Sony chip unit sees limited impact from recent export curbs to China

By Kiyoshi Takenaka and Mayu Sakoda

TOKYO (Reuters) – Sony Group Corp’s semiconductor division will likely see a limited impact from chip export curbs to China by the United States, Japan and the Netherlands, Sony Semiconductor Solutions Chief Executive Terushi Shimizu said on Thursday.

Sony is the world’s largest maker of image sensors widely used in smartphones and autos. Its competitors include South Korea’s Samsung Electronics Co Ltd.

The United States announced sweeping curbs on semiconductor exports to China in October last year to slow Beijing’s technological and military advances. The Netherlands and Japan last month also agreed on chip-related export restrictions, although no details are available.

Shipments of Sony’s security camera-related products could be affected by the U.S. export curbs, Shimizu told Reuters, but “it will only be a tiny bit”.

The negative impact to its sales will likely exceed one billion yen ($7.47 million), but be below 10 billion yen, or less than 1% of the unit’s total revenue.

The chip division expects total sales to come to 1.42 trillion yen for the year ending March 31, 2023.

Shimizu said the company’s microchip operations will be little affected by the wider curbs, as the division does not generally handle cutting-edge chips.

The chip unit’s chief executive also said that smartphone demand will likely recover from the second half of 2023.

Global smartphone shipments hit 1.2 billion units in 2022, the lowest since 2013, according to research firm IDC.

Sony’s chip division is investing $500 million in Taiwan Semiconductor Manufacturing Co’s (TSMC) chip-making subsidiary, a step aimed at securing a stable supply of logic chips used to manufacture image sensors.

The subsidiary’s $8.6-billion plant in Japan is slated to start output by the end of 2024, and TSMC said last month it was considering building a second plant in Japan.

“We have not heard from them on when this second phase will be launched. But the fact that they have made such a comment for people outside the company may mean they have started taking some action,” Shimizu said.

Sony’s semiconductor division posted record sales and operating profit in October-December, helped by robust demand for image sensors and a softer yen.

Shimizu said the division was “largely on track” to achieve a 60% market share in the global image sensor market by the year to March 2026, up from 43% in the year to March 2022.

($1 = 133.8700 yen)

(Reporting by Kiyoshi Takenaka and Mayu Sakoda; Editing by Raissa Kasolowsky, Shounak Dasgupta and Sharon Singleton)