An aerial view of TSMC's first factory in Kumamoto, built together with Sony and Denso [AFP]
An aerial view of TSMC's first factory in Kumamoto, built together with Sony and Denso [AFP]

Sony and TSMC plan to invest 1 trillion yen ($6.33 billion) in a next-generation image sensor production facility in Kumamoto Prefecture, Japan, with mass production of image sensor semiconductors targeted to begin in 2029.

Nikkei reported Monday that Sony Group and TSMC have agreed to produce next-generation image sensors at Sony's semiconductor image sensor factory in Koshi, Kumamoto Prefecture. The two companies plan to establish a joint venture this year, with Sony holding roughly a 60 percent stake and TSMC about 40 percent. Nikkei added that the partners are also in talks with the Japanese government over subsidies as they work toward mass-producing next-generation image sensor semiconductors at the Sony facility within three years.

The 1 trillion yen joint venture investment equals four years of capital expenditure for Sony Group's semiconductor division. The total investment in TSMC's first Kumamoto factory stands at 1.35 trillion yen.

Sony Semiconductor holds roughly 50 percent of the global market for CMOS image sensors, which convert light into electrical signals in smartphone cameras and self-driving cars. The joint venture is expected to supply Apple with high-performance camera sensors for the iPhone.

Image sensor semiconductors are widely expected to serve as the "eyes" of physical AI systems, where artificial intelligence controls robots and vehicles. Sony chose to partner with TSMC to widen its technology lead over potential rivals, Nikkei said, noting that China's OmniVision and Samsung Electronics of South Korea have been closing the gap through heavy investment.

Sony's image sensors have maintained a dominant market share in part through their use in Apple's iPhone lineup. Samsung Electronics, the No. 2 player, has been mounting an increasingly aggressive challenge.

Until now, Sony Group developed and mass-produced the sensors while outsourcing computational processing to TSMC under a division-of-labor arrangement. Through the joint venture, the two companies are expected to move to co-production, deepening their technology cooperation and expanding their supply capabilities.

Nikkei noted, however, that Sony does not plan to share its proprietary image sensor manufacturing technology — the core of its competitive advantage — with TSMC.

Kumamoto Prefecture has drawn attention as a semiconductor production hub in Japan thanks to its abundant water resources and low-cost electricity, both essential for chip manufacturing. The prefecture also sources a high proportion of its power from renewable energy, including geothermal and solar.

Sony Semiconductor's factory in Koshi sits about 30 kilometers from the epicenter of a major earthquake that struck last month. Nikkei said no significant damage to the facility from the quake has been confirmed.

Nikkei added that Sony Group and TSMC intend to continue investing in semiconductor operations in Kumamoto Prefecture over the medium to long term.


kate01@heraldcorp.com