MOUNTAIN VIEW, CA - The image sensor and module market will exceed $4 billion in 2005, led by the camera phone application, according to a new report from market research firm Strategies Unlimited. The report, “Image Sensor Market Review and Forecast-2005,” highlights the growing importance of the competing approaches for imaging products: from the fabless model to traditional vertical integration, and everything in between.
Four Japanese companies continue to lead in market share: Sharp, Sony, Toshiba, and Matsushita, in that order. But Japanese companies are no longer producing only CCDs. Two of them are now among the largest producers of CMOS arrays. Other leading suppliers of CMOS arrays include Omnivision and Micron. Micron is finding success by leveraging its DRAM facilities, while Omnivision is the leader with the fabless approach. The percentage of image sensors manufactured by independent foundries (such as TSMC) has declined, as the major Japanese manufacturers gain traction in CMOS imagers.
In fact, the importance of the manufacturing strategy was highlighted this year when Eastman Kodak launched its new fabless CMOS effort, announcing that it will outsource the fabrication, test, and module assembly to Asian companies. There is also increasing stratification between the chip fabrication and the module assembly. For example, Flextronics took over the camera module business from Agilent Technologies and is now a strong player in module assembly, along with several other Asian companies.
“The CMOS vs. CCD debate is essentially over, and our interest is in the battle of the business models,” says Tom Hausken, director of components research at Strategies Unlimited. “The market is naturally stratifying the supply chain, eliminating inefficiencies and dividing the margins among the layers. The challenge for suppliers now is to find the best way to defend the value in the imager so that it doesn’t become a commodity.”