OmniVision Looks to Longer Term

When Growth is Upon Us Again, Consider OmniVision Technologies

OmniVision Technologies, Inc. (OVTI - Analyst Report) is a leading provider of image sensors for the handset and notebook markets, and is strengthening its position in other emerging markets. The company’s technology, market position and $4.60 of net cash per share should enable it to tide over the current recession.

We are reasonably confident about a strong comeback in the post-recession period. However, we are a little concerned about the level of inventory, and believe that the company could have a hard time bringing it down. We anticipate further provisions in the near future.

Continued Innovation Helped OVTI Secure Leading Market Position

OmniVision is one of the largest suppliers of CMOS sensors for multiple end markets, with a 30% share of the total image sensor market. The company has consistently delivered new, technologically advanced products. The OmniPixel platform has been expanded to include a range of different array-sized products from VGA to the newest 5.17 megapixel camera chip. Products with greater pixel densities generate higher ASPs, higher revenue and better margins for OVTI. These higher-array chips have been challenging the incumbent CCD technology used in high-end still cameras, thus driving market share gains.

The recently introduced CameraCube module is of strategic importance. The CameraCube integrates the functionalities of an image sensor, embedded image processor and wafer level optics in one compact small-footprint package. The surface mountable CameraCube devices can be directly soldered to the PCB, and no additional socket or insertion is required. The high functionality, small size, simplified supply chain and resultant decline in BOM costs make it the ideal solution for the latest generation ultra slim handset market.

Additionally, given its thermal tolerance levels (up to 260 C), the product is expected to have broader application in other areas, including notebooks, automotive electronics, surveillance and medical. The new CameraCube devices, which include the OVM6680 (400 x 400 SGA) and OVM7690 (VGA), are immediately available in volume production.

Sejuti Banerjea contributed to this report.

Read the full analyst report on OVTI