Sony's Image Sensor Business Declines Due to Supply Shortages for Android Smartphones
According to recent posts by analyst Ming-Chi Kuo, the CMOS image sensor (CIS) market is expected to bottom out in Q3 2023 before recovering.
Kuo pointed out that Sony has allocated most of its CIS production capacity to supply Apple’s 48MP sensors for the iPhone 15 series slated for 2H 2023. As a result, there has been a significant reduction in Sony’s supply of high-end CIS chips for Android smartphones.
The reallocation of Sony’s capacity to prioritize Apple supply has constrained availability of its image sensors for other customers. Android smartphone brands have been forced to seek alternative CIS solutions from suppliers like Will Semiconductor and SmartSens.
By catering to Apple’s CIS needs and deprioritizing other customers, Sony risks losing future business and market share, especially in China. However, the company sees the trade-off as necessary to capture the high-volume 48MP iPhone 15 sensor opportunity this year.
For 2023, Sony CIS supply is expected to remain tight, allowing competitors like Will Semi to gain significant market share in 64MP+ sensors for Android phones. Will Semi’s high-end CIS revenue could grow from 3-5% in 2023 to 10-15% in 2024 and 20-25% in 2025.
Meanwhile, Chinese brands like Huawei will need to forge closer ties with additional CIS vendors beyond Sony. SmartSens is poised to become a key Chinese partner and beneficiary.
The CIS inventory corrections that dampened sales in 1H 2023 are subsiding. Will Semi and other suppliers are now restocking inventory to normal 10-14 week levels. This bodes well for renewed CIS shipment growth in 2H 2023.
In the long run, CIS demand will be fueled by expanding applications in AI, automation, robotics and particularly autonomous driving. While smartphones remain a major market, new use cases will further diversify Sony’s customer mix.
