Q2 2019 has exceeded our expectations (+7%), but there is little good news beyond mobile.
In 2019, the CMOS image sensor industry still enjoys thriving growth thanks to the mobile market. But after conducting a quarterly analysis focused on individual markets and players, the picture is in fact much different than what the global number show. What is the latest news? What is the status of market indicators? Is the market growing or decreasing? What are the revenues of the leading companies? What are their strategies for capitalizing on market evolution? Yole Développement (Yole) addresses these questions today in our CMOS Image Sensor (CIS) Quarterly Market Monitor Q3 2019 analysis. Recently, Yole’s analysts have provided similar analyses for memory markets like DRAM and NAND, and the CIS Quarterly Market Monitor is the latest chapter in this initiative.
CIS’ extensive growth has seen this semiconductor specialty market reach a revenue of $15.5B in 2018. The size and dynamics of the main CIS markets and players led Yole to conclude that a CIS quarterly monitor was essential for better monitoring and a deeper understanding of the market’s short and medium-term trends. Meanwhile, the broader five-year forecast will still be delivered on a yearly basis via our Status of the CMOS Image Sensor Industry report. Both products are positioned as two complementary analyses of the same industry, under the Yole Imaging Research umbrella.
The CIS industry: a market with its own growth engine
In line with last year’s published forecast in our Status of the CIS Industry 2018 report, the CIS industry is exactly where Yole’s analysts predicted it would be at this time of year. While Q1 2018 was a little treacherous, Q1 2019 was representative of the last five years’ seasonality, and then Q2 2019 was actually slightly better (+7%) than expected. These are traditionally the two smallest quarters for CIS, when mobile and consumer product sales are at their lowest. Mobile represents 68% of overall CIS sales, and according to Yole’s analysts this will not change much over the next five years.
In the immediate future, our analysts expect CIS quarterly sales to reach $4.6B in the fourth quarter, mirroring the expected 10% YoY growth rate for 2019. This is an incredible double-digit growth prospect, especially in the context of mobile saturation and overall industry cyclical recession. Yes, Yole’s analysts can confirm: CIS definitely has its own growth engine – an engine powered by the proliferation of cameras in mobile, which have hit new heights in 2019 since most high-end flagships deliver 5 – 6 cameras per phone. Yole expects this trend to continue over the next 3 – 4 years, before coming to a somewhat abrupt end. Our analysts have arbitrarily set their YoY growth expectation at 1% in 2024 to bring this insight to light, and chase away the trolls if for no other reason.
Q1 & Q2 2019: Automotive and security become the 2nd-largest CIS market segments
If we peer below the CIS market’s surface, things begin to look way more interesting – lending more value to our quarterly analysis.
Since Q4 2017, “all markets except mobile” have been on a downward slope. At that time, they had reached $1.5B, but are now down to $1.1B, a -26% drop. This “all markets except mobile” aggregate is usually less sensitive to seasonality. These markets went through rough times in 2016 for several reasons, but were actually exhibiting high-growth momentum on a multi-annual basis. In fact, the sum of these markets had doubled from Q1 2015, which translates to a +26% CAGR during 2015 – 2017. But then we basically lost a full year’s growth – so what is actually happening before our quarterly-monitoring eyes?
Looking closer at the “other” market breakdown, we observe that the two largest segments, consumer photography (DSC, DSLR, action cameras, drones) and computing (PC, laptop, tablets), have been on a slippery slope for a long time and are now on par with the other two segments: automotive and security.
Q1 2019 and Q2 2019 are notable as the first time that automotive, and then security, became the second-largest CIS segments. This is definitely breaking news, and it will affect the rankings and strategy of the main CIS players. However, this is not all “honor and glory” for the automotive and security markets:
- The downturn in the Chinese and U.S. automotive markets is affecting automotive CIS sales, despite the growing number of cameras per car. While Yole’s initial five-year growth expectation was +19% CAGR for automotive CIS, YoY growth for 2019 is heading towards a -5% to -10% decrease.
- The same is more or less true for security, which Yole’s analysts originally announced a five-year +19% CAGR expectation for. Unfortunately, YoY growth will likely end up flat in 2019.
The largest disappointment is the industrial segment, which had enjoyed a +26% CAGR from 2014 – 2017. But after reaching $135M in Q4 2017, it is now back in the $100M-per-quarter range. A global halt to capital expenditures in the semiconductor and automotive industries is probably the main reason. On the bright side, positive news from China leads us to the conclusion that this was simply a needed adjustment due to cyclical markets, and that growth could resume in 2020 since the bottom seems to have been reached. Time will tell, and the quarterly analysis will be an indispensable resource with which to follow these CIS markets.
Imaging industry: what’s next?
Yole’s analysts work with the leading CIS players to collect and analyze valuable market and technology data. Other benefits include gaining an understanding of these players’ vision for the industry, and evaluating market growth and technological evolution on an ongoing basis.
Yole’s CMOS Image Sensor Service – Imaging Research will be published every quarter, at the beginning of March (Q1), June (Q2), September (Q3), and December (Q4), providing readers with an up-close analysis of the main CIS markets and key players.
Additionally, Yole’s Imaging team attends a year-long selection of key conferences, trade shows, and webcasts. These onsite/online events provide opportunities for Yole’s imaging experts to share their vision of the industry and debate with leading players.
- In early September, our Imaging team was pleased to welcome leading companies to the 2nd Executive Forum on 3D Sensing for Consumers, powered by Yole.
During these few hours, imaging companies and Yole’s analysts had the opportunity to exchange and debate over the latest technical and market trends. Each leading player’s strategy was discussed, and business opportunities were identified. You can view the post-show report and presentations on i-Micronews.com.
- Last June, Yole’s Imaging team revealed its detailed vision of the imaging market for automotive during a dedicated webcast: Automotive Imaging on its Way to Sensing. Along with experts from System Plus Consulting, Yole’s analysts had the opportunity to highlight and analyze the penetration of imaging technologies within the automotive market segment.
“Automotive imaging has reached market significance well beyond what consumer digital cameras achieved at their peak in 2012”, asserts Pierre Cambou, Principal Analyst, Photonics, Sensing, and Display Division at Yole. “124 million camera units were produced for automotive applications in 2018, slightly more than the 96 million light vehicles made that year. The key indicator here is the average number of cameras per car, which is expected to rise towards three by 2024….”
This webcast is still available – you can watch the recorded version on i-Micronews.com.
Stay tuned to i-Micronews.com for more information about our Imaging activities!
Contact: Camille Veyrier, Director, Marketing & Communication, Yole Développement
Pierre Cambou has been part of the imaging industry since 1999. He first took several positions at Thomson TCS, which became Atmel Grenoble in 2001 and e2v Semiconductors in 2006. In 2012 Pierre founded Vence Innovation, later renamed Irlynx, to bring to market an infrared sensor technology for smart environments and interactions. He has an Engineering degree from Université de Technologie de Compiègne and a Master of Science from Virginia Tech. Pierre also graduated with an MBA from Grenoble Ecole de Management. In 2014 he joined Yole Développement as Principal Analyst, Imaging at Yole Développement (Yole).
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