Fun with Data - Image Sensors
The concept behind image sensors is a simple one; a light wave hits a photodiode that converts the light to an electrical signal. The photodiode is a semiconductor device similar to a solar cell and by changing the material from which it is made, it can be tailored to be sensitive to visible light, UV light, or infra-red, and can be used in many applications in consumer electronics although the most visible is use in digital cameras, either as standalone devices or as part of smartphones or similar devices, which use large arrays of photodiodes to create high resolution image sensor based cameras. Once you get further than the basic concept behind image sensors the technology becomes complicated and beyond the reach of the average investor, however the important characteristics of image sensors are far less technology driven as they are application driven.
Anatomy of the Active Pixel Sensor Photodiode - Source: https://micro.magnet.fsu.edu/primer/digitalimaging/cmosimagesensors.html
CMOS Image Sensor Integrated Circuit Architecture - Source: https://micro.magnet.fsu.edu/primer/digitalimaging/cmosimagesensors.html
While smartphone shipments grew rapidly between 2012 and 2015, image sensor sales grew more modestly as the number of main cameras in smartphones during that period stayed relatively the same, typically one per phone, but that began to change in 2015/2016 as brands began to add camera to differentiate high-end models from low-end models (see Figure 4). At the same time the cost of image sensors decreased as volumes increased, keeping total image sensor revenue relatively flat through 2019. The COVID pandemic had only a minor effect on smartphone shipments in 2020, but competition among image sensor producers pushed down industry sales in 2021and brands began to respond by reducing the number of cameras on flagship models back to a more reasonable 3 while improving the camera quality.
This offset the reduced camera count and allowed image sensor sales to increase in 2021. Unfortunately the impact of inflation, the war in the Ukraine, and a generally more hesitant consumer is likely to take a toll on image sensor sales this year, as both smartphone shipments decline and consumers look for smartphone bargains, which translates into mid-range phones which tend to have a smaller number of camera and ones that carry a smaller premium. This will bring image sensor industry sales down y/y for the first time since we have been tracking the data, albeit after a strong 2021, with estimates for 2023 showing y/y growth, but still under trend line (see Figure 3).
This would indicate that the image sensor market is maturing and that it will track more closely to its underlying applications. The trend of increasing the number of cameras in smartphones seems to have ended, while resolution and quality improvements continue, which gives us confidence that image senor sales will grow, but likely at a slower pace than in the past. With smartphones still the largest image sensor application (64% share last year), much will depend on consumer’s perception of whether continuing camera/image sensor improvements are worth a premium, and we would expect that to be a relatively tough sell in the current environment, which leads us to feel that 2023 growth estimates should remain modest, as there do not seem to be any applications that are growing share rapidly.
We note that it has been difficult over the last few years to quantify image sensor application share growth. In Figure 5 we show application share in 2015 and in 2021 while the middle column shows the forecasts for 2022 that were made back in 2015, which predicted smartphone share to decline to 48% from 70% during that 6 year period, a 31.4% decline, while the actual (using 2021 actuals) was a decline of 8.6% and while the automotive sector was expected to see 367% share growth back in 2015, it grew at a lesser (167%) rate, albeit substantial. All in, we believe the image sensor market will continue to grow but will be more dependent on the growth of underlying applications and the macro environment than in the past, with producers looking for less concentrated markets where premiums remain high.
While we expect smartphones and related consumer product share will remain high, we expect to see the use of image sensors in industrial applications grow more rapidly as production environments utilize high-speed FWA systems and IoT to increase yield. Such changes do not happen overnight, but increased data collection across the factory is a given and image sensors are able to provide extremely rich data. As AI systems become more sophisticated facial recognition based security systems will become more commonplace, with image sensors again the source of that data, leaving an open ended path toward image sensor growth over the long-term. The road will be a bit bumpier than it has been in the past, but the necessity for visual, UV, or IR data will continue to increase, with image sensors as the collectors of that data.
This offset the reduced camera count and allowed image sensor sales to increase in 2021. Unfortunately the impact of inflation, the war in the Ukraine, and a generally more hesitant consumer is likely to take a toll on image sensor sales this year, as both smartphone shipments decline and consumers look for smartphone bargains, which translates into mid-range phones which tend to have a smaller number of camera and ones that carry a smaller premium. This will bring image sensor industry sales down y/y for the first time since we have been tracking the data, albeit after a strong 2021, with estimates for 2023 showing y/y growth, but still under trend line (see Figure 3).
This would indicate that the image sensor market is maturing and that it will track more closely to its underlying applications. The trend of increasing the number of cameras in smartphones seems to have ended, while resolution and quality improvements continue, which gives us confidence that image senor sales will grow, but likely at a slower pace than in the past. With smartphones still the largest image sensor application (64% share last year), much will depend on consumer’s perception of whether continuing camera/image sensor improvements are worth a premium, and we would expect that to be a relatively tough sell in the current environment, which leads us to feel that 2023 growth estimates should remain modest, as there do not seem to be any applications that are growing share rapidly.
We note that it has been difficult over the last few years to quantify image sensor application share growth. In Figure 5 we show application share in 2015 and in 2021 while the middle column shows the forecasts for 2022 that were made back in 2015, which predicted smartphone share to decline to 48% from 70% during that 6 year period, a 31.4% decline, while the actual (using 2021 actuals) was a decline of 8.6% and while the automotive sector was expected to see 367% share growth back in 2015, it grew at a lesser (167%) rate, albeit substantial. All in, we believe the image sensor market will continue to grow but will be more dependent on the growth of underlying applications and the macro environment than in the past, with producers looking for less concentrated markets where premiums remain high.
While we expect smartphones and related consumer product share will remain high, we expect to see the use of image sensors in industrial applications grow more rapidly as production environments utilize high-speed FWA systems and IoT to increase yield. Such changes do not happen overnight, but increased data collection across the factory is a given and image sensors are able to provide extremely rich data. As AI systems become more sophisticated facial recognition based security systems will become more commonplace, with image sensors again the source of that data, leaving an open ended path toward image sensor growth over the long-term. The road will be a bit bumpier than it has been in the past, but the necessity for visual, UV, or IR data will continue to increase, with image sensors as the collectors of that data.
Image Sensor Sales & ROC - Source: SCMR LLC, IC Insights
Smartphone Models - Number of Main Cameras/Unit - Source: SCMR LLC, GSMArena
Image Sensor Share by Application - Source: SCMR LLC, Yole Group
2020/2021 Image Sensor Sales Share by Producer - Source: Yole
RSS Feed