(JW Insights) Jul 31 -- China’s CIS supplier Will Semi(韦尔半导体)’s and Smatsens(思特威) are expected to enjoy significantly more market shares of high-end CIS market after the Japanese vendor Sony reduced its Android CIS supply in the market, well-known Apple supply chain analyst Ming-Chi Kuo tweeted on July 26.

The two companies are the biggest beneficiaries of the CIS industry bottoming out in 3Q23 and China’s domestic replacement policy.

The wide camera CIS of the two iPhone 15 standard models will be upgraded to 48MP and adopt a new stacked CIS design. Due to the low yield rate, Sony has increased the CIS production capacity for Apple by 100–120% to meet Apple’s demand, resulting in a significant reduction in high-end CIS supply for Android.

As Sony has reduced the supply of high-end Android CIS, brand vendors need to actively seek alternative solutions, benefiting Will Semi’s high-end CIS (64MP+) order growth (since 2H23). Will Semi’s high-end CIS market share is expected to increase significantly from 3–5% in 2023 to 10–15% and 20–25% in 2024 and 2025, respectively, which is conducive to its long-term revenue and profit growth.

The current inventory level of Will Semi has improved to a normal level (about 12 weeks). Kuo also predicted that the high-end CIS cooperation between Smartsens and Chinese brands will become closer.

Given that more and more of Sony’s capacity and R&D resources will continue to be consumed by Apple, Chinese brands such as Huawei will actively partner with more CIS suppliers, and in addition to Will Semi, Smartsens is a potential key supplier worthy of attention.

Meanwhile, the global CIS wafer reconstruction (RW) key supplier Tong Hsing’s earnings call pointed out that the bottom of the CIS industry is 3Q23.

China’s semiconductor industry continues to benefit from implementing the domestic replacement strategy, which is the main reason why Tong Hsing is conservative in its future mobile phone CIS RW business (orders continue to be lost to Chinese mainland competitors).

AI visualization applications will be the other key to driving CIS growth in the long term. The most visible application at this stage is self-driving cars, and the next most likely is robotics, according to Ming-Chi Kuo.

(Gao J)