Sony Group's semiconductor arm plans to invest around 650 billion yen in capital expenditures over three years until March 2027, a 30% reduction from the previous three years.

The company, known for producing image sensors for smartphone cameras, is cutting back investments due to profitability challenges linked to issues in a new cutting-edge technology production line.

President and CEO Terushi Shimizu highlighted a decline in investment efficiency and profitability improvement challenges in recent years. Operating profit for Sony Semiconductor Solutions fell by 9% to 193.5 billion yen in fiscal 2023, with an operating margin decrease to 12%.

The company revealed plans to construct a new plant in Japan's Kumamoto prefecture starting in April, responding to market demand flexibility. Sony will coordinate chipmaking equipment installation based on image sensor requirements, with a neighboring facility and a new chip fab by Taiwan Semiconductor Manufacturing Co in close proximity.