Tuesday, December 10, 2019

Sony News: TSMC, Third Point, Automotive Sensors

Digitimes reports that TSMC received CIS orders from Sony "and will fabricate the chips using 40nm process technology at Fab 14A in Tainan, southern Taiwan." TSMC has placed equipment orders for additional 40nm process capacity at the fab to fulfill CIS Sony's orders. The new equipment is to be installed in Q2 2020 with pilot runs slated for August next year.

Taiwan TechNews adds: "in the case of Sony's current insufficient production capacity, Sony released the first order to TSMC for OEM production, which not only added orders for 5G related products to TSMC, but also boosted revenue momentum for its high-end image sensor supply chain.

...although Sony and TSMC had a cooperative relationship in the past, it was limited to the manufacturing of logic products and did not place an order for TSMC on high-end image sensors. This time, due to insufficient production capacity, the first release of orders also made TSMC actively prepare. This batch of orders is also expected to be built in the TSMC 14a factory with a 40-nanometer process. It is expected that after the expansion of TSMC's production line, mass production will occur in 2021, reaching a scale of 20,000 pieces per month. In the future, it will not even rule out that it will reach 28. Cooperate with processes below nanometer. In this regard, TSMC did not comment and explain.

SeekingAlpha publishes Third Point response on Sony refusal to spin-off its CIS business:

"Most investors expected that following a lengthy review, Sony would share some meaningful plans to close the yawning gap between its share price and intrinsic value.... While we did not expect that all our requests, such as the separation of the image sensor business, would be addressed immediately, we did expect that the Company would make some recommendations to address the structural impediments to long‐term value creation for Sony's shareholders.

Instead, Sony revealed that the review's conclusion was to maintain the status quo with no concrete proposals to improve the business. As students and practitioners of Japanese business principles like kaizen, it is difficult for us to imagine that a company of Sony's size and complexity could not find a single concrete action to improve its business and valuation.

We are committed to a continued constructive dialogue with the Company and to creating long‐term value at Sony for all stakeholders. Discussions are ongoing, guided by our view that Sony remains one of the most undervalued large capitalization stocks in the world.

Sony publishes an interview "Will Sony's automotive CMOS image sensor be a key to autonomous driving?" with its automotive image sensor designers Yuichi Motohashi, Satoko Iida, and Naoya Sato. Few interesting quotes:

"...automotive cameras are difficult to compare and evaluate. Although the performance is good, there is no method established to evaluate them and we can't emphasize our advantages. So, we always consider how we can create a yardstick to prove our superiority.

The image sensor development cycle is two to three years, but it takes longer than other applications for those image sensors to be actually integrated into cars in the market. In fact, the negotiations we're having right now are for cars that will hit the market in five years.

While we emphasize the "low illumination characteristics," the core competence Sony has cultivated over many years, we have developed Sony's original pixel architecture based on the "dynamic range expansion technology with single exposure," which is strongly demanded for automotive image sensors. I think this technology is unbeatable.

...process technologies have become commoditized today, and it has become difficult to differentiate them. It is necessary to make differentiation through pixel architecture and show superior characteristics.

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