"Image sensors are important, like electronic eyes, and we will provide them to customers around the world," Sony Corporation President Hiroki Totoki said at a ceremony marking the completion of an expansion at the Nagasaki Technology Center, where the company makes image sensors.
Cleanroom space at the facility has been expanded by 60% since the summer of 2022. Sony also plans to build a new image sensor plant in Kumamoto Prefecture, Japan.
The company forecasts consolidated net profit to fall 13% to 880 billion yen ($6.1 billion) for the fiscal year ending March 2024. Semiconductor operating profit will fall 8% to 195 billion yen.
Still, semiconductors generated an operating profit margin of 22% in fiscal 2019, the highest among Sony’s six business segments. That figure is expected to reach 12.3% this fiscal year.
One factor that led to the decline in semiconductor profits was a sharp decline in the supply of image sensors to Huawei. Once the world's largest smartphone maker by sales, Huawei was one of Sony's key customers.
However, the company's phone sales have plummeted after being caught up in the US-China trade conflict, and the impact has spread to Sony.
Meanwhile, Apple - Sony's largest image sensor customer - continues to place large orders, making it harder to increase orders for other customers.
Sony has expanded its capacity in Nagasaki with the aim of securing more sales to Chinese smartphone makers in the long term. Xiaomi and Oppo are two such targets.
Last year, Sony launched the Lytia image sensor brand targeting the Chinese market and designated Nagasaki as a supply center.
According to Yasuo Nakane, an expert at Mizuho Securities, Sony "is promoting sales focusing on main cameras and emphasizing profits".
The group has also been busy improving productivity, transferring engineers from other plants to Nagasaki since this spring to boost production.
Engineers are tasked with improving the productivity of the new image sensor, with mass production starting at the Nagasaki center in 2023.
This technology improves the quality of images taken at night but has problems scaling up production.
With the smartphone market becoming saturated, Sony plans to develop logistics as a new source of revenue.
Last month, the company launched an efficient warehouse management service that uses image sensors with artificial intelligence capabilities.
The platform automatically tracks truck arrivals and departures and analyzes loading and unloading times. The service is expected to see increased demand as Japan introduces tougher overtime restrictions for truck drivers next year.
(According to Nikkei)
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