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Sony put all the chips on zero, err, on sensors
  • Sony plans to hire 320 new engineers annually in Japan this year and the next, up from 250 in 2018. The figures do not include those to be hired by overseas units.

    The allocation is in line with the company’s plans to invest 600b yen ($5.4b) in image sensor business over the three years through March 2021, or half of the group’s planned capital expenditures.

    yet

    The company already cut its annual profit outlook for imaging sensors to 130b yen, accounting for just 15% of the Sony Corp.’s overall profit, as they told - due to weakening global demand for smartphones.

    It is very risky gamble. As sensors are still very profitable devices due to lack of any real competition. Especially premium smartphone sensors and large full frame sensors where margins can reach 2000%. Such situation became possible due to private cartel agreements where other Japanese companies get sensors under special terms and are allowed to take part in production and customization, forming distributed monopoly.

    Healthy competition from outside Japan can put an end to this nice picture, one of the dangers is Samsung that also had been restricted by private agreement thanks to low quality management who agreed to have near time advantages and bonuses other longer term victory, but this can change due to fast fall of Samsung profits in their top smartphone niche. As and if agreement will be broke we will see full scale sensor war that can also bring second breath to consumer camera market as sensors price will drop 3-4 times and much smaller manufacturers will gain access to competitive pricing.