Good afternoon, and good morning, everyone. Thank you for joining what is now the 3rd session of our Capital Market Day 2020, the presentation of our Analog MEMS and Sensors Group AMS. Jean Machierry, Estee's President and Chief Executive Officer, will start with introductory comments. Then Benetto Vineyard, our President in charge of AMS, will go through the presentation of his group. It will be followed by a Q and A session where Jean Marc and Benetto will be joined once again by Lorenzo Grande, our President of Finance, Infrastructure And Services And Chief Financial Officer, and Marco Cassis, our President of Sales, Marketing, Communication And Strategy Development.
As we did for the last session, we will use us the Q And A using audio only. As usual, few housekeeping items before we start. This slight webcast and presentation materials can be accessed on Neste's investor relation website. And the replay will be available shortly after the conclusion of this event. This presentation will include forward looking statements that involve risk factors that could cause ST's result to differ materially from management, expectation, and plans.
We encourage you to review the Safe Harbor statement in ST's most recent regulatory filings for a full description of these risk factors. Also, to ensure all participants have an opportunity to ask questions during the Q And A session. Please limit yourself to one question and a brief follow-up. With this, before I turn the floor over to Jean Marc, Let's start with a brief reminder of our key strategic objectives.
Good afternoon, or good morning to everyone. I am pleased to introduce our last product group strategy update with the Analog, MEMS and sensor group. AMS is one of the main contributors to our industrial and personal electronic strategic objectives and with a more focused approach to Automotive And Communication equipment, computer and peripherals. Its contribution is clear also looking at the 2020 revenue trends, 12% higher revenues in the 1st 9 months compared with the same period last year. And this despite the pandemic that hits our industrial market very hard.
Among our 3 product groups, AMS is a broadest exposure to hold the full end market we address. Since we covered the automotive market dynamics extensively a couple of weeks ago, Let me provide you with a short overview of Resorts' 3 end markets. During Q3, The industrial market dynamics remained mixed, but gradually improved during the quarter. This trend was visible across all geographies. Demand was strong for power tools and home appliances, We continue to see positive dynamics in power related applications, motion control and factory automation.
All of which are focused areas where ST and specifically for AMS. Distribution is an important element of our go to market strategy in Industrial. Here, the improvement of the situation in the channel is continuing to accelerate. In Asia, point of sale trends remained strong in Q3, up sequentially and year over year, with healthy levels of inventory in our distribution channel, across all products families. In the Americas And Europe, recovery is still ongoing, with point of sale up sequentially.
Here, also inventory is back to LC levels across all products families. In personal electronics, during the third quarter, There was a strong restart of consumer demand for smartphones, accompanied by steady growth in wearables, tablets, hearables, end game consoles. This was driven in part by the Stay atom effect, and by consumer demand for health and fitness devices. In communication, equipment and computer peripherals, During the third quarter, we continued to see growing demand for home working related products, while The demand for hard disk drive was softer. In Benelatos presentation, you will see a number of technology product and application related innovations, supporting the megatrends underpinning our strategy.
From fully autonomous sensors, providing artificial intelligence at the edge of the edge for the industrial IoT. To optical sensing solution for direct and indirect time of flight for personal electronics. From smart mobility solutions with Motion, MEMS and LiDAR Technologies to Leading Edge Power and energy solutions for server, motors, and wireless charging. You will also and with key customers. Thanks to 1st, its industry's broader portfolio in MEMS and optical sensing solutions, 2nd, a differentiated and competitive portfolio of application specific analog products complemented by General Purpose And Alloys, addressing all ST's target markets.
3rd, a diversification strategy across customers and end markets, enabling profitable growth. And now let me hand over to Benito. Thank you.
Thank you, Jean Marc. Good afternoon, and good morning to everyone, and welcome to this presentation on AMS, the analog, MEMS and sensor group. This year, we will not have the pleasure to meet in person, But today, we can still be together, thanks to various technologies, many of which come from ST. I really hope that this digital experience will be equally effective. 1 year has gone by since the last time we met, and I'm happy to confirm you that we are in line with the plan presented during the last Capital Market Day.
How did we do? I would summarize by saying that we maintained continuity of our strategic direction We have continuous improvement in realizing and enhancing our unique value proposition, fully aligned with ST strategy goal. There are three points I'd like to address in this talk about AMS. First, a few financial figures where I'm pleased to confirm that the 2020 business trend for AMS is good despite the pandemic, 2nd, our strategy to continue to grow based on our distinctive product innovation DNA with the double helix of differentiated technologies and application know how and focus 3rd, our product strategy to match the growing needs of each of our end market. Let's start with the financial.
AMS is made up of a team spread throughout the world, and it represents about 1 third of ST revenues. Despite the pandemics, I'm pleased to confirm that the 2020 business trend of AMS is positive. In fact, the 1st 9 months of 2020, AMS revenues were 12% higher than year on year. In this period, we build at around a $2,500,000,000 out of which $1,500,000,000 in MEMS and sensors and $1,000,000,000 in analog. In analog, we grew less than in MEMS and sensors.
