Sony to raise $3.6bn to speed reinvention as component company

July 02, 2015 // By Peter Clarke
Sony is going to spend $3.6 billion that it plans to raise through a rights issue exclusively to beef up its image sensor business. This begs the question: how long it can continue as a vendor mobile phones and TVs?

Sony Corp. (Tokyo, Japan) has announced plans to raise about 440 million yen (about $3.6 billion) for use increasing its manufacturing and R&D capacity in stacked CMOS image sensors.

The move appears part of a strategy at Sony to reinvent the company as a niche component supplier and to move away from equipment markets, such as computers, televisions and mobile phones, that have contributed to company losses as it faces competition in consumer electronics from South Korea and increasingly from China.

However, Sony is the world's leading vendor of CMOS image sensors, which are used in smartphones and computers in increasing volumes, and that is where the latest round of fund raising is being spent exclusively. Sony had about 27 percent market share of the CMOS image sensor market in 2014 according to market analysis firm Yole Developpement (see Omnivision loses ground in CMOS image sensor ranking ). Over the last year the company has continually raised its capex for image sensor production.

Even so Sony executives have said they are struggling to keep up with demand. The company is now planning to raise $3.6 billion in July as a mix of equity and debt to fund further capex and R&D increases.

Sony is listed on the Tokyo and New York stock exchanges and expects to raise 321 billion yen (about $2.6 billion) by issuing new shares in the company. This will be the company's first rights issue since 1989. The company plans to raise an additional 119 billion yen (about $960 million) in convertible bonds.

Sony said it plans to use 188 billion yen (about $1.5 billion) for increasing the production capacity of, stacked CMOS image sensors in the devices business and the rest (about 133 billion yen) for R&D into stacked CMOS image sensors.

In a statement Sony said the fund raising was intended to strengthen the company's financial base and that it "aims to secure its ability