CIS applications beyond consumer devices

While Will Semiconductor (WillSemi), with its subsidiary OmniVision, is now a major player in CMOS image sensoor market, China-based GalaxyCore played an essential role in driving the self-sufficiency of CIS in the local entry-level market segment.

Instead of undertaking acquisition projects, GalaxyCore relied on the advantages of in-house-developed technologies and aggressive pricing to support its success. Company founder Zhao Lixin has served as the core of its technology development.

GalaxyCore: Lord of the entry-level market

In 2003, Zhao returned from overseas and founded GalaxyCore to engage in the production of CMOS image sensors and display driver ICs. At that time, SMIC was eager to develop wafer foundry services for image sensors; therefore, it tied up with GalaxyCore and even provided the startup with a CIS production line. The tie-up enabled GalaxyCore to gain a foothold in the local market.

Since 2007, GalaxyCore has benefited from the development of China’s smartphone market, enabling it to shift its focus from PC cameras to smartphone cameras, targeting entry-level and midrange CMOS image sensors. It became the CIS supplier for Xiaomi, Oppo, Vivo and Transsion in 2020, significantly expanding its business. Thanks to the booming domestic handset market, GalaxyCore became the largest local CIS provider in 2014.

More importantly, it also ranked second in market share globally in 2014, in which it shipped over 940 million CIS chips and over 100 million LCD driver ICs.

According to GalaxyCore’s prospectus, it garnered a CAGR of 71.56% in 2018-2020, with CIS sensors contributing over 90% to its total revenues and its end-market clients including Samsung, Xiaomi, Oppo, Vivo, Transsion, Nokia, Lenovo, HP, TCL and Okii.

Of GalaxyCore’s revenue, 80% comes from entry-level to midrange CIS devices, mostly 2- to 4-megapixel CIS chips, used in sub-camera systems of smartphones. Sales of high-end chips account for less than 1% of total revenues.

Even so, GalaxyCore accounts for 30% of the global shipments of entry-level CIS. According to data compiled by Frost & Sullivan, GalaxyCore shipped 2.04 billion CIS chips in 2020, accounting for 29.7% of global unit shipments; in value terms, it was fourth with sales of US$5.86 billion.

But GalaxyCore also tried to introduce some changes. It launched an IPO at Shanghai’s Sci-Tech Innovation Board (STAR Market) in August 2021, raising a total of CNY3.59 billion (US$538.5 million). The proceeds were to be used to build a 12-inch wafer fab and to develop high-end CIS parts. It transformed itself from a fabless IC designer to a fab-lite one targeting the midrange to high-end CIS segment.

GalaxyCore has completed the construction of its12-inch fab in the Lingang New Area of Shangai. It also moved in ASML advanced ArF lithography machine into the fab in March 2022, with plans to kick off volume production by year-end 2022 with a capacity of 20,000 wafers a month.

During the period of rapid business expansion, shipments of CIS parts for handset applications contributed most to GalaxyCore’s revenue growth. That is to say that the development of the handset industry determines the growth pace of CIS chips. At present, the ongoing trend for the adoption of multiple cameras for handsets still enables the CIS market to remain stable. However, with the handset market growth slowing, there needs t be a change.

GalaxyCore CEO Zhao Lixin said, “In the next few years, the emerging applications in the automotive, security and surveillance, medical, toy and digital gaming and industrial sectors will be the main growth drivers for the CMOS image sensor industry.”

Smartsens: Invisible Champion

Indeed, this is the consensus of the local CIS industry. For China’s security and surveillance market, demand for related solutions from the sector amounted to CNY467.7 billion in 2019, up 8.22% from a year earlier. Related solutions for video surveillance account for the highest proportion of the domestic security market and still are growing at a rapid pace.

According to IDC data, China’s security and surveillance market reached US$16.2 billion in 2020 and will grow by a CAGR of 13.5% to US$20.1 billion in 2022.

As a result, a kick-off in the development of high-definition cameras is likely to bring robust growth to the CIS industry. Many domestic CIS makers have strengthened their deployments in the security and surveillance market, with Smartsens Technology as an outstanding player.

Smartsens was founded by Xu Chen in 2011 to create a Chinese brand to challenge international vendors in the global CIS market. It focuses on R&D and sales of high-performance CMOS image sensors. Smartsens’ CIS chips come with high sensitivity, high signal-to-noise ratio, and better low-light photography performance and are ideal for security and surveillance applications. In addition, it has also stepped up its deployments in the AI, smart-sensing and machine vision sector. It launched its first CIS chip SC1035 in 2014.

Since then, Smartsens has achieved significant results in the security and surveillance sector, with related chip shipments reaching 50 million units in 2016. The company ramped up its shipments to 100 million units in 2017, accounting for the highest share of the world’s surveillance CIS chip market.

