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China IC Design Series (3): The rise of Chinese CMOS image sensor industry

The debut of the world's first dual-camera handset in 2011 kicked off a competition between handset vendors of adding more cameras on mobile phones, pressing brand vendors including Samsung Electronics, Huawei and Xiaomi to make efforts to respond the new trend.

The continued proliferation of end-market devices with multiple rear cameras such as handsets has triggered an exploration in demand for CMOS image sensors (CIS), making it the hottest segment in the semiconductor industry in recent years.

CIS sensors serve as the eyes of cameras, and their properties directly impact the quality of the images being taken. CIS sensors can convert optical signals captured by camera lenses into electronic signals that can be read by related machines, realizing the process of drawing the real world into the chip-oriented landscape. The larger the sensing area, the larger the image displayed and with more details.

The size of a CIS chip is relatively small, but it usually accounts for 52% of the production cost of a camera module, which in turn is one of the three major costly parts of a handset in addition to SoC chip and display.

Sony, Samsung Electronics and OmniVision are currently the world's top-three CIS sensor providers. The history of the global CIS industry begins with the dominance of Japan- and Korea-based companies, highlighted by the persistent competition between Sony and Samsung.

The evolution of related CIS technologies and production has successively helped many companies from different industries sustain and receive remarkable business results. However, OmniVision, once a powerful US-based company, has fallen prey to China's ever-expanding semiconductor industry and become a Chinese-owned enterprise. The takeover has thus helped the rise of other China-based companies such as GalaxyCore and SmartSens Technology, enabling them to compete for a share in the global CIS market.

 

CIS market dominated by Sony, Samsung

Japanese companies dominated the global CIS market from 1970-1990, in which the production of charge coupled device (CCD) image sensors, which require high pixels and a sophisticated manufacturing process, were the mainstream products. Sony and Matsushita were among the best CCD sensor producers.

Optimizing their cutting-edge CCD and storage technologies, Japan once accounted for more than half of the world's semiconductor production, with six out of the global top-10 semiconductor firms coming from Japan.

However, during the more than 20 years of Japan's domination, other companies began to seek alternative technologies for CCDs that could achieve high-quality images as good as CCDs. At the same time, the production barriers and cost of the new technologies should be lower enough to overwhelm traditional CCDs.

At that time, US-based OmniVision came out with a new complementary metal oxide semiconductor (CMOS) technology for image sensors. The rollouts of CMOS image sensors (CIS) discontinued the monopoly of Japanese companies in the image sensor market. CIS chips, with competitive pricing, then began to gain popularity in the electronics consumer market. Optimizing its preemptive position, OmniVision managed to ramp up its share to 50% in the global image sensor market in 2010. Meanwhile, Apple's adoption of OmniVision's CIS chips for its iPhone 3GS and iPhone 4 was also instrumental to the rise of the US image sensor company.

The success of Omnivision forced Sony to shift its focus to CIS from CCD. In September 2010, Sony announced to invest JPY40 billion (US$296 million) in the Kumamoto Technology Center of its subsidiary Sony Semiconductor Kyushu to ramp up the production of its Exmor and Exmor R CIS sensors. At year-end 2010, Sony announced a JPY100 billion investment plan to ramp up CIS capacity. The plan included purchasing semiconductor equipment from Toshiba and establishing new wafer lines, aiming to realize differentiated competition in the CIS market.

Sony's technology overhaul began to pay off in 2011 when it started receiving CIS orders from Apple for its iPhone 4s devices. During the same year, Sony also landed CIS orders from other handset brands for their high-end flagship models, resulting in exponential shipment growth.

In 2012, Sony realized a technological leap for image sensors by introducing its first stacked CIS chips. By stacking two dies together, the newly developed CIS sensor enables smartphone makers to roll out new handsets much thinner than their previous models. Since then, Sony has continued to ramp up its share in the CIS market. In early 2014, the supply of Sony's CIS chips ran even short of demand.

