Sony intensifies its push into the auto sector as part of its diversification strategy

Sony expects to supply imaging sensors to 15 of the world's 20 largest automakers by 2025, underscoring its ambitions in electric vehicles and autonomous driving as it tries to diversify beyond mobile phones.

With the unveiling of the Vision-S prototype EV, the Japanese conglomerate announced its intention to intensify its push into the automotive industry in 2020. It launched an electric vehicle division this year and announced a joint venture with Honda to make cars.

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

Sony expects to sell automotive imaging sensors to 75 percent of the world's top 20 automakers by the financial year 2025, according to Terushi Shimizu, the head of Sony's imaging and sensing business.

According to him, the 20 automakers will produce 80 percent of cars sold globally within three years. Sony plans to spend about 900 billion yen ($7 billion) on imaging sensors between 2021 and 2030, nearly three times as much as it spent between 2015 and 2017.

Chips are an acute challenge, as the pandemic has squeezed supply chains and drastically reduced inventories.

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

Tokyo-based semiconductor analyst Akira Minamikawa said Sony has made progress after a stuttering start. Sony has struggled on the car front at first, but they are catching up fast. Production capacity issues have arisen, but they are being addressed thanks to the tie-up with TSMC," he said.

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

PS5 was launched late in 2020 and sold fewer units in its second year due to pandemic-related parts shortages. Despite this gap, analysts expect it to close in the third year and overtake PS4 sales by 2024.

We intend to ramp up PS5 production significantly this year, allowing us to close the gap with PS4, according to Jim Ryan, Sony's gaming chief. Sony planned to increase console production even further, reaching production levels that have never been reached before, he added.

Despite that, Ryan said supply issues were his "top priority," pointing to risks associated with COVID-19 lockdowns in China and Russia's invasion of Ukraine.PS5 sales may be driven in part by “unprecedented demand” in China, the world's second-largest economy.

Sony plans to release nearly half of its new titles on mobile or PC by 2025, Ryan says, as console titles make up more than two-thirds of releases this year.

“Ryan dropped some bombs during his presentation,” said Tokyo-based gaming analyst Serkan Toto, adding that Sony's move into mobile and PC gaming was "extremely aggressive," given the company's modest presence on these platforms.

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