Sony Group Corp. said it will buy back as much as ¥500 billion ($3.2 billion) of its shares after rising memory prices weighed on the entertainment group’s annual outlook.

For the year through March 2027, the Tokyo-based electronics maker expects an operating profit of ¥1.6 trillion, roughly an 11 per cent increase and in line with analyst estimates.

Sony improved profitability in the fiscal year just concluded, with its music and smartphone image-sensor businesses making the biggest contributions to growth.

Shares rose as much as 7.3 per cent, their biggest intraday jump in over two months, but gave up all those gains by the end of trading on Friday. Sony said it plans to cancel 3 per cent of its shares on May 29, helping take some of the pressure off its Tokyo-traded stock, which is down more than 20 per cent this year due to pressure from surging component costs.

Sony also announced a new joint venture with Taiwan Semiconductor Manufacturing Co., which will develop next-generation image sensors and explore physical applications of artificial intelligence.

Based in Kumamoto, where TSMC has set up a fabrication plant, Sony said it expects to get support for the project — which will be majority-owned by Sony — from the Japanese government.

The company is in the midst of an overhaul, casting off unprofitable hardware businesses and fixing its focus on expanding IP-led divisions. It’s close to securing a nearly $4 billion deal for a music catalog that includes the works of Justin Bieber and Neil Young, while earlier this year it surrendered majority control of its TV business to a joint venture with China’s TCL.

Its solid outlook may reassure investors about the pace of Sony’s transition and signals confidence in the company’s resilience to macroeconomic risks. Sony’s shares are down 22 per cent this year as escalating component costs erode margins across the consumer electronics industry.

The core games division combines the burden of escalating hardware costs with promising software margins. The upcoming release of Grand Theft Auto VI in the fall is a likely catalyst to bring in more users to Sony’s entertainment platform and online services.

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Published on May 8, 2026