Sony Semiconductor Solutions and Taiwan Semiconductor Manufacturing Co. have signed a legally binding definitive agreement to create Advanced Vision Semiconductor Manufacturing Corporation, a joint venture for next-generation image sensors that will be headquartered in Koshi City, Kumamoto Prefecture and aims to begin mass production in 2029. The total investment is about ¥747 billion ($4.7 billion), with Sony contributing about ¥465 billion ($2.9 billion) for a 62% stake and TSMC investing about ¥282 billion ($1.8 billion) for 38%, while capital will be injected in stages based on demand and the business environment and the capacity build-out assumes support from the Japanese government. Sony will lead core image sensor development, product planning and design, while TSMC will provide advanced process technology and manufacturing know-how, extending a strategic partnership first outlined in a memorandum of understanding signed in May. The move comes as semiconductor makers race to expand capacity for AI-driven demand, even as China’s CXMT accelerates its rise in DRAM (dynamic random-access memory), memory groups push deeper into custom products such as HBM (high bandwidth memory for AI workloads), and analysts warn that today’s investment boom could tip into oversupply around 2028.