This market research report was originally published at Yole Développement’s website. It is reprinted here with the permission of Yole Développement.
Yole Développement’s (Yole) expectation for 2021 is for the CIS industry to experience slower growth at 3.2% YoY, nevertheless reaching a record market value of $21.4B. This figure considers the reduction in Huawei’s CIS inventory, the substantial uncertainties related to semiconductor shortages, and the post-pandemic effect on consumer expenditure. The market research & strategy consulting company invites you to explore a snapshot of this industry, with the CMOS Image Sensor Monitor, Q2 2021, recently published.
COVID-19 was not the fox among the chickens
2020 saw CIS revenues reach $20.7B with an annual growth of 7.3%. As with other semiconductor products, Yole’s analysts noted that long production cycles and the activity of markets such as consumer, automotive, security, and industrial led to challenges in procurement of CIS at the end of 2020. In 2021, Yole’s imaging team expects a more stable situation. Q1-2021 has been very good due to some production overflow identified from Q4-2020, leading to a 7% better quarter compared to Q1-2020.
“Q1 is seasonally a typically lower revenue quarter, though there was fear of shortages in the overall semiconductor industry”, explains Chenmeijing Liang, Technology & Market Analyst within the Photonics, Sensing & Display Division at Yole. “At Yole, we believe that the effect here is more linked to supply chain issues rather than real capacity issues for CIS.”
2020 was a very unusual year for the CIS industry. Everybody had the COVID-19 situation in mind, and, indeed, it created a temporary disruption in the supply chain which had to be made up towards year-end. Another disruptive aspect was the Huawei ban and its effect on the market between Q3 2020 and Q4 2020, especially for Sony. However, it did not lead to a CIS market collapse thanks to the increasing number of cameras per mobile and a stable average selling price overall.
All these events combined allowed for the CIS industry to maintain significant growth in 2020.
A supply chain disruption or a player battle?
“Sony was hit the hardest by these crises, as it was highly exposed to the mobile market and subsequent international trade tensions; the toll on Sony’s revenue in Q4 2020 is notable”, asserts Pierre Cambou, Principal analyst in the Photonics and Sensing Division at Yole.
Sony, of course, remains the market leader, and though they did lose some market share in Q4-2020, they regained traction in Q1-2021. However, they are being challenged by increased competition. In comparison, their nearest competitor Samsung was more protected from this market shake-up due to its vertical integration. Their recently released line of 0.7µm pixel sensors targeting the mobile market helped them seize some of the new opportunities, with some OEMs, such as Xiaomi, benefiting from Huawei’s disappearance.
At the same time, the Huawei ban had other impacts on the overall supply chain.
With their large inventory and reduced smartphone dominance, the 2021 CIS industry will have to adapt to this large number of stockpiled chips, which will eventually be fed into the secondary market, affected by shortages.
TSMC has been the main player in trouble in this regard, being a key CIS player. Some CIS fabless players, like ON Semiconductor, may not have the ability to secure capacity from TSMC, as Sony did. They did ok during 2020 but could have done better by surfing the automotive and logistic camera market growth.
But other fabless players, probably Chinese, like Smartsens Technology and Omnivision, diversified their sourcing long ago and grew far more.
What’s next?
The long-term view is that the CIS market could gradually come to match the growth rate of the semiconductor market in general. This leads us to expect a 5.4% compound annual growth rate (CAGR) over the next five years to a total market of US$28.4 million in 2026. As explained, 2021 will be steadier, but we expect a strong bounce-back for the CIS market in 2022 with a 9% annual growth. Thus, the outlook is exciting, with an uptick in the automotive, security, and industrial camera markets, while smartphone sales are expected to remain stable though with an increase in the average number of cameras in each. But can the worldwide capacity set itself up to match the market demand?
Forget the 3nm technology race; in a context of high competition for 90nm down to 28nm nodes, the battle to secure CIS production capacity will become even more interesting.
Stay tuned with Yole’s imaging team on i-Micronews.com!
Chenmeijing Liang
Technology and Market Analyst, Photonics, Sensing and Display Division, Yole Développement (Yole)
Pierre Cambou MSc, MBA
Principal Analyst, Photonics and Sensing Division, Yole Développement (Yole)
