Artificial intelligence is the hottest segment in technology. And within this hot segment, there is one niche that stands out. The biggest beneficiaries of the artificial intelligence revolution will found in image sensors, a September “Global View” report from Bernstein observes. For investors that sense opportunity can be seen is tangible, as this market is set to grow dynamically as its use in automated vehicles, in payment systems and even refrigerators are driving growth. Within this hardware opportunity one company, Sony, stands apart.
Humans obtain 80% of their information through vision, and computers are following image sensors trend
Sensors have out paced total semiconductors in sales every year for the past six years, and that demand could grow exponentially. Consider autonomous vehicles, for instance. Each vehicle will likely carry up to 10 image sensors as they replace traditional cars on the road. Such vehicles will not only revolutionize the transportation industry but for those firms supplying products the opportunity to grow will equally be robust.
This shouldn’t come as a surprise.
If artificial intelligence is to mimic the human experience it is likely to do so using sight. Humans obtain nearly 80% of all their information through vision. Analysts say computers, which have been almost exclusively text-driven in their informational input, are on the verge of becoming more human in the way they collect information. In fact, Bernstein sees the point where computers surpass humans in image recognition.
Machines in the future will be scanning images, reading a static text as well as monitoring movements to determine and categorize certain human behavior types. This can manifest itself into a large market opportunity primarily in smartphones and vehicles, but also in drones, surveillances as well as virtual reality and augmented reality.
Smartphones have carried numerous sensors, but it is the visual sensor that will transform the industry
Non-image sensors are nothing new to smartphones. In fact, most smartphones carry at least seven types of sensors. This includes: accelerometer sensors that enable automatic switching of display orientation; gyroscope sensors detect when the phone is rotated; a digital compass identifies the direction of the phone used in mapping; proximity sensors switches off display automatically when we make phone calls; a light sensor that adjusts the screen brightness automatically.
This sensor capacity is going to receive a significant shot in the arm with image sensing. Bernstein projects in five years, demand could grow 62.6% or 10.2% each year.
But it isn’t just smartphones where the applications are likely to proliferate.
Smile to pay will keep Sony smiling
Facial recognition is anticipated to become a method of security validation and could be all that is required for people to pay at a store. Alibaba’s Ant Financial, for instance, recently launched a “smile to pay” facial recognition system at regional KFC fast food restaurants. After placing an order at the computer kiosk a KFC in the eastern city of Hangzhou, for instance, the customer only needs to look into the 3-D camera to pay.
The human face is expected to be used as a password or entry key for a variety of applications, including your computer and might be used to gain entry to a house or drive a computer. Smart refrigerators are expected to contain image sensing technology that makes a shopping list.
At the center of the image sensing industry is Sony, who Bernstein categorizes as the “undisputable leader” with nearly 48% market share by revenue. As demand is growing – and has potential to rapidly change, the Toyko, Japan-based company is increasing production capacity. This is expected to become a meaningful driver for Sony's profit growth, with image sensors and games forecast to represent 54% operating profit in the full year 2017. Samsung is another leading provider, but currently has less than a 10% market share, as a recent Deutsche Bank report called their efforts at software development “inferior.”