Taiwan Semiconductor Manufacturing Company TSM, or TSMC, and Sony Semiconductor Solutions have executed a legally binding definitive agreement to establish Advanced Vision Semiconductor Manufacturing Corporation, a joint venture (JV) in Kumamoto, Japan. The JV will focus on developing and manufacturing smartphone image sensors, with volume production set to start in 2029.
The latest move follows the non-binding memorandum of understanding (MOU) the companies signed in May to pursue a strategic partnership for next-generation image sensor development and manufacturing. The collaboration also aims to explore emerging opportunities in physical AI, including applications in automotive and robotics.
The deal, however, is still subject to required regulatory approvals and other customary closing conditions. Upon closing, Sony will serve as the JV’s sole controlling shareholder, while the venture is planned to operate as a consolidated subsidiary of Sony Group Corporation. Sony is also expected to appoint its representative director.
Under the strategic partnership, TSMC will provide its advanced process technology and manufacturing expertise to drive development and manufacturing activities required for volume production, while Sony will lead the development of core image sensor technologies, along with product planning and design. The collaboration is expected to help accelerate the commercialization of image sensor products based on customer needs while advancing technological innovation and expanding manufacturing capacity.
As part of the agreement, TSMC plans to invest approximately 282 billion yen in cash into the JV, while Sony plans to contribute nearly 465 billion yen through a combination of cash and asset transfers via a company split. The capital contributions are expected to be made in phases based on market demand and other relevant business conditions. Additional investments required to achieve the JV’s planned production capacity are also under consideration, with support from the Japanese government.
TSM’s Peer Updates
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The Zacks Rundown for TSM Stock
So far this year, TSMC shares have rallied 38.9% compared with the 37.7% rise of the industry.
Image Source: Zacks Investment Research
TSM currently trades at a forward, 12-month Price/Sales (P/S) of 11.14X compared with its historical median of 11.02X and the industry average of 11.04X.
Image Source: Zacks Investment Research
Take a look at how TSMC’s earnings projections have been shaping up.
Image Source: Zacks Investment Research
Taiwan Semiconductor sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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