SemiSerious

I would hardly be the first to speculate that creating a separate image sensor division with its own brand is part of a larger plan by Micron management to dump the unit now known as Aptina.

According to a quote from Bob Gove in EETimes, Aptina is targeting Japan and their 9 megapixel sensor is already “effectively penetrating the Japanese name-brand camera market.” But the rapid maturation of the cameraphone market has not been kind to CMOS image sensors, and I doubt that the digital still camera is the answer to rapidly declining margins and increasing pressure on sensor manufacturers to cut costs.

The Aptina announcement tried to focus on moving technology forward – something Micron’s CMOS image sensors excelled at. This year, Aptina will release a 1.4 micron pixel design manufactured using Micron’s 95nm copper process. But that was already on the roadmap and expected based on work Micron published at the International Image Sensors Workshop in 2007. The most interesting part of all the news is that Aptina is moving to supply complete camera modules. The silicon in a typical cameraphone module accounts for less than a third of the total manufacturing cost, so it made sense for the image sensor division to expand vertically into the supply chain. Module design offers not only the biggest target for cutting the camera production cost, but also shrinking the footprint taken up by the image capture system in cell phones. Aptina claims to be sampling the MT9V113M02STC VGA wafer-level camera in their product page. I suspect that part of the module design relies on something similar to Tessera’s OptiML WLC product announced last June.

After reporting a loss of $262 million in their last quarter, Micron is feeling more pressure to make changes and re-focus their business. Is this a sign of the investment community and Micron management being unwilling to take a longer-term view of the imager market, or are there simply no big growth opportunities left?

It must be painful for others in the image sensor business to listen to the news out of Boise over the last several months. Consider Micron’s history in this field. Their success in imaging has run parallel to the unprecedented rise of CMOS image sensor technology itself. Micron came out of nowhere to become the technology leader within five years. Of course the acquisition of Photobit and the pioneering work of Eric Fossum and others in 2001 pulled Micron up the learning curve. With the purchase of Avago at the end of 2006 along with their own in-house R&D in those five intervening years, Micron has an IP portfolio envied by nearly everyone else in the business.

Micron Imaging was an incredible story. Unfortunately, the emphasis might well be on the “was.”

From a management perspective, it seems baffling whether one should combine technology groups and divisions or to create several smaller entities. Is it better to consolidate and leverage economies of scale with “costs of sales” and the many other overhead costs associated with getting your technology into the market? Or will your corporate empire be better off with a loose affiliation of smaller, more entrepreneurial divisions less beholden to the politics and personalities of the big conglomerate?

Perhaps the decision between building a behemoth and keeping things simple and agile was not even on the minds of  Micron’s management. Maybe they were thinking less about how to run an imaging business than how to sell it by creating Aptina. 
 

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