In 2015, Sony further solidified its leading position in the CIS sector by taking up the control of Toshiba's image sensor business for US$155 million and began to offer its CIS chips for high-end applications in the automotive, security/surveillance, and industrial sectors.

During the same period of Sony's transformation, Samsung also began to enhance its presence in the CIS market and released its landmark ISOCELL technology in 2013. Compared with backside illumination (BSI) technology for the image sensor, the ISOCELL technology can reduce pixel crosstalk by 30% and scale down the camera module to make the handsets and tablets thinner and lighter.

Samsung had long been pondering that further development of CIS products could be a breakthrough to reduce its over-reliance on storage products. In December 2018, it reorganized its Device Solution (DS) business group. It created a sensors business unit under its System LSI division, responsible for CIS product roadmaps and sales, while the contract manufacturing unit of the DS group handles CIS process development.

Samsung also implemented a two-pronged strategy of adopting more advanced manufacturing processes and aggressive pricing to enhance its competitiveness in the CIS sector.

According to DIGITIMES Research, the CIS market is highly concentrated, with Sony and Samsung being the top-two vendors, accounting for 70% of the global market share. Data compiled by Strategy Analytics show that in 2021, Sony was the world's largest provider of camera image sensors for mobile devices with a 45% share and Samsung was second with a 26% share.

While the gap between Sony and Samsung remained relatively wide in 2021, a US-government announcement in May 2020 to restrict foreign chip producers from shipping chips made with US equipment to Huawei started to revamp the landscape of the CIS market.

Huawei had always adopted Sony's CIS chips for its smartphones, particularly its high-end Mate- and P-series models. Huawei took a hit from the US trade sanctions and saw its smartphone shipments begin to fall drastically, which resulted in a significant decline in Sony's CIS shipments.

On the other hand, Samsung continued to land CIS orders from Android phone vendors, including Xiaomi, Oppo, Vivo and Motorola (Lenovo), thanks partly to its release of over 100-megapixel camera sensors in 2019 and continued upgrades for their iterative computation capabilities. Competition in the smartphone-use CIS market will intensify further, which could affect Sony's position as the segment leader.

 

Rise of Chinese CMOS providers

While Samsung has spared no time to expand its sales at Sony's woes, the market turbulence has encouraged localization of CIS production in China ahead of its schedule.

Regarding the development of image sensors, CCD parts first appeared in the 1990s and CMOS sensors debuted around 2000. Since then, CIS chips have gradually become the mainstream technology for consumer electronics products. China missed the opportunity to develop CCDs in the early stage, and Chinese chipmakers also do not have any advantages with respect to technology accumulation for CIS chips.

Yundong Zheng, chairman and CEO Vimicro International, once said, "In terms of technology accumulation, Chinese CMOS sensor makers do not have any advantage. However, the local CMOS industry has grown considerably thanks to relevant policy support over the past few years and comprehensive and diverse demand in the domestic market."

In 2018-2019, China-based semiconductor distributor Will Semiconductor (WillSemi) completed the acquisition of all outstanding shares of OmniVision, making it the holding company of the US CIS maker. Later, WillSemi also took up the control of two local peers Superpix and CTVE (Shiyuan Electronic Technology), enabling it to have related technologies to produce entry-level, midrange and high-end CIS parts and become the leading company in China's image sensor industry. Since then, WillSemi has continued to enhance its competitiveness, accelerating the import replacement process for CIS chips in the smartphone sector.

According to Nomura Orient International Securities, in 2020, Omnivision's (Willsemi) 32- and 48-megapixel CMOS image sensors were widely adopted by Huawei and Oppo for their smartphones, and Xiaomi used Omnivision's OV48C 48-MP CIS as the primary rear camera of its Mi10 Extreme Commemorative Edition. Now WillSemi has turned a primary supplier of main cameras for flagship smartphones from its previous role as a sub-camera provider.

By DIGITIMES

Link:https://www.digitimes.com/news/a20220629VL206.html?mod=3&q=IC

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