By Joyce Huang | 2026-05-26

Sony Group and Taiwan Semiconductor Manufacturing Co. (TSMC) are deepening their alliance to position Japan's Kumamoto semiconductor hub at the center of future automotive and robotics supply chains.

The move allies two world-leading firms in creating vital supply chains independent of China.

On May 8, Sony Semiconductor Solutions and TSMC signed a nonbinding memorandum of understanding to establish a joint venture for next-generation image sensor development and production, with Sony holding a majority stake. The new facility will be built at Sony's new fab (semiconductor factory) in Koshi city, Kumamoto prefecture, Japan.

The joint venture "seeks to explore and address emerging opportunities in physical AI [artificial intelligence] applications, such as automotive and robotics, paving the way for future innovations and expanded technological advancements," Sony said in a joint statement. TSMC described the partnership as "a key step forward in driving future sensing technology in the AI era."

Speaking at a corporate strategy briefing the same day, Sony Group CEO Hiroki Totoki described the TSMC partnership as the first step in the company's shift toward a more "fab-light" approach. It is intended to improve profitability while reducing the heavy capital expenditure required to build fabs.

"Until now, image sensor supply has been constrained by the capacity of our own fabs," Totoki said, according to Nikkei Asia.

The Japanese government is expected to provide subsidies of up to 60 billion JPY ($380 million) to the new facility, Reuters reported in April, citing Japan's Ministry of Economy, Trade and Industry.

Kyushu cluster

The Kumamoto plan adds another layer to Japan's broader effort to rebuild its chip industry. TSMC has already established a manufacturing base in the same region through Japan Advanced Semiconductor Manufacturing (JASM), a joint venture set up with Sony in 2021 and majority owned by TSMC.

JASM's first fab began mass production in late 2024, while a second is expected to follow in 2028.

The new foundry fits Japan's strategy to assemble a semiconductor cluster in Kyushu, "where logic chips and image sensors are manufactured adjacent to each other," Shashi Bellamkonda, principal research director at Info-Tech Research Group, posted in a May research note.

For TSMC, expanding in Japan "provides geographic diversification while strengthening ties with one of the world's most important electronics markets," UK tech publication Parameter reported.

Automotive push

Sony is already the global leader in complementary metal-oxide-semiconductor (CMOS) image sensors, with a market share close to 50%. But in the automotive segment -- the primary target of the new venture -- it ranks third.

A Chinese firm is on top: OmniVision, a subsidiary of Shanghai-listed Will Semiconductor, held an estimated 35% share of the automotive CMOS sensor market in 2024. Following it are ON Semiconductor Corp. (United States) at 33% and Sony at 17%, according to a research note by Hong Kong-based CMB International Capital Corp., citing estimates from several firms including Yole Group.

Demand is expected to grow sharply.

"High growth momentum may next come from physical AI-powered products, where advanced image sensors will play a critical part," Jason Tsai, deputy director of DIGITIMES, told Focus. "A car with autonomous driving function may need to install at least four cameras or more. So do robots. The demand may be explosive."

Beyond automotive and robotics, advanced image sensors embedded in AI-powered medical products and smart manufacturing applications such as warehouse automation will present opportunities for the venture, Tsai added.

Supply chain stakes

The global humanoid robot market remains nascent, with DIGITIMES projecting output at about 38,000 units this year and Chinese developers currently dominating production. The Kumamoto venture positions Sony and TSMC to supply critical sensor technology as automakers and robotics firms seek alternatives to Chinese-dominated supply chains.

The partnership carries implications well beyond Sony's market position, said Bellamkonda.

"Sony is not defending its smartphone sensor position. It is making a claim on the perception layer of the entire physical AI edge stack," he posted in May.

Production at the Kumamoto facility is not expected to begin until May 2029. But early leadership in next-generation stacked CMOS architecture could be pivotal.

"Whoever controls that [AI perception] layer could gain enormous leverage across the AI supply chain," Robert Quinn, founder of Quinns Media, wrote on LinkedIn in May.