Image Sensor Market Ends Its Long, Steep Growth to Face a More Cyclic Era

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Mountain View, CA - 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 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, shown in Figure 1.

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Figure: Image sensor revenues (visible range area arrays and packaged linear arrays, including captive production). Source: Strategies Unlimited (2009)

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 cameraphones 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 cameraphones, and Panasonic has already done so.

Koreans make huge strides. Meanwhile, Korean and Taiwanese suppliers are gaining market share, especially for cameraphones. 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.

Image Sensors: Market Review and Forecast-2009 is the fifth in a series by Strategies Unlimited and it continues to be the most comprehensive and in-depth market report on the subject. It includes all image sensing applications in the visible spectrum, including scintillator-coated arrays for x-ray radiography. The study draws heavily on Strategies Unlimited’s extensive interviews with suppliers in Japan, Korea, the U.S., and Europe, combined with its deep expertise in this market. For more information, contact Strategies Unlimited at +1 650 941-3438 (voice) or e mail at info@strategies u.com, or check the company's web site at www.strategies-u.com.

Founded in 1979, Strategies Unlimited specializes in market research and strategic consulting directed at optoelectronics and compound semiconductors. The company, based in Mountain View, California, is a research unit of PennWell Corporation, a global media and information company serving the energy and advanced technology markets since 1910. PennWell's many brands include Industrial Laser Solutions, Laser Focus World, Bio Optics World, Photovoltaics World, Solid State Technology Vision Systems Design, and Lightwave,. For further information, go to www.pennwell.com.

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