Onsemi, a prominent US IDM, has unveiled its strategic shift, planning to initiate in-house production of CMOS image sensors (CIS) in 2024, marking a significant departure from its longstanding practice of outsourcing manufacturing to partners.
Reports from Nikkei Xtech and Dempa Shimbun revealed that Onsemi's president and CEO, Hassane El-Khoury, confirmed during a recent presentation in Tokyo the company's intention to embark on mass-producing image sensors internally starting in 2024.
Initially employing a "fab lite" strategy, Onsemi outsourced the production of all its CIS solutions. However, prompted by supply chain instability during the pandemic, the company opted to revise its approach, bringing production in-house to ensure a more secure and stable supply chain.
The in-house production of Onsemi's CIS logic circuits includes 40nm and 65nm generations. The front-end processes will be bifurcated, with one part conducted at its 12-inch (300mm) wafer fab in East Fishkill, New York—acquired from GlobalFoundries (GF) in 2019—and the other part at the Nampa factory in southwestern Idaho, focusing on microlenses and color filters. Backend packaging and testing will occur at the Malaysian factory.
However, Onsemi emphasized that not all of its CIS products will be shifted to in-house manufacturing, and it will still flexibly outsource production based on market demand.
Currently, CIS and power semiconductors are the two main revenue pillars for Onsemi. In the automotive CIS sector, Onsemi is the market leader with a 46% share, and it holds an even higher share at 68% in the advanced driver assistance system (ADAS) CIS market. As for power semiconductors, Onsemi secures a 9% market share, ranking as the second-largest player in the sector..
In the realm of silicon carbide (SiC) power semiconductors, Onsemi focuses on vertical integration, employing an integrated operational model covering the entire production process of SiC, from ingot growth to devices fabrication, aimed at enhancing its competitive edge.
Onsemi's vice president, Simon Keeton, noted that Tesla has disclosed plans to reduce SiC power semiconductor usage in future models, but Onsemi's diverse product range spanning from entry-level to high-end car models allows flexibility, enabling solutions incorporating IGBT if the use of SiC components diminishes in entry-level car models.
While the global semiconductor industry is projected to grow at a CAGR of 4% from 2022 to 2027, specific sectors like the smart power and sensor market are anticipated to witness a CAGR of 6%, and the sustainable ecosystem market is estimated to expand at a remarkable CAGR of 16%. However, Onsemi expects to surpass the global growth rates in all these areas, showcasing a promising trajectory for the company's future endeavors.
