The two major growth points are suppressed, and the 3D sensing market is forced to enter a "trough period"

According to Jiwei.com, since the concepts of mobile payment, AR/VR, and autonomous driving have gradually been implemented in products, a solid foundation has been laid for the demand for 3D sensing.

However, even though this technology can be applied to many fields, only a few have truly achieved scale effects. In recent years, consumer electronics, automobiles, security, and logistics are the most representative fields, among which the largest consumer electronics and emerging automotive electronics have attracted particular attention from the industry chain, and both are seen as a breakthrough that can trigger market demand for 3D sensing.

However, from 2020 to the present, a series of changes have led to limited growth in the consumer electronics and automotive terminal markets, which has also caused a chain reaction in the component links, and the 3D sensing market has not been immune.

Growth slows over the next two years

As we all know, 3D cameras are a major way to realize 3D sensing technology. The above-mentioned application fields are basically completed through cameras. Therefore, the changes in market demand for 3D cameras can be regarded as one of the important indicators to measure the development of 3D sensing technology.

A 3D camera module manufacturer told Jiwei.com: "I don't think the development of the 3D market is optimistic at this point in time. The main reason is that the application has not taken off. Even though the concept has been hyped for a long time, there is no application that can be regarded as rigid demand. Although manufacturers with scale in the industry chain basically do it, no one thinks that such products can be sold in large quantities."

In the absence of rigid demand support, the sluggish growth of the terminal market and the negative impact of Sino-US trade frictions have also made the 3D sensing market "worse".

Market research firm Yole said in a report: "In the next few years, the demand for 3D cameras in the mobile phone market will decrease. There are two main reasons. On the one hand, the smartphone industry is in the stage of rapid upgrading from 4G to 5G. During this stage, the cost of the whole machine has increased, which has affected the plans of mobile phone manufacturers to adopt 3D cameras. On the other hand, Huawei, as the main brand promoting 3D cameras in the Android system, has suffered a sharp decline in its mobile phone business sales due to the impact of Sino-US trade frictions."

(Image and data source: Yole)

The data in the figure shows that when observing the 3D camera market in 2020, Yole still believes that the popularity of this product will show a steady growth trend; however, in 2021, as the industry environment changes, although the front 3D can still maintain a slight growth to 14.6%,

However, the curve representing the rear 3D camera showed a brief downward phase.

Yole's latest forecast shows that the total penetration rate of 3D cameras in the mobile phone market in 2021 will only reach 19.6%, an increase of 0.3 percentage points compared with 19.3% in 2020. In 2022, this figure may fall back to 19.3%.

Regarding this change, industry insiders believe that: "The reason why front-facing 3D cameras can maintain growth despite an unfavorable environment is mainly due to the fact that the application of face recognition has cultivated user habits to a certain extent, including mobile payment, mobile phone unlocking and other scenarios. The opposite is true for rear-facing 3D cameras. Although first-tier brands are promoting them, the problems of high cost and lack of applications have always existed. Therefore, when the terminal market is in a downturn, the use of rear-facing cameras may be reduced based on these two considerations."

Application implementation is not as expected

In fact, application has always been a common topic in the 3D sensing industry. We can also see that mobile phone brands have also stepped up their efforts in this regard in the past two years in order to seek greater innovation. However, judging from the results, it seems to be quite different from expectations.

Dividing it into two camps, Apple and Android, as we all know, Apple's original purpose of developing related technologies was to devote itself to the application of new fields such as AR/VR, so it is very determined to go down this road. Perhaps for the accumulation of experience, in recent years Apple has continuously used such products in the two product lines of iPhone and iPad. It is reported that the new generation of iPhones to be launched this year will be equipped with dToF in the entire series.

On the other hand, the Android camp itself is slightly inferior in terms of the profit of the whole machine. In addition, under the influence of various factors such as the epidemic, chip shortages, and increased 5G costs, terminal manufacturers have to make choices.

An industry insider told Jiwei.com: "It costs at least $10 to use a 3D camera on a mobile phone. If there are higher requirements for product performance, the cost will also increase significantly. I think for terminal manufacturers, they should consider whether the cost of adding a 3D camera at this stage is proportional to the value it brings."

Another industry chain manufacturer also pointed out: "In fact, at present, we don't see many customer demands. However, we are indeed developing dToF products in line with industry trends, as a practice. We can only say that when customers have demand, we will be ready."

In addition to smartphones, the industry chain’s biggest focus is undoubtedly the automotive market.

The above-mentioned industry insider said: "With the improvement of the level of autonomous driving, the demand for various sensors by automobile manufacturers has increased significantly. In addition, in the automotive market, there are more diverse solutions to achieve 3D, including cost-first solutions and high-precision solutions, mainly depending on the focus of the terminal manufacturers. Such an environment has given many small and medium-sized manufacturers opportunities, and we can see that many domestic and foreign companies are promoting low-cost 3D solutions. However, from our point of view, LiDAR has a better chance of becoming the mainstream solution in the automotive market, and the low-cost 3D solution can be judged after observing the introduction of domestic car manufacturers in the next two years."