Why? Because on general Pappas and our product, we experienced that the negative impact of the pandemic on our mass market business. Our growth is driven by 2 underlining trends that are fundamental to the 3 megatrends that ST is focusing on. The first is the centralization of the world around us. That enable analog signal to be converted to the digital data, bringing the real world into the digital world.
The second is the smarter and more efficient energy use. In the past 5 years, our strategic direction has been consistent. Product wise, we have 2 pillars, analog and MEMS sensors. In Analog, we address 2 kinds of products: 1st, application specific product, mostly driven by key customers, 2nd, general purpose product for the mass market. These are the glue of any electronic system.
We have a spatial focus on signal conditioning, like opamp and voltage reference and on power management, like DCDC, and AC DC converters. In MEMS sensors, we offer both MEMS sensors and actuators and optical sensing solution. Market wise, we address all the 4 ST end market. We have a strategic focus on industrial and automotive with our sensors, general purpose analog, connectivity and power management solution. In personal electronics, we are pushing high volume opportunities with optical sensing solution MEMS and power management, in communication equipment and computer peripherals, we are very selective.
In our approach with our portfolio of sensors, micro traders, as well as power management for servers and storage devices. With all this product, with all this product, we serve about 70,000 customers, from large OEM to smaller customers that we address through the distribution. After this strategic overview, let's go now to the 2 AMS product pillars, and let's start with our MEMS and optical sensing solution. Optical sensing solution and MEMS are more and more pervasive in our industry and in our lives. They are key for consumer and for industrial IoT for artificial intelligence, for 5g Networks, for biometrics and for data system in car today, as well as autonomous car of the futures.
They are important today and tomorrow. They are going to unlock additional revenue streams. Indeed, thanks to this product, real world signals like vibration, sound, the pressure proximity and ambient light will reach the digital world for data processing without the need for keyboard, mice or touch display. In the past 15 years, we sold more than 5,000,000,000 mems actuators and more than 20,000,000,000 sensors both MEMS and optical sensing solution. We are, by far, the world leader in time of flight sensor, a motion MEMS for personal electronics and automotive telematics.
We started from a personal electronics that still represent the largest market for us. And we then expanded into the other market. 5 years ago, we started our diversification journey along 4 vectors: technology, product, application and market segment, and it is yielding result according to our plan. Now after this, let's focus on our MEMS business. An area where we have 2 solid leadership positions.
Number 1, in Motion MEMS for personal electronics, and automotive telematics with 50 percent market shares and number 1, in micro machine adapt traders for inkjet printing. Underlining these MEMS success, we have unique and flexible differentiated technologies, such as Dell Members C, that we have been developing over the last 15 years. They enable us to develop a broad product portfolio that is much larger than when the MEMS consumerization wave started. At that time, the human machine interface was the only the having application. We are determined to keep this number one position, supported by the development of leading edge product, such as accelerometers, 6 axis, inclinometer a pressure sensors we announced earlier this year.
Our strategy is to continue to focus on the development of ultra low power and dire accuracy sensors. For this, we are developing innovative sensing architectures and we are embedding helps to reduce the overall power consumption substantially. We are talking about a power reduction of up to a factor of 100 just look at our latest 6 axis announced at the last week. The sensor in full autonomy, I repeat, in full autonomy will be able to process raw data and to deliver to the processor only the relevant information. This is artificial intelligence at the edge of the edge, and it works in complete sync with the overall AI strategy of ST.
After the MEMS world, let's talk about our optical sensing solution. Last year, when we met in London, I told you, we were working on 2 axes: 1st, maintain our number one position in time of flight, 2nd, diversify our technology, product, the customers. I am glad to share with you that also in this case, we are on track with our plan. On the technology side, as you know, we are developing all the technologies needed for structural light, direct indirect time of flight and stereoscopic approach. We made significant progress in global shutter, fast photo diode and spud technologies.
Today, We have a 14 nanometers spud the pixel for direct time of flight in production, and we continue to invest inspads technology development. We also made significant progress in BSI Technology, to increase the quantum efficiency and to shrink the pixel size. On the indirect time of flight, We transitioned it to 4.6 micron pixel, and we plan to decrease even further. In global shutter, we are also moving from 2.6 micron to 2.2 micron pixel. These all represent important progress in a challenging field.
On the product side, we continue to enhance the performance of our Flight Sense family and Daniel Light sensors. In Flight Sense family, we increased the detection distance and the field of view went from 27 to more than 60 degrees. A big, big step forward. For ambient light sensing, we had the win with a major OEM in the field of personal electronics, and years, we displaced a strong competition. After technology, after product, the customer side Here, we started to deliver our multi zone 14 nanometers spud the product to Samsung.
