In case you missed it, Bernstein’s David Dai on March 9th held a conference call to discuss the technology of “3-D sensing,” which makes possible augmented reality, such as the “Face ID” function in Apple’s (AAPL) iPhone X.
Dai sees a big future for the technology, as it moves to other manufacturers’ smartphones, and to automobiles, in the form of LiDAR.
"3D...
In case you missed it, Bernstein’s David Dai on March 9th held a conference call to discuss the technology of “3-D sensing,” which makes possible augmented reality, such as the “Face ID” function in Apple’s (AAPL) iPhone X.
Dai sees a big future for the technology, as it moves to other manufacturers’ smartphones, and to automobiles, in the form of LiDAR.
"3D sensing is taking off,” writes Dai, noting that it will be coming to more Apple iPhones later this year, and some select Android phones, something others have been expecting as well, though some have expressed concern there will be delays because of short supply of some components.
The benefits of all that should accrue to makers of lenses, such as AAC Technologies (2018.HK), Sunny Optical Technology Group (2382HK), and Largan Precision (3008TW); laser makers Lumentum Holdings (LITE), and ams AG (AMS); and sensor makers, of which the best is Sony (SNE), in his view.
As Dai points out, 3-D sensing has been around for several years, in virtual reality headsets and in drones. It’s now spread to smartphones with the advent of the iPhone X. He predicts that shipments of 3-D sensing modules just for smartphones will constitute a $10 billion market by 2021, from up from almost nothing last year.
For Android phones, it’ll be slow this year, "particularly because the technology is not mature enough,” with Xiaomi and Huawei the first to ship.
But "next year is going to be a much bigger year, and the year after that is when we believe that Android will again follow what Apple is doing, placing both front and the back 3D cameras on its phones."
The big tech turning point is the two approaches: “structured light,” what Apple’s using now, and was used by Microsoft (MSFT) in the “Kinect” video game controllers, versus “time of flight,” which he expects to at some point displace the former.
The former measures distortion in a laser pulse hitting an object to gauge depth. Time of flight measures time delay between emission of laser light and when it arrives at the detector.
The main advantage of time-of-flight, he writes is it doesn’t need as big a “baseline,” meaning, the horizontal distance across of the sensor, which makes it easier to fit in a smartphone — specifically, to reduce the “forehead” or “notch” at the top of the smartphone:
For structured light, there is a required distance between the projector and the receiver which is what we call the baseline. The baseline needs to be proportionate to the depth that you're sensing […] That’s why time-of-flight intrinsically has a major advantage here because the technology is not based on triangulation. And hence, the baseline between the projector and receiver can be very, very short. It’s only constrained by the manufacturing procedure. And because of that, the time-of-flight module can be very, very small. So this is a major advantage that time-of- flight has over structured light.
"Sony is the best ToF sensor maker,” writes Dai, "and potentially will dominate this space when ToF takes off next year."
So far, writes Dai, 3-D sensing is relatively low resolution in both structured light and time of flight. Apple and Sony are working on making the two much higher-resolution:
We believe that Apple is working on improving the resolution in the second half of this year, which is potentially triggered by -- I'm sure you have seen some of the negative news on how iPhone is not able to tell twins apart because of the low resolution. But nevertheless, it’s not going to be significantly more than VGA. And for time-of-flight, the situation here is that traditionally, the resolution of time-of-flight is indeed low. On smartphones, the highest resolution we have seen for a small module was only 320 x 180. But here, there was a major breakthrough by Sony. Sony managed to reduce the pixel size of the time-of-flight image sensor significantly, and they are now able to produce a VGA resolution, the small sensor that is capable of being used on a smartphone. And they are ready to ship the sensor by the end of this year.
Dai advises to keep an eye on Himax Technologies (HIMX), whose tech may be essential to the first Android smartphones with 3-D sensing:
And the other company that I would highlight here is Himax, which is the only company that is supported by Qualcomm, or I guess Himax/Qualcomm is the only solution that is supported by Qualcomm processor this year. Which means that for other than Huawei, which has its own processor, anybody else who wants to use 3D sensor and they want the 3D sensor algorithm to be supported by the application processor, this year Himax is the only solution that they have.