Understanding CMOS Image Sensors: Chinese Manufacturers Will Not Be Absent

Image sensors are among the most widely used and important sensors today. They primarily employ an array of photosensitive units and auxiliary control circuits to acquire the brightness and color signals of an object, and output digitized image information through complex signal and image processing techniques. The photosensitive units in an image sensor typically use photodiodes to convert photoelectric signals. When illuminated, a photodiode generates a current signal, the intensity of which is directly proportional to the intensity of the light.

Image sensors are the core component of mobile phone camera modules. Image sensors are mainly divided into two categories: CCD image sensors and CMOS image sensors. Both CCD and CMOS utilize photodiodes for photoelectric conversion, transforming images into digital signals, but they differ in the signal processing circuitry surrounding the photodiode and the processing methods for the electrical signals generated by the photosensitive units. CMOS (Complementary Metal Oxide Semiconductor) technology, as a rising star, has received significant attention and research resources since the 1990s, gradually catching up with CCD (Charge-Coupled Device). Currently, it holds a dominant position in the image sensor market, with CMOS sensors boasting significant advantages and accounting for 90% of the market share.

(1) The pixel array of the sensor undergoes a photoelectric effect;

(2) The photoelectric effect causes each pixel unit in the pixel array to generate a charge signal corresponding to the external color and brightness;

(3) The signal is converted into a digital image signal by an analog-to-digital converter;

(4) The digital signal is processed by an ISP integrated on the same chip and then output. Simply put, a CMOS sensor is like a solar cell matrix, with each pixel being a cell in the matrix. Each cell is charged according to the brightness and color arrangement in front, and by counting the charge of each cell, the corresponding brightness and color can be obtained, thus reproducing the real scene.

CMOS sensors integrate image sensing and signal conversion functions onto a single chip. CMOS image sensors have experienced rapid growth in recent years and are nearing complete replacement of CCD sensors. According to IC Insights, in 2017, CMOS sensor sales accounted for 89% of total image sensor sales (compared to only 54% in 2007), and shipments accounted for 81% of total image sensor shipments. Given this 81% market share in 2017, we believe that CMOS sensors, with their superior cost-effectiveness, will continue to maintain their absolute advantage and further squeeze the market share of CCDs.

1.CMOS image sensor chips utilize standard process technology suitable for mass production, resulting in a significantly lower unit cost compared to CCDs during mass production.

2.CMOS sensors integrate the image acquisition unit and signal processing unit onto the same substrate, reducing size while maintaining low power consumption and low heat generation, making them ideal for mobile devices and various miniaturized devices.

3. In contrast, CCD sensors are not cost-effective and are large, generate significant heat, and consume high power, making them unsuitable for most current electronic products.

The CMOS image sensor market is projected to grow from $4 billion in 2007 to $19 billion in 2022.

Mobile phones are the largest application market for CMOS sensors, with rapid growth in emerging application areas such as automotive and security. In 2017, the market size of CMOS sensors for mobile phones accounted for 62% of the overall application market, reaching $7.75 billion. It is estimated that the market revenue of CMOS sensors for mobile phones will reach $8.6 billion by 2022. In the coming years, automotive, security monitoring, medical, toy/gaming, and industrial applications will be the main drivers of the rapid development of CMOS sensors.

The automotive sector will become the second largest application market for CMOS sensors. 3) Medical/Research Field: Previously, CCD sensors were primarily used in the medical and research fields. However, with technological advancements, these fields are now seeking to replace most older products with lower-cost and higher-performance CMOS sensors. This application area is projected to have a CAGR of 34%, with sales reaching $867 million in 2020.

Against the backdrop of increasingly diverse application scenarios for CMOS sensors and ever-increasing performance demands from end-users, CMOS sensors are undergoing rapid technological iteration, with major manufacturers frequently releasing new cutting-edge technologies. Taking image quality (especially in low-light environments) and imaging speed as examples of the two fundamental requirements, the industry has proposed a wealth of solutions:

1.Low-light imaging capability is crucial for image sensors in mobile phones, cameras, and industrial applications, especially for security and automotive image sensors that require 24/7 operation. The industry-standard solution is to increase sensor size and light intake, thereby increasing the area per pixel. Besides this, two other methods are using BSI-CMOS (back-illuminated CMOS image sensors) and near-infrared light technology.

