Collective breakthrough! Domestic chip manufacturers may subvert the world in this field, with cluster breakthroughs!

What comes and cannot be missed is time; what is stepped on and cannot be missed is opportunity! - Su Shi

Due to well-known reasons, domestic chips have encountered many difficulties in breaking through advanced processes; however, with the sudden rise of the domestic smartphone industry and new energy vehicle industry, new development space has been opened up for the domestic chip industry chain. In this context, domestic image sensor chips (CIS) have suddenly emerged and are collectively breaking through to form a cluster-type industrial advantage.

1. CIS, more application scenarios

CIS is the abbreviation of complementary metal oxide semiconductor image sensor (CMOS Image Sensor). With the improvement of CIS technology and the emergence of various application scenarios, the demand for high-performance image sensors will continue to increase.

In addition to the increasingly widespread application of CIS in smartphones, with the arrival of the "intelligence" of new energy vehicles in the second half, the popularization of high-level automatic assisted driving or fully automatic driving has become an irreversible trend; therefore, CIS has also become a must-have for new energy vehicles!

At present, from the perspective of usage scenarios, CIS mainly includes: smartphones, automotive electronics, and smart security. According to the latest data from Yole, the global CIS market size will be nearly US$21.3 billion in 2022, with smartphones being the largest downstream sector, accounting for about 64%, followed by automotive electronics and smart security. At the same time, with the development of emerging technology fields, such as the further popularization of augmented reality (AR) and virtual reality (VR), the application scenarios of CIS will become more diversified in the future.

So how do domestic CIS manufacturers perform in various application fields?

2. Smartphone CIS: Domestic manufacturers collectively break through

Since smartphone CIS accounts for more than 60% of the market share, it has also become an important area of ​​business layout for major CIS manufacturers.

As smartphones become more high-end, the continuous upgrading of mobile phone imaging functions has become a key area of ​​differentiated competition for many manufacturers. As one of the core components of mobile phone cameras, CIS is the most critical technical product, accounting for about 52% of the cost of mobile phone cameras.

According to TechInsights data, Sony's CIS market share will be 58% in 2023, Samsung will be over 20%, and domestic manufacturer OmniVision will account for 7%. In addition to OmniVision, domestic CIS manufacturers GalaxyCore and SmartSens also have a place.

Although OmniVision and its manufacturers suffered a setback in 2023, the terminal market recovered rapidly in the fourth quarter of last year, driven by the Huawei Mate60 series, and domestic smartphones are making a leap in the high-end market. This has also directly driven the rapid growth of domestic CIS, and the domestic leader OmniVision has almost dominated the market of mainstream flagships such as Huawei and Xiaomi.

But the second domestic brand, SmartSens has also launched high-end XS series products and a number of new image sensors such as SC5000CS, which bring more outstanding imaging performance to smartphone imaging systems. At present, SmartSens' smartphone CIS products cover the mainstream needs of the mobile phone market, and product resolutions range from 800,000 pixels to 50 million pixels. In 2023, it achieved revenue of 890 million yuan, an increase of 50.40% over the same period last year. For example, Huawei's latest P70 standard version and pro version use SmartSens' SC580XS as the rear main camera. In the first quarter of 2024, SmartSens' high-end 50-megapixel product shipments increased further.

Another domestic CIS manufacturer, GalaxyCore, has started mass production of 32-megapixel products under multiple brands. According to GalaxyCore's financial report, the total revenue of products with 13 million pixels and above will reach 342 million yuan in 2023; in the first quarter of 24, products with 13 million pixels and above contributed a total revenue of more than 200 million yuan.

Therefore, judging from the above-mentioned leading domestic CIS companies, although Japanese and Korean manufacturers still occupy an advantageous position in the short term, domestic manufacturers are gradually eroding the CIS market of Sony and Samsung in terms of technical capabilities or market appeal. Coupled with the support of domestic substitution of smartphones, domestic CIS is collectively breaking through and gradually forming a cluster effect.

3. Automotive CIS, growing rapidly

Compared with the smartphone CIS market, the explosion of automotive CIS is mainly due to the rise of new energy vehicles in recent years; although smartphone CIS accounts for the largest proportion, automotive CIS has the fastest growth and currently accounts for about 20% of the market share.

In-vehicle CIS can be divided into three categories: CIS for advanced driver assistance systems (ADAS), CIS for cockpits, and CIS for images. CIS performance plays a decisive role in the signal of in-vehicle cameras. In order to meet the high safety requirements of in-vehicle cameras, CIS chips with high sensitivity, high dynamic range, and LED flicker suppression are required; at the same time, the pixels are also required to be higher and higher, and 8-megapixel CIS is gradually becoming the mainstream!

According to data from research firm Yole, L4 and L5 autonomous driving cars need to be equipped with at least 8 to 11 cameras, including 4 imaging cameras and 4 to 7 perception cameras. This means that 8-11 cameras will become the standard for high-end assisted driving systems.

The global automotive CIS market is dominated by ON Semiconductor and OmniVision, with market shares of 44.05% and 30% respectively in 2022, accounting for more than 70% of the global market. Samsung and Sony are both manufacturers focusing on consumer electronics CMOS image sensors. They started late in the development of automotive CIS products. In 2022, the two companies achieved 9% and 5% market share in the global automotive CIS market.

In addition, SmartSens, a domestic CIS manufacturer, is one of the few domestic manufacturers that can provide automotive-grade CIS solutions. It has released more than 10 products for the three major application scenarios of in-vehicle imaging, perception, and cabin. Its products have been mass-produced by major automakers such as BYD, SAIC, Dongfeng Nissan, Great Wall, Ssangyong, Leapmotor, Chery, GAC, Jiangling, and Geely. According to the latest report from YOLE, SmartSens will rank fourth in the world and second in China in the automotive CIS market in 2022, second only to OmniVision.

There is also GalaxyCore, which also has a layout in the field of automotive CIS and achieved sales of more than 200 million yuan in the aftermarket in 2023.

Although ON Semiconductor temporarily ranks first in automotive CIS, due to the strong position of domestic new energy vehicle industry, it is only a matter of time before domestic automotive CIS surpasses ON Semiconductor. It is expected that within three years, domestic automotive CIS will occupy more than 60% to 70% of the market share.

4. SmartSens, the world’s number one security CIS

Compared with smartphone CIS and vehicle-mounted CIS, the technical threshold of CIS in the security field is relatively low; but domestic CIS has an advantage in the security field.

Among them, the domestic CIS manufacturer SmartSens has maintained a leading position in the global market share of CIS products in the security field for many consecutive years since 2017; according to statistics from authoritative research institutions, in the security CIS market, SmartSens ranked first in the world with a market share of 33.3% in 2022. According to the financial report, SmartSens's smart security CIS revenue in 2023 is 1.67 billion yuan.

In addition, according to research data in 2022, SmartSens ranked first in the world in the drone CIS market with a market share of 81.4% in shipments.

In other words, in relatively niche application scenarios such as security and drones, domestic CIS will occupy an advantageous position for a long time because China's CIS industry chain is relatively complete and has the ability to respond quickly.

Therefore, as the smartphone market recovers and new energy vehicles continue to explode, domestic CIS is expected to continue to maintain rapid growth in 2024 and in the future; and under the leadership of domestic CIS leaders such as OmniVision and SmartSens, high-end markets and technologies continue to break through, the industry levels are clear, and overall competitive advantages and industrial clusters have gradually been formed.