While Sony Corp.'s smartphone business is floundering, the division that produces image sensors used in digital cameras for other phone-makers is enjoying double-digit growth. So the Japan-based company announced today that it is spinning off its semiconductor business -- which includes the production of image sensors -- as part of a strategy to boost profitability and become more competitive in that market.
The new business, Sony Semiconductor Solutions, is set to begin operating on April 1, 2016. The company is also revamping other organizations in its devices segment to promote growth in the battery and storage media markets.
Sony said the changes are aimed at enabling its semiconductor, battery and storage media businesses to "more rapidly adapt to their respective changing market environments and generate sustained growth." In two separate announcements earlier this year, the company also said it would invest $1.25 billion in its factories to increase image-sensor production capacity.
'Higher Demand' for Image Sensors
In its most recent quarterly financial report, released at the end of June, Sony said its mobile communications business had seen a 16.3 percent year-on-year decrease in revenues. The drop was not surprising, however, as the company has been pivoting away from smartphones to focus on more profitable areas such as camera sensors and PlayStation game devices.
"This decrease was due to a significant decrease in smartphone unit sales resulting from a strategic decision not to pursue scale in order to improve profitability," the company said.
Sony's devices unit, meanwhile, saw sales increase by just over 35 percent in Q1, "primarily due to a significant increase in sales of image sensors reflecting higher demand for image sensors for mobile products," according to the company's June 30 financial report.
Plan To 'Achieve Dominance'
"Two Sony-made image sensors and related parts" go into every one of Apple's latest iPhone 6 smartphones, according to an April 28 report in the Wall Street Journal. The article cited market research that found Sony earns as much as $20 for every iPhone 6 sold.
Apple reported at the end of September that sales of the new iPhone 6 and iPhone 6 Plus broke every one of the company's previous first-weekend sales records, with more than 13 million devices sold in three days.
With its image sensor business seeing strong growth, Sony aims to increase production at its Yamagata and Nagasaki technology centers from around 60,000 wafers per month to around 87,000 wafers per month by the end of September 2016.
The company has outlined a plan to "achieve dominance" in the CMOS (complementary metal-oxide semiconductor) image sensor market. "Demand for these image sensors is anticipated to further increase, particularly within the expanding market for mobile devices such as smartphones and tablets," the company said.
Sony's growth plan has focused on developing image sensors with ever-increasing pixel counts, better resolution and higher speeds. In addition to expecting continued growth in the smartphone and tablet markets, the company also foresees greater opportunities in digital imaging in areas such as security, authentication and healthcare.
Posted: 2015-10-06 @ 1:58pm PT