Benefiting from back-illuminated and near-infrared light technologies, the imaging quality of CMOS sensors in low-light environments is significantly improved.

2. High-speed sensors can better capture moving objects, providing features such as multi-frame noise reduction, slow-motion video recording, and reduced image distortion. This is significant for mobile phone photography, traffic monitoring, and autonomous driving. When there is a high-speed relative displacement between the camera and the subject (such as capturing a golf swing or a lamppost from a moving vehicle), problems such as curved lines, blurred image edges, and incorrect exposure in parts of the image occur, known as the rolling shutter effect. The root cause of the rolling shutter effect is that the image sensor cannot quickly capture all pixels; therefore, high-speed sensors have emerged.

To address the rolling shutter effect, the industry currently offers two solutions: one is a three-layer stacked image sensor equipped with DRAM, designed for consumer electronics such as mobile phones. This sensor directly stores data in the integrated DRAM to achieve high-speed photography and image capture. The other is a global shutter sensor designed for industrial applications. Compared to traditional rolling shutter sensors that expose line by line, the global shutter exposes the entire sensor simultaneously to capture distortion-free images of moving objects, which is of great significance for machine vision and security fields.

To achieve high-speed imaging capabilities, CMOS sensors have developed two main technological paths:

Besides the requirements for image quality and speed, there are also miniaturization needs in the medical field (OmniVision's medical endoscope CMOS sensor is only 0.5mm square); high reliability and high sensitivity needs in the automotive field; and low cost needs for widespread application in the Internet of Things (IoT) field. Driven by both technological advancements and evolving needs, CMOS sensors are rapidly evolving.

Sony, Samsung, and OmniVision Lead the Way, Domestic Manufacturers Focus on Mid-to-Low-End Market

CMOS sensors belong to the typical semiconductor industry capable of large-scale mass production, exhibiting significant economies of scale. However, substantial upfront investment is required to achieve results, leading to a situation where the strong remain strong. Currently, there are dozens of CMOS sensor manufacturers, but according to YOLE statistics, in 2016, the top three manufacturers—Sony, Samsung, and OmniVision—held a combined market share of 72%, indicating high market concentration.

CMOS sensor market concentration increased in 2016, with the three giants holding a combined market share of 72%.

Sony firmly holds the top spot in the CMOS sensor market, followed closely by Samsung and OmniVision. According to YOLE statistics, industry leader Sony held a 42% market share in 2016, with products covering various consumer electronics and industrial applications, focusing on the high-end market and possessing the strongest technological capabilities. Secondly, Samsung, primarily targeting the consumer electronics market, largely operates a self-production and self-sales model. Technologically, it closely follows Sony and can already provide CMOS products at the same level as Sony. However, Samsung's CMOS sensors have relatively fewer applications in industrial sectors. Thirdly, OmniVision Technologies has deep experience in industrial applications, especially in automotive CMOS, where its market share surpasses Sony's.

Among the three leading CMOS sensor manufacturers, Sony has a significant advantage in scale.

In flagship and mainstream products across various downstream sectors, the vast majority utilize CMOS sensor solutions from these three giants. It can be seen that several recently popular mobile phones use CMOS sensors from Sony, Samsung, and OmniVision. These three manufacturers control a large portion of the CMOS sensor market share in the consumer electronics sector. In industrial applications such as automotive and security, products from ON Semiconductor, OmniVision, and Sony are generally preferred, with Samsung's CMOS sensors typically only found in its own end products.

Popular mobile phones primarily use CMOS sensors from Sony, Samsung, and OmniVision.

Besides these three giants dominating the mainstream market, there are two other players positioned in the high-end and low-end markets. However, in terms of market size and downstream customer base, they cannot compare with the mainstream market. In the last two sections, we will first introduce the CMOS sensors from Sony, Samsung, and some domestic manufacturers. We will focus on OmniVision in Chapter 3.

