Huawei has limited supplies, and the tug of war between SONY and Samsung over image sensors is about to heat up（Two）

 As a latecomer to the market for image sensors, Samsung has been doing small-scale business with Apple and Huawei, while attracting smaller customers such as Xiaomi and Vivo. According to market rumors, Chinese handset makers second only to Huawei want to share the existing market share of Huawei's mobile phones. Therefore, Samsung can be said to benefit from the related export restriction policies of the United States, and is likely to benefit from the rise of Chinese smartphone manufacturers.

 

For SONY, the executives involved have a strategy for dealing with Samsung. "Looking ahead to fiscal year 2021, we will strive to expand and diversify our customer base," Executive vice President Hiroki Totoki said at a press conference in October. "Profitability is expected to recover strongly in fiscal 2022," he added.

 

But industry analysts said it would be difficult for SONY to make up for the drop in supplies to Huawei by increasing sales to other companies this fiscal year.

 

"SONY's sensors may not be able to meet the demanding demands of today's higher-end smartphone makers for high pixels," said Tetsuo Omori, senior analyst at Japanese research firm Techno Systems Research.

 

Samsung's biggest advantage is that it is an integrated electronics maker, covering everything from memory chips to electronics manufacturing, while SONY focuses on image sensors in its semiconductor business. Samsung's chip business grew more than tenfold in sales as it applied its cutting-edge production technology to image sensors. In the production equipment and material procurement, has the scale advantage.

 

Samsung manufactures electronic components for use within the group and is also improving the quality of its entire camera module, including image sensors. In addition, Samsung produces its own hd oled panels, which are essential for smartphones, and offers a variety of price ranges under the Galaxy brand.

 

As the smartphone maker with the largest global market share in 2019, Samsung can also adjust the supply and demand of image sensors to make them more user friendly by combining them with smartphones. The image sensor business is one of SONY's main revenue streams, with an operating profit of 240 billion yen in the year to March 2019, almost the same as the video game business. But when it reported second-quarter earnings in October for its fiscal 2020 fiscal year, SONY forecast a 66% drop in image sensor profits for the full fiscal year.

 

But apple, which has been in the spotlight of late and has just released a phone that is getting a lot of attention, could be SONY's saviour. If demand for the iPhone 12 remains strong, SONY may be able to make up for some of the damage done by Huawei without an irreversible impact on the business. In the core components of smartphones, Japan has invested heavily in LCD panel production. But when it comes to investment, they lost their competitive edge to Chinese and South Korean rivals. SONY, however, has taken a different tack.

 

Samsung has set a goal of overtaking SONY as the world's largest maker of image sensors by 2030. The tug-of-war between SONY and Samsung over image sensors is about to heat up, just as US export restrictions on Huawei start to change the competitive landscape in the smartphone market fundamentally.

 

From a global perspective, SONY could be caught in a vicious circle in which, in the absence of stable demand expectations, it becomes cautious about investing and loses competitiveness.