TSMC and Sony Team Up to Build a $4.7 Billion Chip Factory in Japan

Two of the world's biggest technology companies are joining forces to build a major new chip factory in Japan. Taiwanese chipmaker TSMC and Japanese electronics giant Sony announced on Tuesday that they will invest a combined $4.69 billion to create a new company together. This new company will focus on making next-generation image sensors — the tiny chips inside your smartphone's camera that help capture photos and videos. Large-scale production is expected to begin in 2029.

The new joint venture will be called Advanced Vision Semiconductor Manufacturing Corp. It will be located in Kumamoto, a city in southern Japan where TSMC already runs another chip plant called Japan Advanced Semiconductor Manufacturing, or JASM. Setting up the new company near an existing factory makes it easier to share workers, equipment, and expertise. Having both companies in the same area could also help speed up production.

Sony will be the bigger investor and the controlling shareholder in the new venture. The company plans to put in about 465 billion yen, which is roughly $2.92 billion. Part of Sony's contribution will come as cash, and part will come in the form of a brand-new chip factory that Sony recently built in Kumamoto. TSMC will contribute about 282 billion yen, or around $1.77 billion, and will bring its advanced chip-making technology to the partnership.

Each company will play a different but important role in the venture. Sony will lead the work of designing image sensor technology and planning which products to make. TSMC will provide the cutting-edge manufacturing process that turns those designs into real chips. Together, they hope to produce image sensors that are more powerful and efficient than what is available today.

The two companies first announced they were thinking about this partnership back in May. The money will not all be invested at once — instead, the companies will add funds in stages, depending on how strong demand is for the chips they make. The Japanese government is also expected to help support the project financially, though the exact amount of that support has not yet been decided.