Aptina announced the appointment of David Orton to CEO as of August 5, 2009. David Orton succeeds Nicholas Brathwaite who has been the CEO since April 2008 and who will assume the position of Chairman of the Board of Directors for Aptina. Aptina is now independent and privately held following the sale by Micron Technology, Inc. of a majority interest to Riverwood Capital and TPG Capital on July 10, 2009. Micron has retained a 35% minority interest in Aptina.
Orton, 53, most recently served as CEO at venture-backed start up, DSM Solutions. Prior to that, Orton was Executive VP of Visual and Media Businesses for AMD following the company’s acquisition of ATI. Prior to this acquisition, Orton served as the president and CEO of ATI from 2000 to 2006. Prior to joining ATI, Orton was President and CEO at the high-performance 3-D graphics company, ArtX, which was acquired by ATI in 2000.
Prior to joining ArtX, Orton served in a number of senior management roles at SGI. His experience also includes graphics and semiconductor work for GE and Bell Laboratories. Orton holds several patents in graphics and computer architecture.
This seems like a backward step for Orton compared to his glory days at ATI. I suppose being downgraded to EVP after the AMD/ATI merger has made him hanker for the big chair again.
ReplyDeleteThis guy's been around, but what does he know about image sensors?
ReplyDeleteI am pretty sure that his role will be to shape the company up into a stand alone public company.
ReplyDeleteIf he is a good CEO, he will utilize the strong background of the staff when it comes to the particulars of the image sensor business. I believe he has an MSEE from Duke so he is not just a bean counter.
I am optimistic for Photobit->Micron->Aptina. Aside from a weaker connection to China/Taiwan, there is no reason why Aptina should not surpass Omnivision's market cap when they do get around to going public. And Micron, as a long-term survivor DRAM fab, should have no fundamental problem matching or surpassing the cost structure of TSMC. A fact I am sure is not lost on OVT.
Fortunately (for me) the upcoming gorillas appear to be Samsung v. Sony for the next 5 years. Not sure about STM but they will have a place among European customers at least.
(my 2 cents worth)
Doesn't anybody think Toshiba has gorila potential? Sony is a CCD player, and I'm not sure how well they can make the transition. I'd spec the race as Samsung, Toshiba and TSMC (OV). Those players have real staying power.
ReplyDeleteI thought Sony had announced a fab-lite strategy that included their CMOS image sensors. Doesn't this de-rate them versus Samsung?
ReplyDeleteOV... well, its internal culture will damage to its business unless it changes the CEO.
ReplyDeleteTSMC is also helping Himax to develop the image sensor business, at least 2Mp is ready for MP
Toshiba and Sony might have very nice technology, but my main concern is about their cost structure. With their production base in Japan I doubt they can in the long term compete on price with Omnivision and Korea-based manufacturers. Actually, Sony offers quite competitive pricing right now, but at the same time, or because of this it talks about cut backs in sensor business and manufacture outsourcing.
ReplyDeleteSamsung made huge investments in CIS, but, as of yet, it has not translated into a huge market share. If Samsung continues to invest at this pace, it very well might become the first. My only question is about profitability of its CIS business, but may be this is not important, like it was not with Samsung cars.
As for Himax, it is mainly competing with Omnivision for Chinese market. So, for TSMC it does not matter who is selling there, Himax, Omnivision or Novatek, as long as it is not SETi or Dongbu.
OV... well, its internal culture will damage to its business unless it changes the CEO.
ReplyDeleteWhy do you believe that?
If cost structure is a concern, Aptina should consider teaming up with TSMC for its 12-inch production capacity, and probably for its BSI technology offering too. TSMC appears to have the good record serving multiple customers even when they are competitors in the same market seqment.
ReplyDeleteIt is very questionable whether TSMC is allowed to offer BSI to direct competitors of OV. OV "owns" the BSI technology developed together with TSMC. For non-competing applications OV might put the light on green, but I am afraid that for Aptina, the light will remain on red. That's what I learned for OV's comments at the IISW2009. A.T.
ReplyDelete"And Micron, as a long-term survivor DRAM fab, should have no fundamental problem matching or surpassing the cost structure of TSMC. A fact I am sure is not lost on OVT."
ReplyDeleteMost recent qtr had Aptina at 2$ gross margins and OVTI at 17% gross margins. This is with Aptina having a much better product mix than OVTI.
