significantly ease land regulations to attract factories producing key materials such as semiconductors. This decision appears to have been made as other suppliers near Kumamoto, where Taiwan's TSMC has entered, voiced concerns about the shortage of industrial land.

General view of the TSMC semiconductor factory construction site in Kumamoto Prefecture. [Image source=Kyodo News and Yonhap News Agency]

According to the Nihon Keizai Shimbun (Nikkei) on the 4th, the Japanese government intends to lift many of the development restrictions applied to urbanization control areas, which were previously enforced by local governments, allowing the construction of semiconductor factories.

Urbanization control areas refer to temporary greenbelt zones established to curb large-scale land development in suburban areas of cities to prevent indiscriminate development. In principle, without government development approval, new buildings cannot be constructed except for agricultural or public purposes.

Originally, under the "Regional Future Investment Promotion Act," these zones only permitted the establishment of facilities related to food logistics or data centers, supporting businesses that utilize regional characteristics.

This time, the Japanese government plans to revise these regulations to add strategic material factories to the exceptions for development approval. According to the amendment, if a local government determines that factory construction poses no issues from the perspective of regional revitalization or environmental concerns, the urbanization control area can be lifted, allowing the attraction of semiconductor, battery, and bio-related factories.

In the case of farmland conversion, the usual procedure, which takes about one year, will be drastically shortened to four months. To convert farmland for factory use, approvals must be obtained from the local agricultural committee and several ministries. To reduce the time required, the Ministry of Land, Infrastructure, Transport and Tourism, Ministry of Agriculture, Forestry and Fisheries, and Ministry of Economy, Trade and Industry will coordinate to conduct the development approval process simultaneously.

The Japanese government is undertaking this regulatory reform because the semiconductor revival is leading to a concentration of suppliers. However, the area of industrial land in Japan is on a declining trend. According to the Ministry of Economy, Trade and Industry, the nationwide area of industrial land available for lease was about 10,000 hectares (ha) as of last year, which is about two-thirds of the area in 2011.

Accordingly, Nikkei reported that voices demanding the revision of land regulations are rising in Kumamoto, where TSMC has entered. The Kyushu Economic Federation has also requested the government to "ease regulations so that farmland can be swiftly converted to industrial land under national authority." In response, the government has taken out the card of deregulation.

The government will also prepare cross-government support measures for infrastructure development. Prime Minister Fumio Kishida is expected to express his stance on this land reform at the Prime Minister's Official Residence on the same day.

Nikkei analyzed, "With the continued weak yen, an environment favorable for investment is being created in Japan. (The deregulation) seems aimed at promoting local factory sites, leading to securing employment in the regions and wage increases including surrounding industries."

This content was produced with the assistance of AI translation services.