The three major CMOS sensor manufacturers differ significantly in terms of shipment volume and ASP.

I. Sony: Technologically Leading, Firmly Holding the Top Spot

The CMOS sensor business, belonging to Sony's semiconductor division, has become one of Sony's most profitable pillar businesses. Even before the widespread adoption of CMOS image sensors, Sony's CCD image sensors, with their advantages in sensitivity and signal-to-noise ratio, were widely used in surveillance, transportation, and other fields. As CMOS image sensors have gradually become mainstream, Sony continues to lead the market, relying on its strong technological capabilities accumulated during the CCD era. In 2016, its CMOS sensor sales reached $4.858 billion, accounting for 70% of the entire semiconductor division's revenue. In its fiscal year 2017 (April 1, 2017 to March 31, 2018), Sony's semiconductor business, driven by strong CMOS sales, achieved sales of 850 billion yen (approximately US$7.79 billion), a 10% year-on-year increase; operating profit reached a record high of 164 billion yen (approximately US$1.5 billion).

After years of development, Sony has become a leader in the industry in terms of technology, boasting superior product performance, a constant stream of new technologies, and rapid iteration, making it difficult for competitors to challenge its leading position in the short term. In the consumer electronics field, Sony's most representative technology is stacked sensor technology. Stacked sensors were immediately embraced by mobile device manufacturers upon their introduction, and Sony further developed a three-layer stacked sensor with DRAM.

Sony pioneered stacked sensor technology.

In industry applications, Sony has two main technologies: STARVIS and Pregius. STARVIS, primarily used in the security field, is a technology that further enhances the sensitivity of back-illuminated CMOS sensors. It not only enhances visible light sensitivity but also improves the utilization efficiency of a wide wavelength range of light, such as near-infrared light, which is frequently used in surveillance cameras. Pregius, Sony's name for its Global Shutter technology, works by adding storage units beneath each pixel. During exposure, all pixels are exposed simultaneously, and the information is stored in the corresponding storage units to avoid the rolling shutter effect. This technology is mainly used in industrial machine vision.

Sony's STARVIS technology further enhances CMOS sensitivity.

In terms of products, Sony has established the industry's most comprehensive CMOS product line, covering various fields and maintaining a strong market share in the mid-to-high-end segment. In the consumer electronics sector, Sony CMOS sensors have become the most common choice for major manufacturers and a standard feature in high-end products, whether for mobile phones or cameras. For example, the IMX400 series CMOS, released in the second half of 2017, was immediately sought after by major manufacturers. The Huawei P20 Pro, which shone brightly earlier this year for its outstanding photography capabilities, also uses Sony's latest IMX600 sensor. In most industry sectors, especially in niche areas such as security and industrial vision, Sony is also a leader. Only in some high-end areas does it still lag behind established industrial-grade image sensor suppliers such as Teledyne Dalsa, ON Semiconductor, and e2v.

II. Samsung: Leveraging Group Resources to Rise to Prominence in the Consumer Sector

Samsung's consumer CMOS sensors have consistently kept pace with Sony, gradually narrowing the technological gap. Now, whenever Sony releases a new CMOS sensor for mobile phones, Samsung can quickly follow suit with a product offering similar performance. For example, shortly after Sony released its three-layer stacked CMOS sensor IMX400, Samsung launched the competing S5K2L3, using it in its flagship S and Note series phones, demonstrating excellent performance. In recent years, Samsung has adopted a mixed supply principle for the main camera CMOS sensors of its flagship phones, using both Sony's IMX series and Samsung's ISOCELL sensors in different regions and versions of the phone.

In 2013, Samsung introduced ISOCELL technology, resulting in a significant improvement in the performance of its CMOS sensors. In fact, before the Galaxy S5, Samsung sensors were primarily found in entry-level smartphones costing around 1000 yuan. Afterwards, Samsung incorporated ISOCELL technology into the Galaxy S5, and its performance gained market recognition. Coinciding with a shortage of Sony CMOS sensors, the already well-known Samsung CMOS sensors were promoted, and domestic manufacturers such as Huawei, Meizu, Xiaomi, and OPPO began experimenting with them in some models. This opened the door for Samsung CMOS sensors to the mid-to-high-end market.

