Sony Sensor Production Wobbles, Plant Closed Down
Sony is facing serious problems after their camera sensor production line, which is a core revenue earner was closed down following the recent earthquake in Southern Japan.
The Japanese Company makes over 40% of the image sensor used in smartphones including 100% of the image sensors used in the Apple iPhone.
Sony in a statement at the weekend said that the plant will remain closed while it assesses the damage from two deadly earthquakes which hit southern Japan.
Sony said it will extend the closure of its image sensor plant in Kumamoto, which is in the southern island of Kyushu, after major tremblors on Thursday and Saturday rocked the key manufacturing region.
The PlayStation maker said operations at its image sensor plant in Nagasaki, also in Kyushu, will be partially suspended and it does not yet have a timeline for full resumption of operations.
Sony controls about 40 percent of the market for complementary metal-oxide semiconductor (CMOS) image sensors, a type of integrated circuit that converts light into electrical signals. In smartphones they are used to convert images into digital data.
“We are not expecting any immediate supply disruption as we have some inventories right now,” a Sony spokesman told Reuters on Saturday. “We will make an announcement promptly if any supply issues emerge.”
He said the company was hoping to resume operations as soon as aftershocks end, and would probably provide an update on late Monday afternoon. “We are still checking for potential damage to the plants, which usually operate on a 24-hour basis,” he said.
Sony said that the strength of the earthquake, as well as persistent aftershocks, are raising the risk that it will take time to restore operations, Kenichi Saita, an analyst at Mizuho Securities, wrote in a report.
The Sony smartphone business has been struggling for to such an extent that Company executives have been putting out feelers for a trade sale.
Also impacting the Company is the fact that the Japanese electronics manufacturer’s camera business has not been able to catch up with rivals Canon and Nikon either.
However, Sony is still making significant profit from smartphone and digital camera markets by providing its rivals with image sensors.
According to market research estimates, in 2014 Sony made 40.2 percent of all image sensors, leaving its rivals in the sector far behind.
Presumably, this figure includes sensors made for things like automotive and industrial uses, but there’s no doubt that it also accounts for the front and back sensors in Apple’s iPhone 6 models, both made by Sony.
Those sensors earn approximately $20 for the company for each iPhone sold.