Is there something wrong with the Italian Micron fab?
You meant 2%, not 2$, right?
ReplyDeleteMy speculation is that Aptina is probably buying fab capacity, while Omnivision is paying per wafer price. So, when the market is down, Aptina's margin suffers much more. The real situation is not that clear cut, as Omnivision probably commits to some minimal volumes too, but you got the idea.
I doubt there is any viable business that has a 2% gross margin. So, if true, one needs to look beyong the numbers. Don't discount the possibility of clever accounting for Micron (put paper losses on Aptina for now) or clever accounting at OVT. 17% is nothing to crow about either. GM needs to get up to 30-35% or higher.
ReplyDelete"I doubt there is any viable business that has a 2% gross margin."
ReplyDeleteWell, I guess DRAM isn't viable then either. Poor Micron.
The problem is that image sensor suppliers have no pricing power.
ReplyDeleteThe rumor is that the buying of Aptina could be the first step in a consolidation of suppliers in order to get to a size that would give some pricing power. Although some of the new technology should lighten the load on profitability.
The problem with low end cmos image sensors (those destined for cell phone) is that even the largest players aren't making good money. The pricing sensitivity in the cellphone market is too high. If you count all the players with stakes in the market, OV, Aptina, Samsung, ST, Sony, maybe a few others. It used to be that the #1 mob would take the lions share of the profits, while the #2 #3 mob would be making a meager income, going beyond #4, you probably want to give up and get a latte instead. No one in the cellphone space is making good money.
ReplyDeleteI don't think it will be possible to make any significant money in the future for the cellphone players because the entry barrier to producing a workable image sensors isn't sky high (compared to say, the cell phone baseband/operating system) and the pricing pressure on the cell phone makers are such that they almost universally tend to go for components with the lowest possible cost.
Those involved in CMOS sensors who are making good money are those who are involved in specialized or niche fields. Canon and Nikon come to mind. They also have a platform that is relatively price insenstitive, DSC, DSLRs.
Cell phone sensors can only be a cashcow to sustain a company from starving. There is a need to go into new market segments with star potential in order to make big profits
@ "the entry barrier to producing a workable image sensors isn't sky high (compared to say, the cell phone baseband/operating system)"
ReplyDeleteBaseband/OS barrier is not high either. Many baseband vendors can not sustain their low or negative margins, same as in image sensors.
Everyone know why Micron can be a "long term survivor" of DRAM market, if there is no OTHER factor here, Micron has died at least 5 times.
ReplyDeletewere it not for the us gummint, micron would have been toast a long time ago
ReplyDeletereally? because surely the Korean govt and the Japanese government and the ROChinese government and PR Chinese government and the Euros don't help their industry at all. But go ahead, name a date and bailout amount for Micron.
ReplyDeleteit isn't so much a bailout as it is doing things like turning state's evidence to keep out of jail when they are caught being the ringleader of a price-fixing conspiracy, running to mommy ITC when their foreign competitors have lower manufacturing cost, siccing the FTC on their nemisis Rambus and other such sleazy things they do..... the government is who rescues them time and again
ReplyDeleteSo you are saying the government, that is, the citizens of the United States, try to protect their industry and jobs against unfair foreign competition where governments loan large sums at zero interest, control wages of laborers, and practice severe protectionism against US imports.
ReplyDeleteGod Bless America!
no I am saying that micron has sleazy business practices in my opinion and they only survive because of political assistance not on their own competitive merits.
ReplyDeletethis is the sort of thing I was mentioning
ReplyDeletehttp://www.law.com/jsp/article.jsp?id=1204804010871
it is typical of micron ethics in my opinion.
On a lot of discussion boards, people verbally attack each other and various companies, resulting in low quality discussions. I think this is a great blog with generally good comments. It would be great if the level of discourse could be kept out of the mud.
ReplyDeleteGenerally, I'm trying to avoid the personal assaults and delete the offending comments. As it stands now, the discussion went too far into politics, but not far enough for me to intervene.
ReplyDeleteIn any case, I would prefer to keep it closer to image sensor business, rather than DRAM.
I am curious, does anyone have an approximation of the cost from TSMC of CMOS image sensor wafers at 8" and 12"?
ReplyDelete