Samsung's ISOCELL technology reduces crosstalk between pixels.

However, in industrial applications, Samsung lags behind its competitors. In the automotive CMOS field, Samsung's market share is almost zero. In other industrial applications such as security, Samsung's CMOS sensors are essentially self-produced and self-sold. However, Samsung's CMOS business is backed by the entire Samsung Group, and its application potential across various product lines is significant. With the strong financial resources and support of the Samsung Group, Samsung's CMOS sensor business is expected to accumulate stronger competitiveness in the future.

Domestic CMOS Manufacturers:

Primarily targeting the low-to-mid-end market, actively developing independent technologies

Generally speaking, domestic CMOS sensor manufacturers still lag behind foreign manufacturers in terms of scale and technology, with their products mainly used in the low-to-mid-end consumer electronics sector. However, some leading domestic CMOS sensor manufacturers, such as Superpix and Galaxycore, are gradually expanding their market share and penetrating the mid-to-high-end market by relying on their independent core technologies.

I. Superpix

Founded in 2004, Superpix Microelectronics Technology Co., Ltd. is a fabless manufacturer specializing in the R&D and sales of CMOS image sensors. Based on its independent core technologies, "SuperPix" signal processing technology and "SuperImage" technology, the company has developed a large number of domestically leading CMOS image processors. The company focuses on low-pixel CMOS products, with main products covering 300,000 pixels, 1.3 million pixels, 2 million pixels, and 5 million pixels. These products are relatively inexpensive and enjoy high acceptance in the low-to-mid-range market, being widely used in mobile phone cameras, tablet cameras, and computer cameras.

Having established a foothold in the low-to-mid-range market, Smartisan is now seeking to expand into the mid-to-high-end market. After 2015, the company developed 8-megapixel and 12-megapixel chip products and successfully launched them to the market, achieving a good response. Its CMOS products have also entered the supply chain of some popular mobile phones, such as the 360 N7 phone. Smartisan's main products

In addition to the above application areas, Smartisan has achieved some innovative results in the research and development of high-value-added special sensor chips for fingerprint recognition, iris recognition, medical imaging, and surveying:

(1) In cooperation with partners, Smartisan has successfully developed a high-precision optical fingerprint recognition sensor chip and an ultra-thin optical fingerprint recognition module. This technology offers higher resolution and liveness detection, significantly improving the security of fingerprint recognition.

(2) Iris recognition image sensor chips are used by partners in new products such as iris recognition mobile phones, iris recognition tablets, and smart door locks.

(3) Medical endoscope CMOS image sensor chips are used in medical equipment such as cardiovascular minimally invasive surgery and gastroscopy.

(4) CMOS image sensor chips for observation equipment are used in domestically produced observation equipment.

(5) Machine vision chips are used in fields such as reading pens, drone hovering positioning, and industrial ranging.

The company was listed on the National Equities Exchange and Quotations (NEEQ) in 2015 and is one of the target companies in Will Semiconductor's ongoing asset restructuring. The company's operating revenue in 2016 and 2017 was RMB 461 million and RMB 462 million, respectively, with net profits of RMB 2.92 million and -RMB 14.88 million, respectively. The main reason for the profit decline is the slowdown in the mobile phone market, which weakened demand for mid-to-low-end CMOS products. Intense competition in the mid-to-low-end market led to a decrease in product prices and gross margins, thus impacting profits.

Spicore's Recent Performance and Gross Margin

Founded in 2003, GalaxyCore primarily engages in the design, development, and sales of CMOS image sensors, LCD driver chips, high-end embedded multimedia SOC chips, and application systems. Initially, GalaxyCore started with CMOS sensors for computer cameras, and entered the mobile phone market in 2007. Leveraging the rapid growth of the Chinese mobile phone market, it quickly captured the mid-to-low-end market.

In 2014, GalaxyCore shipped over 940 million CMOS image sensor chips and over 100 million LCD driver chips, with total sales exceeding US$350 million. It ranked first in CMOS image sensor chip shipments in China and second globally. However, Galaxycore's foray into the high-end market subsequently faltered, while facing strong competition from companies like Smartsens in the mid-to-low-end market.

