The world's largest contract chipmaker, Taiwan's TSMC, opened its first ever factory in Japan on Saturday. The plant is situated in the southwestern prefecture of Kumamoto. Attention is focused on whether the company's arrival can help revive Japan's semiconductor industry.

TSMC will operate the plant as a joint venture named JASM, together with partners, electronics giant Sony Group, auto parts maker Denso, and Toyota Motor.

The opening ceremony was attended by top officials from the companies and Japan's Economy Minister. Japanese government subsidies have covered about 40 percent of the cost of the plant.

At Saturday's ceremony, TSMC founder Morris Chang said in his speech, "I came to the opening of JASM today with pride and pleasure."

Production will start later this year. The Taiwanese firm has already announced it will build a second factory in the same prefecture.

The company says total investment for both plants is over 20 billion dollars, while Japan has unveiled plans for an additional investment of about 4.8 billion dollars for the second plant.

Japanese Economy, Trade and Industry Minister Saito Ken said, "Semiconductors are key strategic products for Japan's industrial competitiveness and economic security. This first plant opening is extremely significant in providing a missing piece of Japan's semiconductor sector."

TSMC's arrival has also boosted investment by domestic chip-related firms. But analysts say the global competitiveness of Japan's semiconductor industry, apart from some equipment makers, has been declining.

There is also a shortage of engineers. It is unclear whether the entry of TSMC, along with its expansion plans, will be enough to open a new era for the industry.

The Japanese government says it aims to rebuild the country's position as a leading chip-making hub, to ensure a stable supply of semiconductors amid rising trade tensions between the US and China.