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Sony to terminate development of high functionality camera modules for external sale

By Marcus Wong - on 27 May 2016, 1:45pm

Sony to terminate development of high functionality camera modules for external sale

 

 

Sony has just released their consolidated results forecast for the fiscal year ending March 31, 2017, and as expected, the imaging segment is expected to be down due to expected delays in the supply of components because of the impact from the Kumamoto Earthquakes which has also caused the temporary shutdown of their image sensor plant in Nagasaki (also in the Kyushu region).

Actually, looking at the forecast for 2016-2017 in the chart above, it appears that Sony is preparing for decreases in sales across all their products with the exception of their Pictures, Financial Services, and Game & Network Services. This probably explains why Sony has decided to terminate both the development and manufacturing of camera modules for external sale. What’s worth noting though, is that the wording is specifically that the cease is in “high-functionality camera modules”, meaning that production for most devices should continue. 

Also, it seems likely that only the modules in high-end (flagship) phones and tablets will be affected since this line comes under the “Devices” part of the report and not the “Imaging Products & Solutions” segment, so perhaps we’ll hear word of companies like Apple, Huawei, OPPO and Samsung turning to other manufacturers. Perhaps companies like Samsung will step up their own sensor development? Definitely a development to watch, given how much of the camera industry in general is reliant on Sony sensors. 

Here’s the section on “Devices” from the report that states the line quoted above.

Devices

Overall segment sales are expected to be essentially flat year-on-year primarily due to the impact of foreign exchange rates being substantially offset by an increase in sales of image sensors for mobile products. Operating loss is expected to increase primarily due to the negative impact of the 2016 Kumamoto Earthquakes, expenses associated with the termination of the development and manufacturing of certain camera modules and the negative impact of foreign exchange rates, partially offset by the absence in the fiscal year ending March 31, 2017 of a 59.6 billion yen impairment charge against long-lived assets in the camera module business and a 30.6 billion yen impairment charge against long-lived assets in the battery business recorded in the previous fiscal year. The above-mentioned negative impact of the 2016 Kumamoto Earthquakes is expected to be a total of approximately 60 billion yen, inclusive of opportunity losses resulting from sales that are expected to be lower than the level anticipated before the earthquakes, rehabilitation costs and a decrease in fixed costs allocated based on sales. This impact is expected to be partially offset by approximately 10 billion yen in insurance recoveries for the fiscal year ending March 31, 2017, that are expected to be reflected in the Devices segment. In addition, Sony decided to terminate the development and manufacturing of high-functionality camera modules for external sale, the mass production of which was being prepared at the Kumamoto Technology Center, as a result of a reconsideration of the strategy of this business from a long-term perspective. Approximately 30 billion yen in expense is expected to be incurred due to this termination.

Sources: Sony, Reuters, Mirrorless Rumors

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