Samsung Electronics Forms Alliance with Taiwan for Image Sensors: Aiming to Overtake Sony

Samsung Electronics is collaborating with Taiwan-based foundry UMC to challenge Sony, the current global leader in the image sensor market. This partnership is part of Samsung’s dual manufacturing strategy aimed at enhancing production efficiency and gaining a competitive edge in pricing.

On May 1, industry sources revealed that Samsung Electronics is continuing its cooperation with UMC as part of its “Fab-lite” strategy for image sensors. This marks the first official confirmation from Samsung Electronics regarding outsourcing production of its image sensors.

The “Fab-lite” model implies a concentrated operation of Samsung’s image sensor factories. Under this model, Samsung Electronics will handle the main processes while outsourcing the remaining steps to external foundries. High-performance image sensors used in smartphones will be manufactured by Samsung, whereas lower-cost sensors for products like robotic vacuum cleaners and various home appliances will be outsourced. The method also includes outsourcing the conversion of light to digital signals and image correction to foundry services. This strategy allows Samsung to focus on key sensor processes while minimizing equipment operational costs.

The foundry handling the outsourced image sensor production for Samsung Electronics is UMC, a Taiwanese company. UMC ranks fourth globally with a 6% share in the foundry market and specializes in legacy foundry processes such as 22 nm and 28 nm.

With this strategy of dual manufacturing, Samsung Electronics is poised to closely chase Sony, which currently holds over 50% of the market share in the image sensor segment. Key factors that could enable Samsung to catch up with Sony include technological advancements and competitive pricing. In 2021, Samsung Electronics was the first in the world to develop a 200 million pixel image sensor, and it aims to release sensors with over 500 million pixels next year.