TOKYO — Sony Group is raising the bar in image sensor technology as it seeks to stop the rapid gains of Samsung Electronics and other players from capturing more than half of the global market.
“We are conducting R&D and feel an intense threat” from international rivals, Sony Semiconductor Solutions president Terushi Shimizu said Friday as the company showed its new Octa PD technology to reporters.
The chip unit says the new technology solves the difficulty of a smartphone camera to focus multiple targets when, say, the sun is behind them. Now the camera can focus on both the face of a person pausing for a nearby photo and a landmark, such as Tokyo Tower, in the background.
Sony’s chip business is anchored by CMOS sensors, which for years dominated half of the global market. But circumstances have changed in recent years as it lost a major buyer, Huawei Technologies, after the Chinese company was blacklisted in the US in 2020.
Sony’s more expensive products began to slow down in sales, a development the Japanese company calls the “Huawei shock.” The group saw its global market share fall from 53% in fiscal 2019 to 43% in fiscal 2021.
Rivals are fast approaching. Samsung has captured 18.5% of the market, while US-based OmniVision Technologies does strong business with the auto industry and Chinese GalaxyCore boosts sales of cheaper phones.
Still, Sony unveiled a target last month to broaden its footprint to 60% by fiscal 2025, leaving its target first released in 2019 unchanged. The bullishness is being driven by shifting smartphone trends.
As the global phone market approaches saturation, phone cameras are becoming more sophisticated, with more and larger image sensors in one device. This is where Sony believes it can set itself apart from rivals.
Sony will also ramp up production capacity. A majority of the 470 billion yen ($3.5 billion) in capital spending earmarked for the entire group for fiscal 2022 will go to semiconductors, up 35% from the year. At the main image sensor factory in Nagasaki, a new fab that came online in 2021 is already undergoing a second expansion that started in May.
According to UK research group Omdia, the image sensor market is on track to expand by 34% to $25.1 billion between 2021 and 2025. Smartphone sensors account for an overwhelming share of the market, and this segment grew 37% to $20.1 billion.
The question is how Sony can continue to develop the technology while also selling more sensors.
“With competitors desperately trying to catch up, it won’t be easy for Sony to gain a dominant position,” said Omdia’s Akira Minamikawa.