We've been able to differentiate from major competitors with this unique product. It offers high performance and die level of integration. This recent success is a big, big step forward in the world facing application. It complements very well, our leadership in the Android market, we've spanned for laser assist out of focus application, and in laptop with our presence sensors. Today, personal electronics remains still the main market for optical sensing solution.
You know, diversification takes time. It does not come so simple, but we are on the right track. Indeed, you can find our time of flight product in PC for presentation and next year, you will find our global shutter technology in the car for in cabin monitoring. But now let's talk about sensors for automotive, more in detail. Automotive is a world where high performance and ultra low power sensors are extremely important.
In the car, whether electric or traditional combustion engine, you need an increasing number of sensors such as a kilometer, gyroscope and lighter, but also in cabin infrared sensors. In the past year, AMS has made a good progress in automotive. 1st, we maintained our number one position in motion memes for telematics, and we expanded our motion MEMS business in safety application such as vehicle stability, in line with our plan. We grew significantly in 1 major OEM. We also see good perspective for future growth because we are not competing with our customers.
2nd, we believe that the lighter will become more and more important for ADAS and autonomous vehicle system. Different technical solution will be using the market. That's clear. So on one side, we announced last April, a customer partnership with LeatherTech to develop a miniaturized ultralow power lighter using scanning MEMS mirrors. On the other side, we are developing solution based on our latest generation of a flight sensor technology using spud in 14 nanometers.
LIDAR will enrich the information flow in the car to advance the processing unit, such as those developed by our colleague in Automotive And Discrete Group 3rd, we won a business for a driver monitoring system application. Supporting legislation in various countries, especially in Europe from 2020 to onward. Our global shutter sensors offer the dynamic range in the low noise required by incabin optical sensing. Here, we are working with multiple OEMs, Tier 1s and partners such as specialized software companies. We are engaged in multiple programs with key OEM and sales are forecast to start the next year.
Whatever the technology, the customer select, we are not competing with them. And this is a key competitive advantage. All of these sensors, motion MEMS, global shutter image sensor and lighter are also very important for industrial applications. Can you imagine the benefit sensor will bring to the industrial world? Indeed, in these days, we see a lot of emerging application for industrial IoT.
Asset tracking, predictive maintenance real time monitoring and metering our world that are in our daily jargon. A few years ago, These were just words known only in academic circles, many papers, 0 business, Today, this is different. We are talking about application to optimize the supply chain, to track the asset to fully digitalize the factory and to meet their critical resources, such as electricity, water and gas. For all these applications, AI at the edge of the edge and connectivity, with or without wires, play a fundamental role. Here, we have multiple solution to satisfy the various needs and we made the progress with technologies like Bluetooth flow energy subgiggers radio, PLM, KNX, and IOLink.
We also start to see sensors used for structural health monitoring. You know, several years ago, some universities start to use our accelerometer for vibration monitoring of the Milan Football Stadium. At that time, power consumption was weighty. Now, thanks to ultra low power consumption, we see sensor mounted on elevators, windmills and on critical infrastructure such as bridges, dams and tanners, but this is not all. Industrial application can also benefit from the adoption of new technologies or regionally conceived for entertainment and gaming.
I'm talking about augmented reality technology, designed to merge the digital with the analog world. 1 key enabler is a small high resolution and low power MEMS mirrors. These tiny silicon devices came paved the way to new services and ways to work, socialize and interact We are already in production with electrostatic and electromagnetic mirrors, and we are ready to launch in 2021 the next generation based on piezo electric mirrors. Together with 4 partners, We also launched the Lasser Alliance to shorten time to market for augmented reality high wear. You can find already our MEMS mirror in two products on the market, all lines from Microsoft and real sense from Intel.
Two products with 2 different use cases. Our mirrors in Microsoft OLLO lens can help a surgeon to be more precise in patient critical surgery or help a fab manager to plan better in advance for an optimal layout of all equipment ES2 installed in this fab. Our mirror could also help us to feel closer to our colleague when we find ourselves remotely working because of the pandemic related threats, not the same feeling. As the phase 2 phase situation, but for sure, much better than the current one. Our mirror will enable new application in the industrial world.
By adding the 3rd dimension to the digital world we talked in detail about MEMS and sensors. We talked about the product, the technology, the market, Now let's move to the 2nd pillar of this group, the analog. First, I will cover general purpose analog and then application specific product. General Purpose analog product are very important for us. Since with this product, and together with our distribution partners, we are addressing the mass market with a special focus on the industrial segment.
Our product are used for power management, interfaces, signal conditioning. Because of pandemic, in the 1st 9 months of this year, we experienced the revenue drop year over year, but we are definitely on a positive trend in the last all of the key business programs from May 2019 are well on track. And in addition, I would like to highlight 3 new product families we recently announced. First, the Master Ghana product family already in production, allowing to shrink the size and the weight of power adapter for PC as smart on by a factor of 4. This is possible, thanks to the intrinsic benefit of the Gallium nitride and our unique BCD technologies.
