Taipei [Taiwan], August 12 (ANI): Taiwan Semiconductor Manufacturing Co. (TSMC) and Sony Semiconductor Solutions Corp. agreed on Tuesday to establish a joint venture to develop and manufacture next-generation image sensors. According to a news report by Focus Taiwan, the two companies signed a legally binding definitive agreement to create Advanced Vision Semiconductor Manufacturing Corp. in Koshi City, Kumamoto Prefecture, Japan.

In a statement, TSMC, the world's largest contract chipmaker, said the newly established firm will serve as a central hub for the development and manufacturing operations required to bring next-generation smartphone image sensors into commercial production. The company noted that the joint venture is scheduled to start commercial production in 2029.

Sony Semiconductor Solutions will serve as the controlling shareholder, operating the joint venture as a subsidiary of Sony Group Corp. The representative director of Advanced Vision Semiconductor Manufacturing Corp. will be appointed by Sony Semiconductor Solutions.

As per the news report, the financial terms of the agreement dictate that Sony Semiconductor Solutions plans to contribute approximately 465 billion Japanese yen (USD 2.92 billion) through cash and asset transfers via a company split. Meanwhile, TSMC plans to invest around 282 billion yen into the venture.

TSMC noted that the capital contributions will be provided in phases, determined by prevailing market demand and general business conditions. The chipmaker added that the planned investment is premised on the joint venture securing financial support from the Japanese government.

Under the operational arrangement, Sony Semiconductor Solutions will manage product design, planning, and the core development of image sensor technologies. TSMC will supply its advanced-process technology and manufacturing expertise to facilitate development and commercial production activities.

Both companies 'intend to accelerate the commercialization of image sensor products driven by customer needs while advancing technological innovation and strengthening manufacturing capacity,' the news report quoted TSMC.

The board of directors at TSMC approved the joint venture during a two-day meeting that concluded on Tuesday. The final agreement follows an initial step taken in May, when both parties signed a nonbinding memorandum of understanding outlining the initial joint venture plan.

TSMC operates its first advanced semiconductor fabrication plant in Kumamoto, which initiated commercial production at the end of 2024 using specialty manufacturing processes. Construction on a second plant commenced last year, with mass production utilizing advanced 3-nanometer technology scheduled to begin in 2028. (ANI)