Good afternoon or good morning, everyone. Thank you for joining what is now the third session of our Capital Market Day 2020, the presentation of our Analog, MEMS and Sensors Group, AMS. Jean-Marc Chéry, ST's President and Chief Executive Officer, will start with introductory comments. Benedetto Vigna, our President in charge of AMS, will go through the presentation of his group. It will be followed by a Q&A session where Jean-Marc and Benedetto will be joined once again by Lorenzo Grandi, 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 all the Q&A using audio only. As usual, a few housekeeping items before we start.
This live webcast and presentation materials can be accessed on ST'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 results 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&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 Sensors 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 first nine months compared with the same period last year. This despite the pandemic that hit the industrial market very hard. Among our three product groups, AMS is the broadest exposure to all the four end markets we address. Since we covered the automotive market dynamics extensively a couple of weeks ago, let me provide you with a short overview of the other three 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 focus areas for 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 product families. In the Americas and Europe, recovery is still ongoing, with point of sale up sequentially. Here also, inventory is back to healthy levels across all product 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, and game consoles. This was driven in part by the stay-at-home 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 Benedetto's presentation, you will see a number of technology, product, and application-related innovations supporting the mega trends 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 see how AMS is well-positioned for balanced growth in both distribution and with key customers. Thanks to first, its industry's broadest portfolio in MEMS and optical sensing solutions. Second, a differentiated and competitive portfolio of application-specific analog products complemented by general-purpose analog, addressing all ST's target markets. Third, a diversification strategy across customers and end markets enabling profitable growth. Now let me hand over to Benedetto. Thank you.
Thank you, Jean-Marc. Good afternoon and good morning to everyone, and welcome to this presentation on the AMS, the Analog, MEMS and Sensors 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. One year has gone by since the last time we met, and I'm happy to confirm to 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 with continuous improvement in realizing and enhancing our unique value proposition, fully aligned with ST's strategic 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. Second, 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. Third, our product strategy to match the growing needs of each of our end markets. Let's start with the financial. AMS is made up of a team spread throughout the world, and it represents about one-third of ST revenues. Despite the pandemic, I'm pleased to confirm that the 2020 business trend of AMS is positive. In fact, the first nine months of 2020, AMS revenues were 12% higher than year-over-year. In this period, we billed around $2.5 billion, out of which $1.5 billion in MEMS and sensors and $1 billion in analog.
In analog, we grew less than in MEMS & sensors. Why? On general-purpose analog product, we experienced the negative impact of the pandemic on our mass market business. Our growth is driven by two underlying trends that are fundamental to the three mega trends that ST is focused on. The first is the sensorization 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 five years, our strategic direction has been consistent. Product-wise, we have two pillars, analog and MEMS & sensors. In analog, we address two kind of products. First, application-specific product, mostly driven by key customers. Second, general-purpose product for the mass market. These are the glue of any electronic system.
We have a special focus on signal conditioning, like op-amp and voltage reference, and on power management, like DC-DC and AC-DC converter. In MEMS & Sensors, we offer both MEMS sensor and actuators and optical sensing solution. Market-wise, we address all the four ST end market. We have a strategic focus on industrial and automotive with our sensor, 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 peripheral, we are very selective in our approach with our portfolio of sensor microactuators, as well as power management for servers and storage devices. With all these 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 two 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 the ADAS system in car today, as well as autonomous car of the future. 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, pressure, proximity, and ambient light will reach the digital world for data processing without the need for a keyboard, mice, or touch display. In the past 15 years, we sold more than 5 billion MEMS actuators and more than 20 billion sensors, both MEMS and optical sensing solution.
We are by far the world leader in time-of-flight sensor and motion MEMS for personal electronics and automotive telematics. We started from personal electronics that still represent the largest market for us, and we then expanded into the other market. Five years ago, we started our diversification journey along four 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 two solid leadership position. Number one in motion MEMS for personal electronics and automotive telematics with 50% market share, and number one in micromachined actuators for inkjet printing. Underlining this MEMS success, we have unique and flexible differentiated technologies such as ThELMA 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 driving application. We are determined to keep this number one position supported by the development of leading-edge product such as accelerometers, six-axis, inclinometer, and pressure sensors we announced earlier this year. Our strategy is to continue to focus on the development of ultra-low power and higher accuracy sensors. For this, we are developing innovative sensing architectures, and we are embedding our latest generation machine learning core. In-sensor computing 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 six-axis announced 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. 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 two axes. First, maintain our number one position in time-of-flight. Second, diversify our technology, product, and 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 structured light, direct/indirect time of flight, and stereoscopic approach. We made significant progress in global shutter, fast photodiode, and SPAD technologies.
