Sony is accelerating its push into the automotive sector as part of its diversification

Sony is accelerating its push into the automotive sector as part of its diversification
Sony is accelerating its push into the automotive sector as part of its diversification

Sony plans to supply imaging sensors to 15 of the world’s top 20 automakers by 2025, underscoring the company’s ambitions for electric vehicles and autonomous driving as it tries to diversify beyond mobile phones.

The Japanese conglomerate announced plans to accelerate its push into the automotive industry in 2020 when it unveiled a prototype electric vehicle called Vision-S. This year it launched an EV division and announced a joint venture with Honda to make cars.

Sony has now said it aims to provide the sensors essential to electric vehicles and autonomous vehicles as it diversifies beyond making smartphone camera parts for Apple, Google and Samsung.

“We expect to do automotive imaging sensor business with 75% of the world’s top 20 automakers by fiscal year 2025,” said Terushi Shimizu, Head of Imaging and Sensing Business. from Sony at a two-day investor event that ended on Friday.

The 20 automakers would make about 80% of cars sold globally within three years, he added. Sony plans to spend about 900 billion yen ($7 billion) to develop imaging sensors during 2021-23, almost three times more than between 2015 and 2017.

One of the biggest challenges is securing chips, as the pandemic has strained supply chains and sharply reduced corporate inventories.

Shimizu said Sony has invested in a joint venture with Taiwan Semiconductor Manufacturing Company to build a $7 billion chip factory in Japan and wants to deepen its collaboration to ensure a stable supply of logic semiconductors, which are used for control the operation of electronic devices.

Akira Minamikawa, a Tokyo-based semiconductor analyst for research firm Omdia, said Sony was making progress after a stuttering start. “Sony struggled on the car front early on, but they’ve caught up. There have been production capacity issues, but thanks to the tie-up with TSMC, they are being resolved,” he added.

Sony also told investors it would ramp up production of its PlayStation 5 console and further diversify into mobile and PC games.

The PlayStation 5 console launched in late 2020 and sold fewer units in its second year due to parts shortages caused by the pandemic. Analysts expect it to close that gap in year three and top PS4 sales in 2024.

“We anticipate a significant ramp-up in production of the PS5 this year, which will allow us to close the gap to the PS4,” said Jim Ryan, head of games at Sony, during a press briefing. He added that Sony is planning “further large increases in console production, taking us to production levels we’ve never seen before.”

But Ryan said supply issues were his “first priority”, pointing to the risks stemming from Covid-19 lockdowns in China and Russia’s invasion of Ukraine.

The company is still betting on an economic recovery from China, hoping that PS5 sales would be partly driven by “unprecedented demand” in the world’s second-largest economy.

While console titles are expected to account for more than two-thirds of releases this year, Sony aims to release nearly half of its new games on mobile or PC by 2025, Ryan said.

“Ryan dropped a few little bombshells during his presentation,” said Tokyo-based games analyst Serkan Toto, adding that Sony’s move into mobile and PC games was “extremely aggressive” given the modest presence of the business on these platforms.

. sony accelerate push in sector automotive in framework diversification

. Sony accelerating push automotive sector part diversification

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