TAIPEI (Taiwan News) — TSMC on Friday signed an agreement with Sony Semiconductor Solutions to form a joint venture for next-generation image sensor development in Japan.

The two companies signed a non-binding memorandum of understanding covering the venture, which would establish R&D and production lines at Sony’s new facility in Koshi City in Kumamoto Prefecture, per CNA. Sony is expected to hold a majority stake and maintain operational control.

The companies said the partnership will combine Sony’s image sensor design expertise with TSMC’s process technologies. The project will focus on improving image sensor performance for applications including physical AI, robotics, and automotive systems.

TSMC said discussions are ongoing regarding potential investment in the venture.

TSMC Senior Vice President Chang Hsiao-chiang (張曉強) said Sony has been a long-term partner in TSMC’s CMOS image sensor business. He said the agreement marks an important step in advancing sensing technologies for the AI era.

Sony President and CEO Shinji Shikida said the agreement builds on years of cooperation and elevates the partnership to a new stage. He said the joint venture will combine the strengths of both companies to accelerate technology and business development in image sensors.

TSMC’s revenue in April reached NT$410.72 billion (US$13.1 billion), down 1.1% month-on-month and up 17.5% year-on-year, per Liberty Times. Cumulative revenue from January to April totaled about NT$1.54 trillion, up 29.9% from the same period last year and setting a record high for the same period.