We are at the dawn of a new phase in power conversion, and we wanted to play a leading role here. 2nd, power management chips for our STM 32 microprocessors. These devices offer high efficiency DCDC converters to power the NPU with a flexible and scalable architectures, optimizing power consumption of the entire system. 3rd, the family of power management IC for SSD and servers. We call them cloud power and SSD power.
Reliability is key for this application. With our proven BCD technology, we are among the few players capable to deliver a power efficient solution, meeting the reliability needs. Managing energy more wisely, more efficiently is for sure a key priority for us. That's why We continue to invest in application specific product for industry 4.00. Our chips enable higher safety and increased the level of automation in synergy with our broad offering sensors.
Attention is often focused on artificial intelligence algorithm, required by industry 4.00, but we should not forget. We should not forget the arblers that enabled 2 important feature of industry 4.0. First, more distributed the control for increased flexibility. 2nd, safer, cheaper and more reliable processes. Moving from centralized to distributed control.
Sensor data from the real world must be available in real time. And everything must be connected according to different standard We already addressed the importance of the sensors as well as wired connectivity, like IOLink and KNX. Now let's talk about In the world of Metering, we are market leader in Europe with our power line management solution, and our solution are now being deployed also in Latin America. Our chips are in electricity meters and also in solar panel enabling remote monitoring and safer operation. In the field of motion control, with our ST spend, and SD DRIVE product families, we are able to drive any kind of motor, either DC or stepper or brushless.
Over a wide range of power from a few 100 watt to tens of kilowatt. Depending on the customer needs, we can pack in the same package, in the same package, 1 or more dies, such as the driver, the controller and the high power output stage, either in silicon or in gallium nitride. An important proof point for us. In the last years, our rate of innovation increased substantially 25% 1 over 4 of industrial sales in the 1st 9 months of 2020 came from product less than two years old. But in the factories of the futures, people and robot will work closer and closer together.
So called cobots will be more and more common. Thus, industrial processes must be made more reliable and safer for human beings. With the digital transformation, dive voltage in the low voltage section of the system will come closer and closer. So safety and protection are becoming more important. And in this direction, one technology play an important role.
It's the galvanic isolation. Galvanic isolation enabled new system architectures. It allows the integration of analog, power and logic in the same package. Without compromising human safety. Our Galvanically isolated gate drivers and intelligent power switches can go up to 6 kilowatt.
They are already in production for factory automation, and our chips are driving silicon carbide transistor in well known electric vehicles on the road already today. But that's not all. Before closing this section on analog application specific product, let's talk about an important growth driver. Wireless charging. All all the key business programs for wireless charging are in production as we planned.
Here, we replaced 2 strong competitors, thanks to our BCD technology and design IP. We believe that today, we are the only company able to provide such a broad range of solutions. From a few whats, for wearable and hearable devices to more than 40 watt for high performances, 5G smartphone. And that's not all. We continue to develop efficient wireless charging solution up to 100 watt.
For both transmitted receive. All in all, we are committed to maintain a leadership position in this application. Let me now conclude. I'm very pleased to confirm that despite the pandemic the 2020 business trend for AMS is good. In the 1st 9 months of this year, AMS revenues were 12% higher than year on year.
Going forward, with continuity of our strategic direction, we believe we are well positioned for balanced growth in both distribution and key customers. And this is thanks to the 3 factors: First, our industry broadest portfolio from MEMS to optical sensing solution, which we are rapidly expanding through diversification. 2nd, our differentiated highly competitive application specific analog product complemented by general purpose, analog addressing all market segment from personal electronics to automotive. From industrial to communication equipment, they compute a peripheral third, our distinctive product innovation DNA with the double lx of differentiated technologies and application know how and focus, thanks to a strong customer intimacy. Thank you so much
Thank you, Benelito. We are now ready to take your questions.
The first question comes from Achal Soultania from Credit Suisse. Please go ahead.
Hi, good afternoon. Thanks for the question. Just trying to understand on your 3 d portfolio, you mentioned you're working on a various different technologies be it structured like time of flight stereoscopic vision. Can you help us understand what are the challenges or the limitations of time of flight today, if it were to be used for facial recognition in the front of the camera? Are we already there with the technology or we still need to resolve a few of the issues to make it as accurate as structured light.
Thank you.
I think that today, let me say, you can find a similar solution from a technological point of view on the market. But one that is providing the best resolution in terms of, let's say, pixel size and those terms of accuracy is by far the structural light. The structural light is because of its intrinsic approach in the short distance is providing a better and higher resolution. The time of flight is good, but especially good from medium range to further range.
So just frankly, Ken, are there any work going around time of flight to make it as good as your light for resolution as well or is it something that probably will take much longer than maybe the next year or 2?
