Imaging & Sensing Solutions (I&SS)
There has been no major impact on Sony’s manufacturing plants in Japan, which are operating as usual. Sony also understands that factory operations and supply chains at most of its major mobile customers, to whom it sells its image sensors, have been recovering. On the other hand, image sensor sales are decreasing primarily due to a slowdown in the smartphone market, which is the final outlet for Sony’s products, and a change in the overall composition of sales in that market resulting from a shift from high-end to mid-range and moderately priced models.
• Next is the I&SS segment. FY20 Q1 sales decreased 11% year-on-year to 206.2 billion yen and operating income decreased 24.1 billion yen to 25.4 billion yen.
• FY20 sales are expected to decrease 7% to 1 trillion yen and operating income is expected to decrease 105.6 billion yen to 130 billion yen.
• Now I will explain the state of our sensor business.
• FY20 sales of image sensors for mobile products are expected to decrease compared to FY19 primarily due to a decrease in end-user product sales by one of our major customers, a deceleration of the smartphone market and a shift to midrange and moderately priced models in that market resulting from the impact of the spread of COVID-19, and a significant reduction in component and finished goods inventory by a Chinese customer.
• Profitability is expected to be impacted by a decrease in gross margins and an increase in depreciation and manufacturing-related costs associated with production equipment we purchased in the previous fiscal year when we expected growth, as well as higher research and development costs.
• We do not expect to grow sales of mobile sensing products compared to FY19 because adoption by smartphone makers has been slow and sales of flagship models which already use our products have decreased due to the shift in market conditions.
• Sales of image sensors to AV have also decreased due to the contraction of the sensor market for digital cameras resulting from the impact of the spread of COVID19. We expect the market to contract in one year as much as we had previously expected it would contract over the next approximately three years.
via Sony