LG Innotek to expand camera module investment
LG Innotek (011070.KS) has decided to spend $233.4m to increase its presence in the camera module market. As smartphone cameras become more sophisticated and new applications for the automotive, drone, and security markets continue to evolve, the need for capacity continues to increase. While camera modules are the end product, much of the growth is in the CMOS sensor market that supplies to module makers. While smartphone cameras are the largest market for CMOS image sensors currently, the automotive market will likely see the most growth through 2020, as cameras replace mirrors and automotive systems such as collision avoidance and other semi-autonomous systems become more commonplace. The CMOS sensor market is expected to grow from $9.9b in 2015 to $15.2b in 2020.
Some camera module manufacturers are semi-captive, such as Samsung Electro-mechanical (009150.KS), who saw over 61% of its business going to Samsung Electronics (005930.KS) or affiliates in 2015, or Sony (SNE), with a number of independents like Truly (732.HK) and Primax (4915.TT), while Apple (AAPL) chose to buy Israel based LinX (pvt) last year for $20m, to move forward in the multi-aperture space that is becoming a standard for high-end smartphones. While ‘camera competition’ will see each successive model year with more sophisticated cameras ($7.3b by 2020), module producers will continue to expand their operations and likely smaller players will be unable to compete, however if the automotive market grows ($2.2b by 2020) as indicated, smaller module producers could tap into particular niches where they could maintain long-term relationships with automobile manufacturers or suppliers.
Some camera module manufacturers are semi-captive, such as Samsung Electro-mechanical (009150.KS), who saw over 61% of its business going to Samsung Electronics (005930.KS) or affiliates in 2015, or Sony (SNE), with a number of independents like Truly (732.HK) and Primax (4915.TT), while Apple (AAPL) chose to buy Israel based LinX (pvt) last year for $20m, to move forward in the multi-aperture space that is becoming a standard for high-end smartphones. While ‘camera competition’ will see each successive model year with more sophisticated cameras ($7.3b by 2020), module producers will continue to expand their operations and likely smaller players will be unable to compete, however if the automotive market grows ($2.2b by 2020) as indicated, smaller module producers could tap into particular niches where they could maintain long-term relationships with automobile manufacturers or suppliers.
CMOS Image Sensor Market Applications - 2015 - Source: IC Insight
CMOS Image Sensor Market Applications - 2020 - Source: IC Insights
LinX (Apple) Multi- Aperture camera modules - Source: LinX Imaging
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