Despite the low profitability of SK Hynix's CMOS image sensor (CIS) business, the company has decided to retain this segment and reorganize its CIS development team under the Future Technology Research Institute, possibly hoping to replicate the successful narrative seen in high bandwidth memory (HBM).
According to industry sources cited by ZDNet Korea, SK Hynix CTO Seon-Yong Cha is expected to also lead CIS development.
Some analysts believe that SK Hynix endured a period of poor profitability in its HBM business but ultimately achieved success in the artificial intelligence (AI) chip market. In the future, demand for SK Hynix's CIS products may extend beyond the smartphone sector to include automotive, machine vision, and industrial markets.
Compared to other sectors within SK Hynix, the CIS business has lower profitability. Coupled with a shrinking smartphone market in recent years, there has been a decline in CIS demand, making it challenging for SK Hynix to secure a leading position in the CIS market.
According to market research firm Yole Développement, the top three players in the CIS market in 2023 are Sony with 45% market share, Samsung Electronics (Samsung) with 19%, and OmniVision with 11%. Meanwhile, SK Hynix ranks sixth with only 4% market share.
SK Hynix plans to transfer most of its CIS developers to other business units in 2024, resulting in a reduction of CIS production capacity by more than half compared to 2023. There was speculation within the South Korean industry that SK Hynix might "abandon the CIS business," but the company ultimately decided to continue its operations in this area.
SK Hynix president Noh-Jung Kwak reportedly has a strong desire to develop the CIS business. During a regular shareholders' meeting in March 2024, Kwak stated that he does not intend to abandon the CIS business, acknowledging both strengths and weaknesses compared to competitors while stressing that SK Hynix is analyzing these factors.
SK Hynix acquired the CIS development company SiliconFile in 2008, marking its entry into the CIS market. The absorption of SiliconFile in 2014 marked the beginning of its expansion in the CIS field. By 2019, SK Hynix established a CIS R&D center in Japan and launched the CIS brand Black Pearl.
SK Hynix previously supplied CIS components to mid-range Chinese smartphones and successfully provided sensors for Samsung's foldable Galaxy Z Fold3/Flip3 series and Galaxy A series in 2021.
