TSMC (NYSE:TSM) and Sony Group (NYSE:SONY) are joining forces on a $4.69 billion semiconductor venture in Japan focused on developing and manufacturing next-generation image sensors, with mass production targeted for 2029.
The companies announced the agreement on Tuesday, outlining plans for a new manufacturing operation in Kumamoto, southern Japan, where TSMC already operates its Japan Advanced Semiconductor Manufacturing chip facility.
Sony to take controlling stake in semiconductor venture
Sony will hold the controlling interest in the new company and plans to invest 465 billion yen ($2.92 billion).
TSMC will contribute 282 billion yen to the partnership, giving both companies substantial financial exposure to the development of the new manufacturing operation.
The venture will operate under the name Advanced Vision Semiconductor Manufacturing Corp.
New facility to target smartphone image sensors
The partnership will establish a central facility for the development and production of image sensors designed for smartphones using advanced semiconductor manufacturing technology.
Combining Sony’s position in image sensors with TSMC’s semiconductor manufacturing capabilities gives the companies a shared platform for developing and producing future generations of imaging technology.
The decision to locate the operation in Kumamoto also places the venture alongside TSMC’s existing Japanese semiconductor manufacturing presence.
Government support could contribute to additional funding
Sony and TSMC’s announced investments will account for a substantial portion of the project’s financing, but further capital will be required to reach the planned production capacity.
The companies said they are considering additional funding on the expectation that support from the Japanese government will be available.
For investors, the $4.69 billion commitment represents a significant long-term expansion of the relationship between two major semiconductor industry players. Attention will now turn to additional financing, government support and development of the Kumamoto operation ahead of the planned start of mass production in 2029.
