Many already know that Sony is a significant player in the image sensor space, but a new Sony Imaging and Sensing Solutions Segment report offers exciting insights into the stranglehold Sony has on the image sensor industry and how the company views the smartphone market moving forward. Looking first at Sony’s image sensor success over the past few years, the company has achieved consistent market share growth despite an uncertain market with significant unpredictability. In 2022, Sony’s image sensor market share by revenue was 49%. It went up to 53% the next year, and Sony expects it to reach 58% this year and 60% in 2025. While an 11 percentage point jump may not sound like much at first, the global image sensor market was valued at over $23 billion in 2023. Any increase in relative share of a market that valuable, even one that was just a single percentage point, has massive implications for total revenue. Sony’s growth has been driven in part by significant capital expenditures in Sony’s image sensor operations. In the fiscal years 2012-14, Sony spent about 140 billion yen to expand its sensor operations; that is nearly $900 million. In the following three years, that went up to 360 billion yen ($2.3 billion). It then went to 580 billion yen ($3.7 billion). In the previous three fiscal years, Sony expended a whopping 930 billion yen ($5.96 billion). That is a significant outlay, and Sony expects to reduce it by 30 percent over the next three years. Understandably, these capital investments have come with increased research and development expenses, ranging from 250 billion yen ($1.6 billion) in 2012-14 up to about 640 billion yen ($4.1 billion). However, R&D expenses as a ratio to sales have been pretty steady, hovering around 15% annually. Sony’s willingness to invest heavily in its image sensor business is related to increased demand for devices, including smartphones, with bigger and better sensors. Sony points toward five characteristics of mobile camera quality that are primarily dependent on image sensor performance, including dynamic range, noise performance, readout speed, power efficiency, and resolution.
With still photography, Sony believes in combining larger image sensors and AI to extract the best possible performance. However, image processing is computationally demanding, which limits its efficacy for video, which has at least 24 image frames each second. “We believe further improvements in performance are required in each characteristic, and we believe there is a lot of room for technological evolution,” Sony explains. “Because real-time performance is required, the quality of video is more directly related to the characteristics of the image sensor.” In that spirit, Sony’s report details the benefits of a larger image sensor for both stills and video. It shows how image sensor sizes have expanded in recent years for main cameras and sub cameras (like ultra-wide and telephoto) alike. More interestingly, Sony has forecasted image sensor demand by size until 2030 and expects the average smartphone image sensor size for a main camera to increase by more than 200% compared to the average image sensor in 2019. As for sub cameras, the trend is subdued, but Sony still expects these sensors to increase by over 150% in size over that same period. Engineering larger sensors requires investments in fabrication technology and R&D, so it comes as little surprise that Sony, which believes in a booming demand for bigger sensors, has put so much money into ensuring it can meet the forecasted demand. Sony’s complete report includes additional details, including concerning the image sensor business as it relates to automotive cameras and silicon-based displays in wearable devices. Image credits: Sony
