Sony Group (6758.T): Sony and TSMC to mass produce next-generation sensors in 2029, investing c¥1trn in a JV (Nikkei)

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11 Aug 2026 07:03:21 ET │ 10 pages

Sony Group (6758.T)

Sony and TSMC to mass produce next-generation sensors in 2029,

investing c¥1trn in a JV (Nikkei)

CITI'S TAKE

At 11:00 on August 10, the Nikkei reported that Sony Group and TSMC will

begin mass production of next-generation chips for CMOS image sensors

in Koshi City, Kumamoto Prefecture, targeting 2029 for the start-up of

operations. According to the article, the two companies will establish a

joint venture (c60% Sony, c40% TSMC) within FY26, with total investment

expected to reach c¥1trn. Both companies announced in May that they

were also considering applications in the physical AI field in the future.

Sony, which holds over half the global market share in CMOS image

sensors, is likely to strengthen its competitiveness via this collaboration,

which will bring together its strengths in manufacturing technology and

TSMC's advanced process technologies. Sony reportedly positions this

joint venture as the first step in its fab-lite strategy, whereby it aims to

improve investment efficiency.

Neutral

Price (10 Aug 26 15:30)

¥3,764.0

Target price

¥3,500.0

Expected share price return

-7.0%

Expected dividend yield

0.9%

Expected total return

-6.1%

Market Cap

¥22,037,139M

US$138,333M

Masahiro ShibanoAC

Tokiya Baba

Our view — Following Sony's announcement of its strategic partnership with TSMC

after market close on May 8, we believe this development can be taken as a potential

future contributor to improving medium- to long-term factory utilization rates in the

I&SS business. While the timing of the announcement matches with our

expectations detailed in our Q1 earnings preview and offers no surprises, the

clarification of a concrete roadmap for the partnership has in our opinion improved

the outlook for this business, leading us to view the announcement as slightly

positive for Sony shares. Following the report at 11:00 on August 10, the stock closed

up 1% from the previous day. With I&SS business results outperforming consensus

in Q1, we believe the equity market will refocus attention on acceleration in earnings

in the three entertainment businesses (games, music, and movies).