To Catch up with Sony
Samsung Electronics will convert one of its DRAM fabs into a complementary metal oxide semiconductor (CMOS) image sensor (CIS) line in 2021. By doing so, the global semiconductor giant will ramp up its production capacity of CISs by about 20 percent.
"Orders for CISs of more than 108 million pixels are currently increasing, but production is limited. One DRAM fab will be changed to a CIS line next year," said Park Yong-in, head of the Sensor Business Team of Samsung Electronics' System LSI Business Division in a closed-door Q&A session at the Samsung Electronics Investment Forum 2020 held on Nov. 30. Market watchers estimate that the fab mentioned by Park is the 13th line in Hwaseong, Gyeonggi Province, which makes DRAMs with 12-inch (300 mm) wafers.
Currently, Samsung Electronics' CIS production capacity is 100,000 sheets of wafer per month. They are worth US$4.26 billion a year in terms of sales revenue. Considering the production capacity of Hwasung's 13th line and a drop in the initial yield due to the change of products, Samsung Electronics' CIS production is expected to reach 120,000 to 130,000 sheets of wafer per month in 2021 and beyond. If so, Samsung will be able to significantly narrow its gap with Sony (137,000 sheets of wafer per month) in 2021. Sony is the top player in the world's CIS market, according to Omdia, a market research firm.
The reason why Samsung Electronics decided to expand its CIS production capacity is because demand for premium image sensors has been spiking. These days, new smartphone models generally have three cameras and four to five cameras can be found in high-end models. An increase in camera sales fuels demand for image sensors.
The trend is expected to continue. Market research firm TSR says that the average number of pixels per smartphone is expected to swell from 59 million in 2020 to 112 million in 2024. This indicates that demand for CISs will climb. The CIS market is expected to expand from US$19.7 billion in 2020 to US$27 billion in 2024.
Much of future demand for image sensors is expected to come from self-driving cars and robots. The growth of the self-driving car and robot markets is also cited as a major contributor to the expansion of CIS production. The total size of the sensor (including CIS) market will increase by 12 percent annually from US$47 billion in 2020 to US$143 billion in 2030, KPMG, a global consulting firm, predicted.
As China's top smartphone maker Huawei is collapsing due to U.S. export regulations, Samsung Electronics needs to expand its sensor business even more. It is urgently needed for Samsung Electronics to expand its sensor production capacity as Huawei, which has used CISs from Sony, has been losing its market share in smartphones, while Xiaomi, which uses CISs from Samsung Electronics, has been expanding its market presence. In 2019, Samsung Electronics developed the world's first 108-megapixel CIS and delivered it to Xiaomi.
Sony is clearly feeling nervous about Samsung's offensive. Sony is investing 100 billion yen to expand its production line in Nagasaki Prefecture of Japan. Recently, a Sony official said, "We will scale up our market share to 60 percent by 2025."
Samsung Electronics is planning to focus on developing technologies along with facility expansion. Sony is about to enter the market for time of flight (TOF) sensors. The company is also planning to develop an image sensor that has a pixel size of 0.6 mm.