TOKYO -- Toyota Motor Corp. and affiliate supplier Denso Corp. on Wednesday said they have agreed to set up a joint venture to develop next-generation automotive semiconductors as the industry moves toward connected and autonomous vehicles.
Denso will own 51 percent of the new company, with Toyota holding the remainder, Toyota said in a statement.
The companies said they aim to establish the company in April 2020 with a capitalization of 50 million yen ($458,968) and about 500 employees.
The venture will focus on components such as power modules for electric vehicles and periphery monitoring sensors for automated vehicles.
Computing power is rising in importance as cars increasingly become connected to each other and transportation infrastructure like traffic lights.
Autonomous driving systems will also need the capacity to sense the world around them, interpret that data, and then make decisions such as whether to brake or veer to the right to avoid an obstacle, all within a fraction of a second.
Toyota and Denso agreed in June of last year to consolidate their electronic components production and development at the supplier in order to improve efficiency and accelerate innovation.
The two companies also banded together with another Toyota affiliated supplier, Aisin Seiki, to set up a development center for autonomous driving in Tokyo in March of last year, called Toyota Research Institute - Advanced Development, or TRI-AD.