Yes, I think that, that's put in this way. The structure of the light has the big advantage of being used in agro volume. So everyone in the industry or the player in the industry can have a more experience, how to cope and how to achieve agro resolution. The indirect time or direct time of flight does not, cannot count on the same amount of volume, over the phone, we've tried to capture light. So if you go to see the the algorithm are behind, theoretically they can reach more or less the similar limit.
But on one side, there is much more manufacturing experience that is helping everyone all the players to push much further the structure light in terms of resolution and accuracy Now in the futures, let's say, another solution can appear. And the reason why, as I said, a few minutes ago, we are investing on technologies that enable both stereoscopic, structured and time of flight, direct or indirect.
Okay. And maybe one follow-up on your partnerships with customers in China, we understand that Huawei was obviously one of the key customer you had for both wireless charging and also for optical sensors. Now with the ban on Huawei, how are you positioned with some of the other local brands in China, like Oppo Vivo and Xiaomi? Is the relationship improving there? Or you think that there is still room for that partnership to evolve further with those 3 vendors in China?
I think that we need to remember a little bit what is AMS, analog MEMS and sensors. We are working with some with Chinese players, his many years, okay? And with some of the one that you mentioned at the we really started when they were very, very small. So let me say in this way, we are addressing with our broad range portfolio. We've analog product with optical sensing.
And we are addressing all the Chinese players.
Next question please?
Next question comes from Andrew Gardiner from Barclays.
Benadetto, if I could ask one on the topic of ambient light sensing, you mentioned you've been you guys have been talking about this a sort of a year or 2 now in terms of it being a target market for you. You mentioned the one win with a major OEM in per electronics. I'm wondering if you can give us a bit more detail, a bit more of a hint as to where within personal electronics that might sit. You also referenced that you displayed strong competition. What was it about your product, your design or your technology in particular that think caused you to win that?
And then finally, how are you seeing other opportunities? What can you give us a sense as to the addressable market in the next couple of years for you within ambient light. Thank you.
Thank you for your question. You remember very well, I said already 1 year ago in London that we were working on ambient light sensors and we were going to make an improvement in this, with this product. And indeed, As I said before, we are on track with our plan. So next year, you can buy some product with our ambient light sensor What is unique, you ask, what is unique? I think that the performance of the product allowed us to win against some, let's say, competitors.
And this performance is related to the ambient light sensor per se, but is also related to the fact that by making different kind of sensors. As I said, MEMS and optical sensing solution, we can optimize the ambient light sensors looking at, let me say, all the dimension of the product. So we started to invest, we will start to have the business next year as planned and we plan to continue to grow in the years to come. And the beauty is that by adding different kind of sensors, we can also think combination of different sensors together with ambient light.
Thank you.
Just last point, I mean, when you're saying the different types of sensors you have within your portfolio allow you to optimize the solution And so is that just in both in terms of a standalone ambient light or MEMS? And then you went on to say, well, can combine them into a module depending on what the customer needs. Just on the first point, what is it in terms of your the sense of know how more broadly that is allowing you to optimize. Can you just give us a
bit more detail there?
No, I think, I can record the numbers I mentioned in the presentation. We have put let's say, on the market, more than 20,000,000,000 sensors, and sensors have a little bit different from standard conductors. And when you manage a new, in high volume, the production of sensors, you discover a lot of features that are important. Both on the performance side and also on the manufacturing side. And we did experience that we gained as we evolved this sensors.
We've ordered the sensor and let me say in quantity, but also in variety, we have been able to optimize the product in performances and sourcing costs. And this is coming, you have to say, dealing with experience. If If you were making me this question 7, 8 years ago, I would not have been underlining a lot or properly the experience we gained with all these manufacturing volume. So this is very, very important. More you do like everything, but the sensor is even more important.
What you do, what you learn now to optimize the 2 variable of performance and cost.
Thank you very much.
Thank you, Andrew. Next question please.
Your next question comes from Matt Ramsay from Cowen. Please go ahead.
Yes. Thank you very much. Good afternoon and good morning everybody. Vanessa, thank you for the presentation. I have I guess one question for you on the business and then sort of a bigger picture question for Jean Marc.
On the business, I noticed in the slides, you called out, I think, 200 different wins for the time of flight sensor business. And then you mentioned a number of different product categories for the wireless charging business from, I guess, hearing aids and earbuds all the way up to really high smartphones. For those 2 product categories together, how would you characterize the customer concentration of revenue today versus what potentially in your pipeline going
So for the time of flight and for the wireless charging, how many customer we address? Where we address basically you can find our product while we're charging as well as optical sensing solution in big customer as well as small customers. Here, in the chart that we have seen, we were mentioning specifically some, product in the flight sense here. We were was talking about the Samsung. But I can tell you that there are other customers that are using our time of flight as well as the wireless charging, either in the low power range or in high power range that are going from a small scale to big scale.
Really, I have to say that, we are improving a lot. Our presence in the mass market, we this wireless solution and also with time of flight. I cannot be more specific because of confidentiality, but there are really a lot of new application our time of flight. One of these, I just got a few minutes ago. It's pretty much interesting.
