Eastman Kodak image sensors were featured in an array of professional-grade digital cameras from the likes of Hasselblad, Leica and Olympus at the influential Photokina trade show in September. All those cameras, however, used Kodak's charge-coupled device (CCD) sensors rather than the newer, more power-efficient CMOS sensors that are rapidly gaining favor in cell phone cameras, PCs and other digital imaging products.
Kodak has been trying for years to break into the CMOS sensor market. Despite its century-long heritage of capturing and processing images, the company's progress has been slow. iSuppli estimates that whereas Kodak sold $190 million in image sensors during 2005, only $65 million, or 26 percent, came from CMOS sensors.
"It is making a serious push in this area, but there's tremendous competition," says IC Insights analyst Rob Lineback.
Indeed, the three largest players-Micron Technology, Omnivision and STMicroelectronics-each had more than $400 million in CMOS sensor sales during 2005. Kodak's challenge is to grab a big enough market share in time to avoid being squeezed out by larger, more cost-efficient producers.
CMOS sensors matter to Kodak because their sales are growing much faster than CCD sales. CMOS technology accounted for 60 percent of the $7.5 billion image sensor market in 2006, according to IC Insights. By 2010 it's expected to capture 84 percent of the market, which by then should be worth $12.2 billion. "CCD is in decline, and prices are eroding very quickly," says iSuppli analyst Chris Crotty.
Kodak also sees CMOS sensors as strategically important to shifting its overall business from film-based photography products to digital imaging.
Chris McNiffe, general manager of Kodak's image sensor solutions group, concedes that his company isn't a leader in CMOS sensors-yet. "But we've made a number of moves," he says, "and we're very well positioned to become a major player."
Two key moves were the 2004 purchase of National Semiconductor's CMOS sensors business, which boosted Kodak's expertise in mixed-signal chip design, and the decision six years ago to begin selling image sensors to outside customers. Since then, McNiffe says, the company has gone from supplying 90 percent of its sensors to Kodak to selling 95 percent to outside customers.
Today Kodak offers CMOS sensors ranging from low-resolution devices with fewer than 1 million pixels (1 megapixel) to medium-resolution 3- and 5-megapixel devices. Its sensors are used in automotive, industrial and security products and a few consumer digital cameras, although most of those cameras, including Kodak's, still use Japanese-made CCD sensors, which perform better in low-light conditions.
Cell phone cameras are the fastest-growing image sensor market and may soon consume more than 1 billion units yearly. Kodak sensors are being designed into several camera phones, but McNiffe declines to offer details before production begins in 2007.
Meanwhile, Kodak is targeting smaller niche markets such as autos, medical systems and industrial and scientific imaging. The company hopes to capitalize on expertise in image and color science gained from its CCD and other imaging businesses.
Even though Kodak outsources the manufacturing of its CMOS sensors to IBM and TSMC, it claims to have advantages over other fabless producers gained from years of running its own CCD fabrication plant in Rochester, N.Y. "We understand the very fundamental manufacturing processes needed to make a good image sensor," McNiffe says.