Competitive pay at TSMC plant may ripple across Japan, beat inflation

The world’s leading contract chipmaker, Taiwan Semiconductor Manufacturing Co., could infuse new momentum into pay hikes that outpace price increases in inflation-plagued Japan, an essential element Prime Minister Fumio Kishida has long pursued.

TSMC’s generous compensation packages to recruit for a new plant in Kikuyo, Kumamoto Prefecture, can serve as a wakeup call to manufacturers not just around the area but in other regions of the country, economists say.

The spillover effect will be critical as the world’s third-largest economy is at risk of stagflation if wage hikes continue falling behind price rises.