You will see soon on the market.
Thanks. I appreciate that. Jean Marc, on sort of a bigger picture question that your company has a really established footprint in microcontrollers and as a number of analog sensors to handle sort of both sides of the the A to D transfer of data collection at the edge. Our team spent a lot of time around the edge computing market and both on the server side and on the client side. I wonder how you think about this strategically, the evolution of the Edge as a business driver the company across the divisions going forward?
Well, the strategy at the edge, I think we'll follow various direction, okay, more one obvious direction, computing power increase. It is clear that we have to find the way to, let's say, continue to improve the computing power, but not at the detriment of the power consumption. So it is clear that the famous trade off PPE, so power computing power, power consumption and area of the chips, okay, which was basically the key driver of smartphone would be exactly the same for IoT and what is happening at the edge. That's the reason why, here, at a certain moment, we do believe that, for sure, we will have a traditional architecture, okay, either a very powerful microcontroller or you will have some architecture with let's say, kind of standard microprocessor with a memory out, okay, which is the architecture, okay, of the smartphone, but for sure, much less, much less complex. Long term, clearly, we could see, happening, some new architecture, at the edge, which will really solve this equation between more computing but less power consumption.
But more, we have clear ideas, but as it is this, this at level of pure innovation and R and D, okay, we do not communicate on it. We will communicate timely, but we are in our type of innovation, this kind of architecture. More than definitively, why more computing power because the data that will be processed and specification request of this kind of device to be a self managed and to avoid to sense, in the network and to the cloud useless data would be more and more important. And that's the reason why for either values of interoperability or, let's say, to be self managed, artificial intelligence at the edge will be, will be monitoring. More any year.
Again, either it will be compatible with a microcontroller, architecture encompassing some hardware accelerator, okay, to be capable to process a complex neural network and complex data flow, or you will have, okay, some, architecture with some kind of a standard microprocessor and later on, okay, a new innovation. Well, the 2nd big axis, that's okay. We will follow on the, on Hyatt or edge device, of course, it is connectivity. And, and here, we will need to have, the full set of connectivity, indoor or door. And, definitively, the connectivity related to the 5 g network.
And year, I have to say immediately that the company's strategy, of course, will be to enable our own embedded processing solution with adequate connectivity for the network. So intercut ELCM or narrowband IoT. But ST won't as well, to capture the value of this kind of device, also be ready to offer a front end module, RF front end module, in order, okay, to be present in the full architecture and the full bit of material of this kind of device. So as a takeaway, our strategy, for ST will be, okay, to have the computing power of our microcontroller controller or moving by step, okay, to standard microprocessor and later on in new kind of architecture, embed some artificial intelligence inside this device, either putting hardware accelerator in our microcontroller but later on, again, moving to standard microprocessor or moving to new architecture. And in parallel to offer the full set let's say, of a critical device, connectivity, but for 10 module as well, but it is abuse.
That to offer a full set of, let's say, a reference design device, sensors are very important I will not come back at the presentation of my friend, Velindetor and Analog as well.
Thank you very much. Next question please.
The next question comes from Sandeep Deshpande from JP Morgan. Please go ahead.
My first question is regarding under screen sensors, I mean, whether it is ambient light or whether it your proximity sensors or your detector, so the SPADs. I mean, are you able to now make on this screen, because many of the phone makers don't want to have a notch on the phone. That's my first and I have a quick follow-up.
Thank you for this question. Yes, we are working on, put to put, let's say, the sensor under the screen. In a way that the eyes of the person or the user are not disturbed. And we are our plan is to put on the screen the different kind of sensors we make. So either ambient light sensors or that sensors I think we will, let's say, the market trend is clear, and I think we have also a good roadmap to go there.
Thank you.
So is this going to happen? Sorry, just a follow-up on that. Is this going to happen soon or is this going to take some time?
Let me give you some surprise. So they're white.
You have some deep occasion, Marcus speaking, It's clear what you're raising is a mega trend in the consumer device. Where in fact, okay, you will, you will have always to derate 2 things. The consumer experience, and on one side and on another side, for sure, the continuous improvement of the performance of an application. So of course, if we take the sales recognition, okay, we know that the best solution, okay, is a structured light. But another side, okay, as a consumer experience, as you said, request to have no notch on the screen.
But short term is difficult to converge, for sure, okay, the challenge of of the technology and product and solution will be, and it is now a megatrend valid in each application to, converge this consumer experience and technology, intrinsic behavior and performance. But here, okay, of course, we cannot comment more because, then we will go to a customer secret and, and, you know, this is something we must not disclose.
Thank you, Jean Marc. I mean, just quick follow-up on the sensor business. I mean, one of the big opportunities in the sensor market is IoT. And as this market develops over the next few years and decades. I mean, what is ST doing in this space associated with the sensor, specifically on microcontrollers?
