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CMOS image sensor market sees perfect storm

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By Nick Flaherty


The market for CMOS image sensors is expected to see its first sales decline in 13 years, says ICinsights.

Sales are expected to fall 7% to $18.6 billion and unit shipments projected to drop 11% to 6.1 billion worldwide, with Sony hit hard. This is a result of a slump in smartphone production, low camera growth in handsets and a weak global economy.

For most of the last two decades strong growth in CMOS image sensors pushed this product category to the top of the optoelectronics market, in terms of sales volume, generating over 40% of total opto-semiconductor annual revenues.  

The projected 2022 decline in CMOS image sensors comes after two years of low sales growth in 2020 (+4%) and 2021 (+5%).  The drop reflects overall weakness in consumer smartphones and portable computers with digital cameras for video conferencing following an upsurge in demand for Internet connections and online conferencing capabilities during the Covid-19 virus pandemic.  

The 3Q Update forecast shows a modest recovery in CMOS image sensors next year with market revenues growing 4% to $19.3 billion and then rising 13% in 2024 to reach a new record high of $21.7 billion.

Some high-end smartphone models contain five or more cameras, but the average in most handsets has stayed at three (one on the front for selfie photos and two main cameras on the backside of phones). Some managers in China have described the image sensor market conditions as a “perfect storm,” combining a slowdown in mainstream mid-range smartphone shipments and an unanticipated pause in the increase of embedded cameras being designed in new handsets.

CMOS image sensor market leader Sony—which accounted for about 43% of CMOS image sensor sales worldwide in 2021—reported a 12.4% sequential decline in image sensor dollar-volume revenues (-2% in Japanese yen) during the company’s fiscal 1Q23 quarter, ended in June 2022.  

In the first half of calendar 2022, Sony struggled to match image-resolution requirements for camera phones and its CMOS image sensor sales to leading Chinese system manufacturers were lowered by U.S. trade bans.  Sony still believes excess inventories of phones and image sensors will be reduced by early 2023 and market conditions will “normalize” in the second half of its current fiscal year, which ends in March.

Nearly two-thirds of CMOS image sensors are used in cellphones, and that share is expected to fall to about 45% by 2026, according to The McClean Report’s 3Q Update.  A slow–but-steady recovery in CMOS image sensors is forecast to be driven by a new upgrade buying cycle of smartphones and more embedded cameras being added in other systems, especially for automotive automation capabilities, medical applications, and intelligent security networks.  

The 3Q Update shows CMOS image sensor sales rising by a CAGR of 6.0% between 2021 and 2026 to reach $26.9 billion in the final year of the forecast. CMOS image sensor shipments are forecast to grow by a CAGR of 6.9% between 2021 and 2026, reaching 9.6 million units.

www.icinsights.com

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