Galaxycore's Major Technological Breakthrough

Other major domestic CMOS manufacturers include BYD Microelectronics, Changguang Chenxin, and Ruixin Microelectronics.

Established Manufacturer OmniVision is Poised for Takeoff

OmniVision, previously acquired by domestic capital, is also a significant player in the sensor field. Due to its unique position, we will discuss it separately here.

OmniVision (OV) was founded in California, USA in 1995 and is a leading provider of digital image processing solutions. Its CameraChip and AmeraCubeChip series of CMOS image sensor chips are widely used in consumer and industrial applications. OmniVision went public on NASDAQ in 2000. A Chinese consortium completed its privatization of OmniVision in 2016 and planned to list it on the A-share market. In May 2018, Will Semiconductor announced the resumption of its acquisition of OmniVision.

OmniVision holds approximately 12% market share in the CMOS sensor market, significantly outpacing the second-tier competitors. OmniVision's CMOS sensor sales reached $1.25 billion and $1.44 billion in 2015 and 2016 respectively (according to YOLE statistics), representing market shares of 12.2% and 12.4%. This scale is second only to Sony and Samsung, and twice that of ON Semiconductor, which ranks fourth.

The company's downstream applications primarily involve smartphones, automotive cameras, medical cameras, surveillance equipment, drones, and VR/AR cameras. According to a CCD/CMOS image sensor market analysis report compiled by BDO, OmniVision holds a 56% market share in the security sector and a 29% market share in the automotive sector. In addition, OmniVision is also showing rapid growth in many emerging fields such as medical imaging, the Internet of Things (IoT), and specialized applications.

As a long-established manufacturer in the CMOS field, OmniVision possesses industry-leading technological strength. As of the end of May 2018, OmniVision held 4,060 patents; its R&D investment in 2017 exceeded RMB 1 billion, accounting for more than 10% of its operating revenue; and it has established branches and R&D centers in multiple locations worldwide, giving it the strength to compete with companies like Sony.

CMOS sensors are OmniVision's main source of revenue, accounting for over 94% of its core business for three consecutive years, with a steady increase in gross profit margin, rising from 16.54% in 2016 to 24.83% in the first five months of 2018. ASIC chips, primarily used to support CMOS sensors, have a high gross profit margin and show a clear upward trend. In contrast, the gross profit margin of liquid crystal on silicon (LCOS) projection display chips has decreased significantly, mainly due to product structure adjustments and new products still in the integration phase; the gross profit margin of camera cube chips is negative, primarily due to high equipment depreciation costs. These two product categories account for a very small percentage of the company's business and will not have a significant impact on the company's profitability.

Before 2011, OmniVision was the leader in the CMOS sensor market, but subsequently faced fierce competition. Sony's market share was only around 7% in 2010, but due to OmniVision losing Apple's iPhone orders in 2011, and the subsequent shift of many high-end flagship phones to Sony, Sony's sensors experienced rapid growth after 2011, with its market share continuously increasing, even leading to supply shortages starting in 2014. Samsung successfully capitalized on this opportunity to enter the relatively tight 13-megapixel sensor market, gaining widespread adoption by numerous mobile phone brands and surpassing OmniVision to become the second-largest player. In the low-end market, OmniVision also faced competition from Chinese and Korean manufacturers. Fortunately, OmniVision maintained its market share thanks to its excellent technology and gradually widened the gap with the second-tier players in the market.

Recently, Will Semiconductor launched another acquisition attempt against OmniVision. Unlike Sony and Samsung, OmniVision does not have its own foundries or a business empire behind it. Therefore, OmniVision has often faced problems with insufficient production capacity and technology leaks from its foundries. If OmniVision joins forces with Will Semiconductor, it is expected to leverage its deep integration with the Chinese capital market to better focus on technological innovation, establishing partnerships, and raising funds. This would allow them to build a stable foundry packaging and testing system, connect with a large number of domestic customers, and seize the enormous development opportunities in the CMOS sensor field, ushering in a new era of development.