Electronics major Sony Corp plans to invest 100 billion yen (about USD 1.2 billion)

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to increase the production of image sensors, that are extensively used in digital cameras and smartphones.

The proposed investment would also help the entity to double the production capacity for CCD and CMOS image sensors.

Sony today said it would pump in 100 billion yen by year ending March 31, 2012. The company would use the money for Sony Semiconductor Kyushu Corp's Nagasaki Technology Center.

"These investments will further strengthen Sony's production capacity for 'Exmor' and 'Exmor R' CMOS image sensors to meet increased demand from markets such as those for smartphones and digital still cameras," Sony said in a statement.

Sony is the leading player in the CMOS image sensors market for digital cameras. With increasing use of digital cameras and smartphones, the demand for the image sensors is expected to rise in the coming years.

"The investment plan includes the transfer of the semiconductor fabrication facilities from Toshiba Corp... refurbishment of a part of the above semiconductor fabrication facilities into new wafer lines capable of manufacturing CMOS image sensors," the statement noted.

The proposed move along with 40 billion yen investment announced in September, Sony's total production capacity for CCD and CMOS image sensors would rise from "current level of approximately 25,000 wafers per month to approximately 50,000 wafers per month by end of March 2012".