OmniVision Technologies (OVTI, Financial) illustrated excellent fiscal first quarter results with its main mobile phone market witnessing solid demand from OEMs based in Asia, particularly in China and offsetting its North American business decline.
Product innovation
OmniVision is focused on application and new technology development. Its innovative flagship PureCel sensor is designed on advanced semiconductor process note and having superior power efficiency, light sensitivity and image quality. OmniVision has already released its 2-megapixel, 5-megapixel, 8-megapixel and 30-megapixel PureCel sensors in the market.
OmniVision is executing on improved and highly advanced functionalities for its prospective PureCel products. It is also crafting a complete portfolio of ASIC having superior image processing functions.
OmniVision has partnered with several industry producers for allowing 3D depth sensing in both tablets and smartphones.
Going forward, the accelerated adoption of fresh applications in both main and developing markets like security and automotive enabled by machine vision is estimated to attract significant long-term demand from the image sensor market.
Considering the significant market adoption of smartphones globally, OmniVision has regularly invested hugely for a long-term to allow for geographic diversifications. Its long-lasting relationship with key design houses in Asia particularly in China, module manufactures, ODMs, chipset vendors and OEMs have been highly productive. It is continuously assisting all key OEMs for transitioning towards LTE enabled smartphones.
In addition to China, India seems really exciting market in terms of growth for the technology major. OmniVision is significantly investing for developing key relationships with local OEMs in India and China.
OmniVision is keen on market diversification into security and automotive sectors. It is also focused on new camera markets. Further, Advanced Driver Assistance Systems or ADAS is gaining popularity among some key automotive OEMs.
The automotive business of OmniVision is believed to be the fastest growing segment and the introduction of the company’s innovative technologies like ADAS is estimated to accelerate growth in future. The security market is believed to follow the success of the automotive market to actually evolve into a significant end market for camera technology.
In addition to the development of PureCel OmniVision is continuously focused on optimizing its supply chain.
Impressive demand
In the first quarter of fiscal 2014, OmniVision supplied 249 million units, up from 201 million units deployed in its previous quarter. The increase in shipments for HD sensors and 5-megapixel cameras at low cost mainly constituted the volume increase.
The Chinese smartphone market witnessed solid growth in valued smartphone categories. Chinese OEM supplied phones to their own domestic market coupled with exporting the phones into Latin America, Africa and Asia. This growth is witnessed across all key resolution categories such as 13-megapixel, 2-megapixel, 8-megapixel, HD and 5-megapixel resolutions.
Indian OEMs are leveraging several image sensor solutions from VGA to 13-megapixel. The OEMs in India contributed significantly to the company’s revenue and is believed to contribute exponentially to the growth story, going forward.
OmniVision has grabbed a major reference design win for an extremely high-volume low-cost operating system platform leveraged in smartphones mainly aimed towards India. It also signed several design win contracts with key Indian handset OEMs. Recently, OmniVision grabbed major design wins in Korea with its innovative PureCel based 13-megapixel and 8-megapixel sensors for major OEMs.
For notebook PC segment, OV9728 sensors and advanced 720p sensors recorded huge volume expansion and contributed significantly to the market revenue. Its traditional OV9726, 720p sensor recorded small volumes. Its highly advanced BSI-2 based 720p sensor delivering supreme notebook image quality also supplied to a Tier-1 OEM in constant volumes.
The autonomous driving technology is expected to require advanced algorithms and image solutions, leveraging many more cameras for interior and exterior functions, thus driving excellent demand for OmniVision products and hence shareholder value.
Conclusion
Hence, OmniVision looks like a good investment option. It is focusing on innovation, and this should allow it to benefit from a number of markets, making it a good long-term bet.
