Sony‘s (NYSE: SNE) image sensor production will return to full capacity within the next six months, according to a recent company announcement. Production had previously been reduced due to earthquakes which struck Kyushu in mid-April and damaged the Kumamoto plant, and the cuts were exacerbated by a global slowdown in smartphone sales.
The key facts
During the next six months, Sony’s monthly production of image sensors will rise from the current 70,000 wafers to its full capacity of 73,000 (which excludes outsourced production). Moreover, sensor shipments from the Kumamoto plant have already recovered to pre-earthquake levels. During the news conference, Sony Semiconductor Manufacturing President Yasuhiro Ueda declared that “the business environment for our customers is improving.”
Sony supplies the image sensors for a wide range of smartphones, action cameras, and other devices. It controls roughly 40% of the worldwide market for the complementary metal-oxide semiconductor (CMOS) image sensors which convert light into electronic signals.
Sony’s main rivals in that market include Omnivision, Samsung, and Canon. All three companies have been pushing the technical limits in power and resolution — last year, Canon unveiled a massive 250-megapixel sensor which could capture images and videos at roughly 30 times 4K resolution.
The key takeaway
The return to full image sensor production is great news for Sony’s semiconductor business, which generated 9% of its revenue last quarter. During that quarter, the unit’s revenue fell 23% and it posted an operating loss due to the aforementioned headwinds.
Looking ahead, strong sales of action cameras and drones, many of which use Sony’s image sensors, could boost the unit’s top and bottom line growth through the end of the year. That growth would complement the company’s fastest growing game and network services unit, which has been bolstered by robust PS4 hardware and software sales.
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Leo Sun has no position in any stocks mentioned.
Sony’s Image Sensor Production Picks Up Again
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