"Due to Apple’s AR focus (Apple launched its ARkit in June-2017), we expect ToF to be installed in Apple's 2019 iPhone models. However, due to VSCEL-based ToF not being ready due to issues in power consumption, sensor form factor, etc., our supply chain checks suggest a microwave RF solution is more likely. The solution uses an RF wavelength to detect depth and combines 2D/3D images captured by a dual-cam to deliver AR functions. Compared to VSCEL-based ToF, the RF solution has a lower cost but a lower resolution and shorter distance. We expect the microwave RF chip to be provided by either Apple or Broadcom."
There are few major trends with respect to the smartphone cameras:
"We forecast global tri-cam penetration in smartphones of 15% in 2019 (>200m units) and 25% in 2020... Concerns about low-spec “three individual” design make little sense to us, as tri-cam models mostly use optical zooms which require alignment. We also do not think algorithms will be able to replace tri-cams, as optical zooms cannot be achieved only using software.
Besides, we expect the trend of large sensors to continue, driven by Sony’s quadra sensor and Apple’s move to 1/2.6”/2.25” sensors in 2H18/2H19, from 1/2.8” in 2H17, lifting lens and module spec requirements. As such, we expect highend sensors and lenses to be in tight supply in 2019. For Largan, we expect its “new weapon”, pure black lenses, to help it gain traction in front cameras given its better full screen design.
For lens makers, we believe rising shipments driven by the robust tri-cam adoption should help alleviate competition and strengthen leading players’ pricing power. Spec-wise, due to tri-cam’s requirement for lens uniformity, we expect a duopoly in lenses – Largan to take the lion’s share while Sunny will benefit from order overflow. We believe it will be difficult for other second-tier lens makers to catch up.
For module makers, we believe the tri-cam trend should help to lift CCM ASPs, as a tri-cam module can carry a US$40+ ASP, compared to dual-cam modules at US$20+ for the current high-end Chinese OEM models. Regarding market concerns of the potential lower spec of the “three individual” design, we believe the design does not make sense for mid/high end models, which accounts for the majority of current tri-cam demand, as adding one additional camera mostly addresses the zoom function. We note that zoom functions require active alignment to calibrate optical performance; thus, we believe “two + one” makes more sense.
While the optical industry may not see a meaningful 7P upgrade in 2018-19, the previous yield issue on the P20 Pro suggests a high-end 6P design is still difficult for both lenses and modules due to the large CMOS sensor size. Theoretically, the large CMOS sensor size will challenge the z-height of modules and lenses. Based on our survey of CMOS roadmaps, we expect the trend of large sizes to continue, driven by Sony’s introduction of a quadra sensor and Apple’s move to larger sensors, both requiring high lens specs (i.e., thinner, higher frequency, etc.) and thinner module structures. P20 Pro’s 40MP lens is the first for quadra this year, and we expect OPPO, Xiaomi and Vivo to follow suit."
"Driven by the trend towards multi-cams and large CMOS sensors, our supply chain survey suggests leading CMOS sensor and lens makers will continue to expand capacity. However, we note that Sony, which hasn’t come out with official expansion guidance, looks slow in its expansion, and our supply chain survey suggests it may only have a 10-15% expansion plan for 2019. As such, we expect supply of high-end CMOS sensors and lenses (which mostly pair with Sony’s sensors) to be tight in 2019. We therefore expect a favorable pricing environment in 2019 for leading CMOS sensor and lens players."
