Strategies Unlimited says image sensor market ends steep growth; heads into cyclic era

Aug. 21, 2009

August 21, 2009--The market for image sensors will decline to $6.4 billion in 2009, a drop of 11% from 2008 and the first decline since Strategies Unlimited (Mountain View, CA) began tracking the market in 1997. Growth is expected to return in 2010, but the average growth rate will be in the single-digits in coming years, following over a decade of 22% compound annual growth.

August 21, 2009--The market for image sensors will decline to $6.4 billion in 2009, a drop of 11% from 2008 and the first decline since Strategies Unlimited (Mountain View, CA) began tracking the market in 1997 (see also "New report says low-power laser materials processing market downturn creates opportunities"). Growth is expected to return in 2010, but the average growth rate will be in the single-digits in coming years, following over a decade of 22% compound annual growth.

In its report, Image Sensors: Market Review and Forecast-2009, the fifth in a series, Strategies Unlimited details all image sensing applications in the visible spectrum, including scintillator-coated arrays for x-ray radiography. The report draws heavily on Strategies Unlimited's extensive interviews with suppliers in Japan, Korea, the U.S., and Europe.

The report also discusses the following trends:

A new, more cyclic phase
The current global economic cycle is driving a temporary decline, but cycles will have a stronger effect going forward, now that the perfect convergence of forces leading to rapid growth in image sensor revenues for camera phones is maturing. There will still be growth in unit sales in coming years for image sensors overall, but short-term fluctuations in demand, periods of oversupply and shortage, and severe price pressure will make it more challenging to stay competitive than before.

Turmoil in Japan
Japan used to dominate world image sensor production, and still manufactures over 90% of the world's CCDs. CCDs continue to dominate in digital still cameras and security cameras. Even so, Fujifilm stopped production of image sensors for its line of cameras in 2007. Sony is thinking of stopping its production of CMOS arrays for camera phones, and Panasonic has already done so.

Koreans make huge strides
Meanwhile, Korean and Taiwanese suppliers are gaining market share, especially for camera phones. Samsung grew 61% from 2006 to 2008, placing it among the top suppliers. We are also seeing increased competition from other Korean and Taiwanese companies, such as SETi, SiliconFile Technologies, and PixArt Imaging. Hynix reentered the image sensor business in the second half of 2008. These companies are focusing on the China handset market.

Founded in 1979, Strategies Unlimited specializes in market research and strategic consulting directed at optoelectronics and compound semiconductors. The company is a research unit of PennWell Corporation, a global media and information company serving the energy and advanced technology markets since 1910.

For more information, go to www.strategies-u.com.

--Posted by Gail Overton, [email protected]; www.laserfocusworld.com.