You're working very, I mean, you're doing very well. Maybe we could just talk about sensors?
Let's say, for sure, IoT is very important drivers I wouldn't say for this decade adoption of the sensor, no, because when you're talking about IoT, you talk about usually a stands or note that there's some local processing the communication, the connectivity that can be realized and without wires. Today, the IoT is there are different applications of IoT, but the one that we see that are taking off with some volumes that start to be interesting. The other one that I was mentioning in the presentation, it means asset tracking you want to monitor where the goods are, where the assets are on the supply chain. Number 2, predictive maintenance, you want to minimize the downtime of the equipment. And this goes hand in hand with re uptime of monitoring and then the metering.
What we see is that with the sensor and the remote connection, metering electricity, but also gas and waters, it's a real benefit. So when we're talking about, I would say this way, we have, we see several application in the field of industrial IoT that are taking off in the other portfolio, like is a macro saying, the microcontrollers, the connectivity and the sensors of a good solution to the customers without forgetting also let's say, all the algorithm that we can plug in and all of the AI hit at the hedge or at the hedge of the hedges that we are proposing to dollars.
The next question comes from David Mulholl from UBS. Please go ahead.
Hi. I just wanted to follow-up on your largest customer. I know there's only so much you can say But in terms of your confidence in the engagement that you have, how long that will kind of carry on for the products that you do have embedded on what you expect in terms of the content trends for the next couple of years, a fairly key customer of years?
Well, yeah, again, I think, what I would like to share with you Of course, okay, in January, you will see the weight of this customer with ST. And clearly, we performed well during the past few years achieving really remarkable growth, okay, with, with this important customer. What is very important for us is, is a decision with the resilience, the resilience with the customer and the resilience with the customer is, let's say, all, diversify our, your offer with this customer, not only is some sensor, like, let's say structured light or, or, or, which is superb definitively. But, okay, to have also the capability and I guess here, our strategy is really clear, custom design solution indoptical sensing solution in Secure Solution and, in a custom analog, but we would like to leverage a lot our general product portfolio, mainly, let's say, MCUs, definitively, but names as well. And power.
And I would like to say that no, what is much more important for us than the specific question you raise to me is a more resilient with this customer and the diversification. And I would like to say that, today we have really achieved a nice coverage with our full portfolio with this customer. And, and not only, one great success that, okay, of course, we will continue to focus and continue to improve and with a strong determination, to remain a preferred partner, okay, on the front side of the phone. But, okay, in a very, very good balance way leveraging, okay, the full set of our IP and portfolio. So this is where we are today.
And this is what we intend to continue to do in the future.
That's great. And just one a quick follow-up. In terms of the discussion of Huawei's planning to sell off the owner brand, I think when we last spoke about the topic, you said you'd very much continued kind of some level of engagement even though you couldn't supply to them. So if something was to be completed, is it fair to assume you could fairly quickly ramp up selling again, assuming the regulations and the laws would allow such a such an issue to pick up on. If you could possibly update us on whether you've had any licenses approved to ship to Fala as well, because there's been some, where we've seen announcements that they've possibly been approved.
Well, since Wednesday. Nothing happened, unfortunately, okay. So we have not received, okay, any feedback about the license demand to the USA administration. Of course, okay. We have an acknowledged honor, let's say, set up and let's say, business as usual, our sales and marketing is already in touch, okay, with, with them.
And certainly, at a certain moment, I will be a mindset. Moreover, it's important, okay, you acknowledge that SP is a fully compliant, okay, with what has been set up by the VIS. So U. S. Administration, And clearly, since, mid September, okay, we stopped any activities, okay, so waffling, waffling move, waffling out, packaging and package out.
So clearly, whatever will happen in, let's say, in the near future, either, through license, clearance or, let's say, owner distribution, yes, it will take a lead time, okay, before to restart. And certainly, okay, you are quite well aware that today, okay, the semiconductor supply chain, it's a field of product and technology addressing the personal electronics. It's quite pretty loaded. So lead time are not, let's say, it almost came, but they are quite, let's say, not close to the guarantee with second time. So it will take time, okay.
Whatever, again, is licensed clearance for Huawei or a new opportunity with, with an when it will be clearly, let's say, for the year, it will take time, okay, for the company to to ramp again, because, okay, we have already many commitments, okay, with the, with other customers. We will do our best again to support our customer taking into account the credit legacy we had with Wayway and I see year.
The next question comes from Stephan Hori from ODDO BHF. Please go ahead.
I have a quite general question. If you can update us on the difference in profitability between the sensor and main business and the Analog business on the other side. And if there is upside to the current margins, which are still at a pretty high level, sorry. And linked to that, can you update us on the manufacturing capacity that you have for sensors at the moment and if you have plan to expand them?
So if you don't mind, what is related to margin, I will ask Lorenzo to answer. More in there, okay, Venetu will comment about manufacturing.
