Sony is turning to TSMC to cut the cost of smartphone camera sensors, a market it dominates but is losing ground in to Samsung. The two companies signed a non-binding memorandum of understanding Friday for a new Japan-based joint venture that will develop and manufacture next-generation image sensors. Sony will hold majority ownership.
Production and development lines will be housed in a new fabrication plant Sony is building in Koshi City, Kumamoto region. Investments will be phased based on market demand, contingent on Japanese government support.
Sony is also planning new capital spending at its existing Nagasaki plant. The primary goal is straightforward: bring down chip costs. Sony supplies the majority of smartphone camera sensors worldwide, but Samsung is slowly chipping away at that share.
Lowering manufacturing costs gives Sony room to compete on price as phones pack in more cameras every year. The venture combines Sony's sensor design expertise with TSMC's manufacturing and process technology strengths, deepening an existing partnership that already includes a separate joint venture, Japan Advanced Semiconductor Manufacturing (JASM), set up in 2021 and majority-owned by TSMC. JASM's first fab in Japan began volume production in late 2024.
Beyond smartphones, the partnership will explore physical AI applications in automotive and robotics, the companies said. Sony has previously signaled it is open to bringing in external investment partners for its chip business, citing the necessity of investing in manufacturing capacity.
