Sony $SONY Semiconductor Solutions and TSMC $TSM signed a memorandum of understanding on Friday to form a joint venture aimed at developing and manufacturing next-generation image sensors in Japan, the companies said.
Sony will be the majority and controlling shareholder of the venture, which will establish development and production lines in Sony's newly constructed fabrication plant in Koshi City, Kumamoto Prefecture. According to the companies, the deal is structured so that Sony's strengths in sensor design and TSMC's deep knowledge of advanced fabrication processes can be brought to bear together.
Investment levels within the venture are still under discussion; separately, Sony is also planning additional capital outlays at its Nagasaki facility. Both spending programs would be rolled out incrementally as market conditions warrant, the companies said. Japanese government backing is an underlying assumption for both investment tracks, the companies noted.
Beyond image sensing, the venture has set its sights on physical AI use cases, including vehicles and robotic systems, the joint statement said. The establishment of the venture remains subject to a definitive legally binding agreement and the satisfaction of customary closing conditions.
"This JV is a significant initiative that brings together the strengths of both companies and aims to drive further advancement in technology and business within the next-generation image sensor field," Shinji Sashida, president and CEO of Sony Semiconductor Solutions, said in a statement.
TSMC Senior Vice President and Deputy Co-COO Kevin Zhang said the partnership "represents a key step forward in driving future sensing technology in the AI era," adding that both companies share a commitment to delivering leading sensing technology and products.
Sony CEO Hiroki Totoki told analysts on a post-earnings call Friday that the joint venture would mark the company's "first step to becoming fab-light," according to Bloomberg. Until now, Sony has handled everything from research and development to manufacturing in-house, Totoki said.
The two companies have prior history as joint venture partners: their earlier collaboration, Japan Advanced Semiconductor Manufacturing, dates to 2021 and is controlled by TSMC, according to Reuters. That entity's inaugural Japanese fab reached full-scale output by the end of 2024.