In term of margin, a good afternoon and good morning to everybody on speaking. In terms of margin, when you see the margin of our AMS group, but now let's say after 9 months, this year, we are be we are in that mid teens that has operating margins. And then I should qualify, let's say, between the various components. I would say that they are quite similar in term for the various different fraud percent. We have a substantially, let's say, we are drawing book margin on our MEMSA.
It's a bit higher than the average. And while, let's say, when I look at, let's say, analog substantially in the average and imaging slightly, there is slightly below the average. So at the end, in reality, I would say that our quite contributing in a similar way to the operating margin of the overall group. The other question was about capacity manufacturing. Yes.
Yes. But maybe even Eric, you can comment on that.
Yes. I think that, I mean, to give Matish here, the capacity is important. We are installing the capacity. We installed it. We are installing the capacity that is needed to address the customer So we are looking at both dimensions of the capacity, both in the front end and in the back end.
So we are, as I said, we want to grow our market shares. We have some solid leadership position and investing in manufacturing to enhance the tool to expand the capacity is key for us. Okay. Thank you very much.
Thank you, Stephane. We have scanned for one last question.
The last question comes from Jerome Rommel from Exane. Please go ahead.
Yes, good afternoon. Two questions. The third one, Belito, I think at the last capital Market Day, you gave a roadmap for the pixel in terms of pixel density for your camera and you were targeting 1 megapixel So maybe can you update us on your run math? Was it VGA grade and 1 megapixel for the time of flight? The second question I have is, I'm curious to understand, if we should think about the analog business annual, men's and central business and maybe also the microcontroller business, are the cross selling business?
And do you think in terms of attach rate each time you sell a sensor, do you sell a ACDC converter, another digital converter? Do you sell a microcontroller together? So how does it work within SG And Micro for the cross selling of all these products?
Ruben. Okay. I think, no, I think that in terms of Let me say, number of pixel of the camera, we have in the pipeline, different kind of product because it depends if it is about, for example, in automotive, for ink, have been monitoring. In this case, you need, let me say for sure cameras entering the range of 2, 2.5 megapixel. And this is, for example, automotive application.
When it comes to other application, for 3 d sensing. Then the number of picks that you need, it is lower. I think what is important, Jerome, is to look if you wanted the pixel size, because then we can make different metrics like recastinel is interested in So one point I would like to underline is that 1 year ago, we were not yet in production with spud. This year, we are in production with 14 millimeters spud direct time of flight, okay? So this is a big achievement.
When we talk about indirect time of flight, we are also at 4.6 Micron, as we committed last year. This is a pixel size. And when we talk about global charters, we are at 2.6 migrating to 2.2 micron. So then for sure, the customer is asking us to integrate or to make it to arrange picture in a different form factor depending on the application that we can get. So this is about the first question.
Yes, maybe you can answer, when we are spoken about, let's say, custom solution. And me, I will answer, mass market.
I think that your question, it's clear that I would say when in Brazil with customers, there are some situation that depends on the customer you are dealing with. Because there are some customer aware that there is a good attraction of one product versus the others. There are some other solution where some other cases where, let me say, they are more interested in one component versus the other clearly, clearly, the if we look at the portfolio of AMS, the wide range wide portfolio sensors that we can offer. It's a good book for also for other product. This year, we did really big progress in our proposal for our reference design that continued a bit of everything.
And they are all connected to the cloud. Last year, And remember, I anticipated you the sensor tied up box with all different components. Now this is a reality. And it's a way
to promote
the full set of products And for the mass market, it is a really a good test vehicle and a good reference design. Maybe market, is it? [SPEAKER
PIERRE YVES LESAICHERRE:] No, and gerald, more clearly for the mass market, you know, that for us, the distributors are channel are very, very important in Asia and Europe and America as well. It is clear that one important process with them is what we call the demand creation. And with the demand creation, we are very attentive to monitor what you mentioned okay, what we call it, 1+6, it is clear that, the ambition we have with a distributor, and we have KPI, okay, clearly monitoring what we are, what they are doing and what they are bringing to us is each time we address an application example in IoT, we monitor exactly, with either the MCU as the SM32 as a core product or the sensor or the core product, okay, the other compartment attached okay, to this solution. But, you know, I cannot say more because, this Kapia, okay, is not something we report publicly. Because it is a manufacturing, let's say, tools we use to let's say, crack and monitor the efficiency of the demand creation process with our distributor.
That you are perfectly right. Okay. We are leveraging, let's say, our RCM32 ecosystem which is sometime is, is, let's say, the main driver of the 1+6 program or sometime, it is immense. Okay, with some sort of computing, which is the key driver in some time, okay, it is a it is a other device. Yes, it is clearly in our DNA, okay, to work like that and to monitor our key partners in this way.
So this concludes our presentation of today. As a reminder, the first last session of our 2020 Capital Market Day is scheduled on December 9th with the overall strategic update. Thank you for your attention and entrust in SD Microelectronics and stay safe.