According to data compiled by Frost & Sullivan, Smartsens shipped 146 million CIS chips for security and surveillance applications in 2020, accounting for 35% of the global shipments. Meanwhile, it has also received CIS orders from domestic tier-1 companies such as Hikvision, Dahua Technology, and Uniview, further ramping its local market share.

Regarding the future development of CIS in the security field, Xu said that with the expansion of application scenarios, demand for performance upgrades such as low light and wide dynamic range photographing for security cameras will increase, and therefore, local makers should be able to deliver products with high performance so that they can continue penetrating the high-end segment.

Smartsens launched an IPO on April 28, 2022, for its listing on the STAR security market. The proceeds of CNY2.82 billion will be used to purchase equipment for its R&D center, build system infrastructure and upgrade its CIS portfolios.

It will also enhance R&D efforts to develop CIS parts for automotive applications, with plans to build a next generation automotive-grade production line and related testing facilities to strengthen its technology capabilities.

Automotive CMOS image sensors

Smartsens is also foraying into business scopes beyond its current focus on security/surveillance CIS to include the smart automotive and machine vision segments. It acquired five patents related to automotive CIS and seven electronics circuit designs from peer company Anxin Microchip at the end of 2019. Meanwhile, it also expanded its smart automotive team by hiring seven additional R&D engineers from Anxin.

At year-end 2021, Smartsens set up a new automotive chip department and an emerging sensors department, aiming to enhance its deployments in the automotive, industrial and machine vision CIS markets.

At the annual event of CPSE 2022, company co-founder and COO Ma Weijian revealed that Smartsens will release a variety of automotive products in the year, and it is also developing 8-megapixel CIS solutions of ADAS (advanced driver assistance system) applications, with volume production slated for 2023.

Data compiled by Frost & Sullivan showed that global shipment volume and sales value of automotive CIS parts will reach 400 million units and US$2.02 billion in 2022, accounting for 5.2% and 11.3% of worldwide CIS sales.

The market research firm estimated that global automotive CIS shipments will reach 950 million units valued at US$5.33 billion in 2025, accounting for 8.2% and 16.1%, respectively, of global CIS sales, and representing a CAGR of 18.89% in volume shipments and 21.42% in sales value.

Increasing smart driving applications will become the growth engine for CIS parts, which is like the role played by high-end smartphones for multiple camera modules. At present, a high-end vehicle usually comes with more than 10 automotive cameras. Among new vehicle models to be launched in 2022, the Ideal X01 will come with 12 8-megapixel auto cameras, and the NIO ET7 will feature 7-megapixel cameras and four 3-megapixel high-sensitivity surround-view cameras. Xpeng G9 will have nine cameras, including 8-megapixel front-end cameras and 2.9-megapixel rear ones, and Hozon S will come with a total of 13 automotive cameras.

Along with the evolving autonomous driving technology, the number of in-car cameras required for each vehicle may reach over 12, and even higher for L3 models. Considering that CIS parts account for about half of the cost of in-vehicle cameras, supply chain sources said many auto OEMs have begun to prefer purchasing CMOS products from local suppliers as their manufacturing technologies have matured.

Some industry sources claimed that while local vehicle-grade CMOS development is relatively late compared to international vendors, related technologies developed locally are not weak. Besides, local makers enjoy the advantages of localized production control and service systems optimized by the local language.

With China being the world’s largest market for new smart energy vehicles, domestic CIS suppliers will fully benefit from the booming industry.

In addition to Smartsens, other mainstream domestic CMOS suppliers including GalaxyCore and WillSemi/Omnivision have also entered the automotive CIS supply chains, competing neck-and-neck for the leading market position. It has been reported that GalaxyCore’s CIS products have found their way into the supply chain for driving recorders, 360-degree surround-view cameras and cockpit monitors.

Omnivision began mass-producing its first automotive CIS chips in 2005. It now offers a comprehensive line of products ranging from 300,000-pixel to 8.3-megapixel CIS chips to meet the needs of different applications, such as traditional reversing radars, driving recorders, electronics rearview mirrors, 360-degree panoramic video systems, ADAS devices and driver monitoring systems (DMS).

OmniVision stated recently on its investor interaction platform that it has begun volume production of its 8-megapixel automotive CIS chips and has already kicked off related shipments. The company has received more design-ins for its 8-megapixel chips, which will result in steadily increased shipments and sales.

Omnivision believes that the rapid development of the smart vehicle industry and upgrades in autonomous technology will ramp up the number of in-car CIS chips for each vehicle to over 10 from 1-2 currently, which will enable CIS suppliers to embrace significant improvements in ASPs and shipment volumes. For Omnivision, the automobile sector will become its second-largest application market after handsets.