Sony, TSMC weigh $6.4b Japan factory for sensors

Sony Group and Taiwan Semiconductor Manufacturing Co. (TSMC) are reportedly discussing a joint investment of ¥1 trillion ($6.4 billion) in a new factory in Japan, according to a source familiar with the plans. The joint venture would focus on producing next-generation image sensors for applications in robots and autonomous vehicles. The factory is expected to begin operations in 2029, though no specific time frame has been disclosed for the investment itself.

Representatives from Sony and TSMC have not commented on the matter, citing the private nature of the talks. In May, the two companies announced preliminary discussions to develop new production lines and research facilities within Sony's existing image sensor factory in Kumamoto Prefecture, Japan. Analyst Hideki Yasuda of Toyo Research Advice described the proposed investment as "virtually risk-free" for both Sony and TSMC.

The joint venture could help Sony manage its capital expenditure requirements in this capital-intensive sector, while providing TSMC with a stable revenue stream.

Sony's shares rose up to 2.2% on Monday, while TSMC gained 1.7%, reflecting positive market reaction to the potential partnership. This investment aligns with Sony's broader strategy to shift towards a more asset-light approach, focusing on intellectual property assets such as music distribution rights, film and video game franchises.

Sony currently holds a minority stake in TSMC's semiconductor manufacturing site in the region and will be the controlling shareholder of the new joint venture. The Japanese government may provide financial assistance to the venture, as Trade Minister Ryosei Akazawa indicated.