Sony Semiconductor Solutions Corp. said Tuesday it will begin mass production of next-generation image sensors with Taiwan Semiconductor Manufacturing Co. in 2029, with the two companies investing a combined 747 billion yen ($4.7 billion).
The production base of the Sony Group Corp. subsidiary and the world's largest contract chipmaker will be established in Kumamoto Prefecture, which suffered a magnitude-7.1 earthquake in late July and where TSMC already operates.
The quake that registered the maximum 7 on Japan's seismic intensity scale has dealt a heavy blow to the semiconductor industry, including Sony, but the two firms decided on the huge investment in anticipation of growing demand for artificial intelligence.
Sony's semiconductor unit and TSMC signed a legally binding definitive agreement on the joint venture Tuesday. Sony will be the controlling shareholder, with the venture operating as its consolidated subsidiary.
In May, the semiconductor unit of Sony and TSMC announced they had agreed to cooperate on the development and manufacture of next-generation image sensors. Sony is the world's top image sensor maker by value.
In addition to contributions from the two companies, the joint venture is considering a separate funding scheme to achieve its targeted production capacity, based on the assumption that it will receive government support.
"Under the strategic partnership, Sony intends to take a leading role in the development of core image sensor technologies, as well as product planning and product design," the Japanese firm said in a statement.
