Sony Corp. is working around the clock to manufacture its in-demand image sensors, but even a 24-hour operation hasn't been enough.
For the second straight year, the Japanese company will run its chip factories constantly through the holidays to try and keep up with demand for sensors used in mobile phone cameras, according to Terushi Shimizu, the head of Sony's semiconductor unit. The electronics giant is more than doubling its capital spending on the business to 280 billion yen ($2.6 billion) this fiscal year and is also building a new plant in Nagasaki that will come online in April 2021.
"Judging by the way things are going, even after all that investment in expanding capacity, it might still not be enough," Shimizu said.
It's now common to see three lenses on the back of a phone as manufacturers lean on camera specs as a hard number to nudge customers into upgrading. The latest models from Samsung Electronics Co. and Huawei Technologies Co. boast resolutions in excess of 40 megapixels, can capture ultrawide-angle images and come with depth sensors. Apple Inc. this year joined the fray with a triple-camera iPhone 11 Pro. That's why even as smartphone market growth plateaus, Sony's sales of image sensors continue to soar.
"The camera has become the biggest differentiator for smartphone brands and everyone wants their social media pictures and videos to look nice," said Masahiro Wakasugi, an analyst with Bloomberg Intelligence. "Sony is riding that wave of demand very well."
Semiconductors are now Sony's most profitable business after the PlayStation. The company in October raised its operating income outlook for the chip unit 38% to 200 billion yen in the year ending March 2020, after second-quarter profit jumped by almost 60%. Sony forecast revenue from its semiconductor division will climb 18%, of which image sensors account for 86%.
Sony is now looking to a new generation of sensors that can see the world in three dimensions. The company uses a method called time of flight that sends out invisible laser pulses and measures how long they take to bounce back to create detailed depth models. This helps mobile cameras create better portrait photos by more precisely selecting the background to blur out, and it can also be applied in mobile games, where virtual characters can be shown realistically interacting with real-world environments.
Alpeyev and Furukawa write for Bloomberg News.
