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Sony to invest billions in its image sensor business

For the first time since 1989, Sony will be issuing new shares to raise capital to invest in additional smartphone image sensor production capacity.

Published onJune 30, 2015

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Sony’s mobile division has been having a tough time lately, but the company’s image sensors are still proving hugely popular in the smartphone and wider camera markets. In a bid to play to its strengths, Sony is looking to invest heavily in additional production capacity for mobile image sensors.

To raise the necessary funds for this expensive investment, Sony will be issuing new shares for the first time since 1989, which caused an 8.25 percent fall in Sony’s share price. The company is planning to raise around $3.6 billion through a combination of selling new shares and convertible bonds.

Of the total, much of the proceeds are earmarked for investment into additional production capacity for smartphone image sensors, such as those used in Apple and Samsung products, as well as its own handset line-up. Despite high demand for Sony’s cutting edge camera modules, its current production capacity is preventing the company from maximising its revenue.

In April, Sony Chief Financial Officer Kenichiro Yoshida stated that the company would be investing ¥210 billion in image sensors during the current fiscal year and ¥80 billion on camera modules. The company is also expected to more than quadruple its operating profit for the 2016 fiscal year, following a company-wide restructuring program and strong sales of digital sensors.

For Sony, this is part of a broader plan to focus on its strongest products – music, movies, gaming and device components. We will have to see what this means for the company’s struggling mobile hardware business in the coming years, especially as Chief Executive Kazuo Hirai hasn’t ruled out abandoning the market all together.