Sony and Taiwan Semiconductor Manufacturing Company (TSMC) are preparing to invest around US$6.3 billion (A$8.8 billion) in a joint venture to develop and manufacture next-generation image sensors in Japan. The two companies plan to establish the new operation in Kumamoto, Japan, with Sony holding a 60% stake and TSMC 40%. The investment is significant because image sensors are rapidly moving beyond smartphones, with demand expected to grow across a range of areas including automotive systems, robotics, and cameras. The companies are also looking beyond conventional smartphone cameras, with physical AI, robotics and automotive applications expected to become important markets for image sensors. That puts Samsung in a difficult position as the company competes with Sony in image sensors, while also competing with TSMC in advanced semiconductor manufacturing.