By Rajwa Quasim
Taiwan Semiconductor Manufacturing Co. (TSMC) and Sony announced Tuesday a partnership worth $4.69 billion to develop next generation image sensors. The manufacturing will take place at Kumamoto, Southern Japan with production expected to start in 2029.
According to Reuters, Sony will invest about 465 billion yen ($2.92 billion), while TSMC will contribute around 282 billion yen ($ 1.77 billion), making the combined capital about 747 billion yen or $4.69 billion.
The new manufacturing unit called Advanced Vision Semiconductor Manufacturing Corp., will be based in Kumamoto alongside TSMC’s existing Japan Advanced Semiconductor Manufacturing facility. Under the ownership structure, Sony will hold a controlling stake, leading in product planning and design meanwhile using TSMC’s advanced process technology and manufacturing expertise. The combined strength of two major companies is expected to create demand and attract automotive and robotics sectors. Producing advanced image sensors will be used for gadgets like smartphones.
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According to Yahoo News, Sony will control a stake of 60% and TSMC will own the rest 40% in the venture. Toyo Research Advice analyst Hideki Yasuda said, “This is a virtually risk-free investment for Sony and TSMC. The arrangement eases the capital demands on Sony in a sector where large manufacturing investments are unavoidable, while giving TSMC a dependable source of income.”
When signing a memorandum between the two companies in May, Sony chief executive Hiroki Totoki described the joint venture as the company’s “first step to becoming fab-light.” This is a shift from usually handled sensor research, development and manufacturing in-house.
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The companies are also considering additional funding to reach their planned capacity with the Japanese government support in mind. “Japan’s government will consider providing financial support to the venture,” said Trade Minister Ryosei Akazawa.
The two companies have collaborated before which established Japan Advanced Semiconductor Manufacturing in 2021 under TSMC’s control. It became the first Japanese fabrication plant reaching full-scale output by the end of 2024.
The share prices of Sony climbed by 2.2% and TSMC’s rose up to 1.7% after the announcement.