Terushi Shimizu
Executive Vice PresidentSony Corporation
Representative Director and PresidentSony Semiconductor Solutions Corporation
Representative Director and PresidentSony Semiconductor Manufacturing Corporation
Semiconductors Segment
Sony Corporation
Semiconductors Segment
1. Business Environment
2. Long-Term Business Strategy
Sony Corporation
Semiconductors Segment
1. Business Environment
Sony Corporation
Worldwide Image Sensor Shipments (Revenue Basis)
※Source: Sony
Mobile Area• Market expansion from multiple lens and large sized sensors
• Steady adoption of sensing products although the pace of market growth is slower than expected
AV Area• No change in expansion of high-end sensor market
New Area• Automotive: No change in the speed of growth of the ADAS market
• Factory Automation:Growth market in the mid to long term
• Security:Stagnant market from late FY18 to early FY19. Expect recovery in FY19
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
New AreaMobile SensingMobile Multiple Lens (Sub Camera)
AVMobile Front + Rear
Semiconductors Segment
CY 19E 20E 21E 22E 23E 24E 25E
Sony Corporation
Mobile Market Growth: Smartphone Units x Multiple Lens x Larger Size
Increase inSensor Units
and Number of Wafers
Semiconductors Segment
Smartphone Multiple Lens Adoption Rate
Smartphone Sensor Optical Size
Approximately20%*
Average AnnualIncrease in Sensor
Size
Approximately15%*
Average AnnualIncrease in MultipleLens Adoption
※Source: Sony’s Forecast
AlarmSound
Toyota Corolla Sports vehicle with Sony’s sensorwas awarded the top score in the automatic braking tests for
night-time pedestrians (1st half of FY18)
Brake!
Sony Corporation
Automotive Initiatives Semiconductors Segment
Initiatives for the futureSensor fusion
• Achieve quality and functionality for automotive - high sensitivity, high resolution,and capable of reducing LED flicker while maintaining high dynamic range
Camera
Milliwaveradar
Sensor Fusion
• Able to integrate large amounts of raw data from camera images, LiDAR and milliwave radar
• Identify objects even in harsh conditions
LiDAR
Recent initiativesAutomotive image sensor space
IMX224(1.27M pixels)
IMX324(7.42M pixels)
Current Model
IMX490
Sony Corporation
Automotive Initiatives: Sensor Fusion Semiconductors Segment
Scene 1: Fog Scene 2: Backlight Scene 3: Night & Rain
• Identify car ahead despite fog making it difficult to see
• Identify car ahead despite glare making it difficult to see
• Identify car ahead despiteheadlights and rain making itdifficult to see
Current Technology
Sony’s Sensor Fusion
Sony Corporation
Image Sensor Revenue Share Target
51%*FY25Target
60%
FY18
※Source: Sony
Semiconductors Segment
Sony
Sony
Sony Corporation
Revenue Portfolio Target
SensingSeveral%
FY25Target
Sensing30%
FY18
Semiconductors Segment
Sony Corporation
Image Sensor CAPEX
FY12-14 FY15-17 FY18-20E FY21E-23E
Semiconductors Segment
Approx.700 billion yen
Sony Corporation
ROIC Target / Roadmap to Improvement Semiconductors Segment
×
=
ROIC Actual15%
Target20%-25%
MarginHigher functionality,higher value added
productsOperational improvement
Decrease in depreciation and R&D
FY18 FY25FY21
InvestedCapital
Turnover Rate
CAPEX increase due to higher demand
Improvement in turnover rate due to decrease in CAPEX investment
Sony Corporation
2. Long-Term Business Strategy
Semiconductors Segment
Sony Corporation
Long-Term Business Strategy
FY19-21 Beyond FY21
Market for mobile-use image sensors grows Mobile 3D sensing penetration expands
Sensor market growth stabilizesUse case diversifies
Combine edge AI processingwith sensor hardware
Pursue a recurring revenue business model
Aggressively invest to maintain No.1 position in imaging and
take No.1 position in sensing
Market Environment
Pursue partner strategy inthe software space
Generate cash flowExpand the business through new use cases in sensing
HWStrategy
SWStrategy
*HW: hardware, SW: software
Semiconductors Segment
Sony Corporation
Sony Sensors Used in Various Applications Around the WorldSemiconductors Segment
Sony Corporation
Cloud and Edge AI Processing
Benefit:• Big data processing ispossible
• Less influence from edge device performance
Benefit:• Ensure privacy• Reduces data transfer time• Reduces cloud usage costs• Reduces bandwidth
Edge AI Processing
Processing
Cloud AI ProcessingProcessing
Semiconductors Segment
Sony Corporation
Image Sensors × AI Possibilities
Imaging AI Sensing AI
Better Picture QualityPossibilities limited to
the number of human eyes
Recognition andMachine VisionUnlimited Possibilities
Eliminates moireCorrection beyondphysical limitations
Utilizes complementary colorsHigh sensitivity and color
reproduction
Moire
Semiconductors Segment
Sony Corporation
Role of Image Sensors in the AI Era
What Image Sensors AimTo Do Going Forward
Create clean image data based on how AI sees the world
What Image Sensors AimedTo Do Up Until TodayCreate clean images based on how human eyes see the world
Semiconductors Segment
Sony Corporation
Integration of Edge AI Processing and Sensor Hardware
Approximately 51%* global market share Superb expertise in data output space
Integrate edge AI processing and sensor hardware Pursue a recurring revenue business model
Semiconductors Segment
Sony Image Sensors AI Applications
※Revenue basis, Source: Sony
Sony Corporation
Increase Image Sensor Possibilities with Stacked Structure
AI Recognition
PixelsPixels
LogicEmbed
Semiconductors Segment
Sony Corporation
Growth in Image Sensor BusinessSensingEdge AI
Semiconductors Segment
Sony Corporation
Achievements
Increase in sales and OI in image sensors for mobile-use due to the shift to multiple lenses and larger sized sensors
Adoption of Sony’s ToF sensors for mobile applications
Increased presence in the automotive market
Adaptability to market volatility for factory automation and security cameras
Operating Income Analysis(bln yen)
Issues
OperatingIncome
879.3Sales 850.0Image Sensors
711.4Image Sensors
649.3
1USD=110.9 yen 110.9 yen
One-Time Factors*
Depreciation / R&D
Inventory Change
Exchange Rate
Unit increase/Product Mix Improvement/Cost
Reduction
Semiconductors SegmentFY2018 Review
164.0
143.9
* Please refer to slide 24 of Presentation Material for FY2018 Earnings.
Sony Corporation
Environment
Acceleration in multiple lens and larger sized sensor adoption
Sensor market for factory automation and security are expected to recover from the second half of FY19, after a slowdown in the second half of FY18
990879.3
Operating Income Analysis(bln yen)
Basic Strategy
Invest to meet the growing demand for sensors
Accelerate initiatives to generate monetization opportunities that go beyond selling sensor hardware
Image sensors840
Image sensors711.4
(April Forecast)
Semiconductors SegmentFY2019 Forecast
Sales
143.9 145
Depreciation / R&D
Inventory Change
Exchange Rate
Unit increase/Product Mix Improvement/Cost
Reduction
1USD=110.9 yen 110 yen
OperatingIncome
Sony Corporation