TOKYO — ON Semiconductor’s $400 million acquisition of Aptina Imaging Monday is a smart move on the part of a $2.8 billion behemoth looking for growth opportunities. The deal will make ON Semiconductor one of the leaders in the image sensor market -- almost instantaneously. The company, in particular, has high hopes to become a key supplier of automotive and industrial image sensors.
Sure, Omnivision, Samsung, and Sony rule the image sensor market when it comes to the handset segment. Yole Développement, a market research firm based in Lyon, France, calls these three companies the Big 3, and it predicts their continued dominance over the consumer handset/tablet market.
But when it comes to the machine vision segment, it’s a different story.
Expect the visible ascension of ON Semiconductor. The company -- armed with a broad product portfolio ranging from power and discrete to standard analog and logic products -- isn't exactly a household name in the image sensor world yet, but that will change soon.
ON Semiconductor has become a repository of the brain power that originally pioneered the CMOS image sensor technology. Those who are now a part of ON include a team from IMEC spinoff FillFactory in Belgium and engineers from Truesense Imaging Inc., backed by a 40-year-long heritage of Eastman Kodak’s imaging division. Newly being dded to the mix is Aptina, whose legacy is in a JPL team that invented CMOS active pixel sensor technology back in the 1990s.
ON Semiconductor’s shopping spree started with the acquisition of the CMOS image sensor product lines from Cypress Semiconductor in 2011. Cypress’s image sensor technology was rooted in FillFactory, which Cypress bought in 2004. In April this year, ON Semiconductor announced the acquisition of Truesense.
The turbulent history of these image sensor specialists -- with frequent changes in their ownership -- illustrates the competitive nature of the business and the massive scale necessary to succeed in the market.
ON Semiconductor has no intention to compete with the Big 3 in the consumer image sensor market. The company is gunning for automotive and industrial segments.
Although it has specialized in high-performance image sensors for machine vision for years, ON Semiconductor, thus far, has not played in the automotive segment of the image sensor market. Industry observers previously pointed out the company’s need for further modifications to its image sensor product lines to compete effectively in automotive.
That’s where Aptina comes in.
The company sees the value in Aptina’s “highly differentiated imaging technologies,” according to the statement made by Keith Jackson, president and CEO of ON Semiconductor. When combined with ON Semiconductor’s wide sales reach and established sales force -- which is no stranger to the automotive market through the company’s other product lines -- the company believes it has a formula for successful entry into the automotive image sensor market.
The CMOS image sensor market in automotive is expected to continue in the coming years, according to Yole. TSR, an independent market research firm, pegs the worldwide demand for image sensors for automotive and industrial applications at an annual compound growth rate of 16 percent between 2013 and 2016.
But that’s not to say that the growth in the automotive segment comes without challenges for image sensor suppliers.
In particular, automotive demands new technologies. Eric Mounier, a senior analyst at Yole, explaines that CMOS image sensors for the automotive sector must have specific characteristics. They include: high dynamic range, no motion artifacts, a low price (less than $10), robustness, and low-light sensing. Brian O'Rourke, senior principal analyst at IHS, also notes that the ability to stand up to difficult environments, in addition to near-IR capability and longer lifecycles, is particularly important for automotive.
Next page: Automotive: a concentrated market