Samsung Electronics has solidified its partnership with Taiwan-based UMC to advance its position in the competitive image sensor market, challenging the current industry leader, Sony. This collaboration, part of Samsung’s “Fab-lite” strategy, was officially confirmed on May 1, highlighting a significant shift towards optimizing production efficiencies and aggressive pricing strategies.
Under the “Fab-lite” model, Samsung concentrates its operations by handling core manufacturing processes internally while outsourcing less critical steps to external foundries like UMC. This approach enables Samsung to allocate more resources towards developing high-performance image sensors for smartphones, while entrusting the production of lower-cost sensors for devices such as robotic vacuum cleaners and other home appliances to UMC.
UMC, which holds the fourth-largest share in the global foundry market, specializes in legacy processes like 22 nm and 28 nm technologies. Their expertise provides a robust backbone for Samsung’s diversified manufacturing needs, facilitating the Korean giant’s ability to scale production without the burden of escalating operational costs.
This strategic move is a part of Samsung’s broader intent to dethrone Sony, which commands over half of the market share in the image sensor sector. Samsung’s competitive edge is further sharpened by its technological prowess; it was the first to introduce a 200 million pixel image sensor in 2021 and plans to unveil groundbreaking sensors with more than 500 million pixels next year.
Through this dual manufacturing approach, Samsung not only expects to enhance its production capacity and efficiency but also aims to offer more competitively priced products, potentially reshaping the market dynamics and challenging Sony’s longstanding dominance in the image sensor market.
