Sony will invest 600 billion yen (approximately US $ 5.3 billion) in equipment investment for semiconductor businesses such as image sensors for smartphones and automobiles in the three years to fiscal 2020 (as of March 2021). The investment is expected to increase by 30% over the three years ending in fiscal 2017 (as of March 2018), and increase production capacity by 20% to 30%. The company believes that following smartphones, a market for self-driving cars and the "Internet of Things (IoT)" will also emerge, and it will ensure dominance through large-scale investments.
According to the US survey company IC Insights, the image sensor market size, which was only $ 12.5 billion in 2017, is expected to increase to $ 19 billion by 2022. Image sensors are indispensable for autonomous vehicles to grasp the surroundings. In addition, it is also used in unmanned stores that use customer cameras to monitor customer dynamics in stores and can settle without cashiers. It plays a central role as the "eye" of the data economy era supported by the Internet of Things (IoT).
Sony's semiconductor plants in Japan
Sony holds 50% of the global share in the image sensor field, ranking first. The company produces in Nagasaki, Kumamoto and Yamagata. The current production capacity is about 300 thousand wafers per month, reaching about 100,000 pieces per month. The investment will be used to increase efficiency and introduce new equipment. In the three years to fiscal 2017, semiconductor-related equipment investment was approximately 460 billion yen. Sony initially planned to make the same level of investment in the three years ending in fiscal 2020, but later it seemed to think that in order to respond to the expansion of demand, it would need to increase the scale of 100 billion yen.
Sony believes that autonomous driving that requires high credibility and durability will continue to use sensors, and will first supply trial production for car manufacturers. It is difficult to achieve a significant increase in sales of existing smartphones with huge demand. However, the number of sensors equipped on each phone is increasing. On high-end models, the trend of adopting different sensors for brightness and color recognition, and equipped with a dedicated telephoto lens to improve image quality is expanding.
According to statistics from the British IHS Markit, in 2017 the image sensor market, Sony's share reached 52%. The second-ranked Samsung Electronics is only 19%, and the gap between the two companies has increased by 8 percentage points compared to 2016. Sony plans to continue to pursue demand through active investment. In the short term, in terms of smartphones, the impact of the slowdown in supply to China may increase. The company will judge the investment period while paying attention to the market.
Sony Semiconductor's operating profit in fiscal 2017 reached 164 billion yen, with an operating margin of 19%. It is one of the major cash cows that goes hand in hand with gaming and financial services. In addition to external supply, semiconductors are also the core components of the company's own products such as micro-single cameras and smartphones, which are very important.
In fact, in addition to Sony, Samsung is also increasing the production of the CMOS image sensor market. Under the siege of the two giants, the Chinese image sensor industry that is striving for development needs to think of more ways to deal with it.