Sony Group Corp. (NYSE:SONY)and Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) reportedly plan to invest $6.3 billion in a state-of-the-art image sensor semiconductor plant in Kumamoto, Japan.

Production at the new facility is slated to begin as early as 2029 and will be operated through a joint venture, with Sony holding a majority 60% stake and TSMC owning the remaining 40%, reported Nikkei Asia on Monday. The collaboration between the two companies was agreed upon in May.

The joint venture is likely to be established by the end of fiscal 2026, which runs through March 2027. The primary goal is to supply high-performance camera sensors for Apple Inc. (NASDAQ:AAPL) iPhones, according to the report. The companies also aim to enhance sensor performance for improved object recognition by AI systems, targeting applications in the burgeoning field of “physical AI”.

The venture will build large-scale R&D facilities and production lines at Sony Semiconductor Solutions’ image sensor plant in Kumamoto, Japan. Sony and TSMC are also discussing potential government subsidies with Japan’s Ministry of Economy, Trade and Industry.

Sony and TSMC did not immediately respond to Benzinga’s request for comments.

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TSMC Expands Japan Push Amid Chip Race

Kumamoto has attracted semiconductor investment because of its water resources, infrastructure and established industrial base.

TSMC’s most advanced 2nm and 3nm production remains centered in Taiwan and the U.S., while its Japan expansion focuses largely on specialty and mature technologies.

This announcement comes amid a competitive landscape in the tech industry. TSMC is reportedly developing an advanced chip-packaging technology called "EMIB-like", similar to Intel Corp. (NASDAQ:INTC)‘s EMIB, in partnership with Taiwan-based Kinsus Interconnect Technology. The move could weaken Intel’s edge in advanced packaging. Meanwhile, Nvidia is reportedly evaluating Intel’s EMIB technology for a future processor.

Meanwhile, Samsung Electronics Co. Ltd. (OTC:SSNLF) and Broadcom (NASDAQ:AVGO) have entered a $200 billion AI chip pact through 2030, intensifying the foundry race with TSMC.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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