Today, we have a 40 nanometer SPAD pixel for direct time of flight in production, and we continue to invest in SPAD 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 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 FlightSense family and ambient light sensors. In FlightSense 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 a win with a major OEM in the field of personal electronics. Here, we displaced strong competition. After technology, after product, the customer side. Here, we started to deliver our multi-zone 40 nanometers SPAD product to Samsung. We've been able to differentiate from major competitors with this unique product. It offers high performance and high level of integration. This recent success is a big step forward in the world-facing application. It complements very well our leadership in the Android market with SPAD for laser-assist autofocus application, and in laptop with our presence sensors. Today, personal electronics remains still the main market for optical sensing solution. Diversification takes time, does not come so simple, but w e are on the right track.
Indeed, you can find our time-of-flight product in PC for presence detection, and next year, you will find our global shutter technology in the car for in-cabin monitoring. 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 accelerometer, gyroscope, and LiDAR, but also in-cabin infrared sensors. In the past years, AMS has made good progress in automotive. First, we maintained our number one position in motion MEMS 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 one major OEM. We also see good perspective for future growth because we are not competing with our customers.
We do not sell module with sensors like some MEMS competitors do. Second, we believe that LiDAR will become more and more important for ADAS and autonomous vehicle system. Different technical solution will be used in the market. That's clear, so o n one side, we announced last April a customer partnership with LeddarTech to develop a miniaturized, ultra-low-power LiDAR using scanning MEMS mirror. On the other side, we are developing solution based on our latest generation of FlightSense technology using SPAD in 40 nanometers. LiDAR will enrich the information flow in the car to the advanced processing unit, such as those developed by our colleague in Automotive and Discrete Group. Third, we won a business for a driver monitoring system application, supporting legislation in various countries, especially in Europe from 2022 onward. Our global shutter sensor offer high dynamic range and the low noise required by in-cabin 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 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 LiDAR, are also very important for industrial application. Can you imagine the benefit sensors 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 are words that are in our daily jargon. A few years ago, these were just words known only in academic circles. Many papers, zero 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 meter critical resources, such as electricity, water, and gas. For all these application, 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 progress with technologies like Bluetooth Low Energy, sub-gigahertz radio, PLC, KNX, and IO-Link. We also start to see sensors used for structural health monitoring. Several years ago, some universities start to use our accelerometer for vibration monitoring of the Milan football stadium. At that time, power consumption was way too high. Now, thanks to ultra-low power consumption, we see sensor mounted on elevators, windmills, and on critical infrastructure such as bridges, dams, and tunnels. This is not all.
Industrial application can also benefit from the adoption of new technologies originally conceived for entertainment and gaming. I'm talking about augmented reality technology, designed to merge the digital with the analog world. One key enabler is small, high-resolution, and low-power MEMS mirrors. These tiny silicon devices can pave 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 piezoelectric mirrors. Together with four partners, we also launched the LaSAR Alliance to shorten time to market for augmented reality eyewear. You can find already our MEMS mirror in two product on the market, HoloLens from Microsoft and RealSense from Intel. Two product with two different use cases.
Our mirror in Microsoft HoloLens 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 he has to install in his 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 face-to-face situation, for sure, much better than the current one. Our mirror will enable new application in the industrial world by adding the third dimension to the digital world of today. Okay, so far we talked in detail about MEMS and sensors. We talked about the product, the technology, the market. Now, let's move to the second pillar of this group, the analog. 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 partner, 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 first nine months of this year, we experienced the revenue drop year-over-year. We are definitely on a positive trend in the last quarter. This is even more true for our application-specific product. Here, all of the key business programs from May 2019 are well on track. In addition, I would like to highlight three new product families we recently announced. First, the MasterGaN product family already in production, allowing to shrink the size and weight of power adapter for PC and smartphone by a factor of four.
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 want to play a leading role here. Second, power management chips for our STM32 microprocessors. These devices offer high-efficiency DC-DC converters to power the MPU with a flexible and scalable architecture, optimizing power consumption of the entire system. Third, the family of power management IC for SSD and server. 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 4.0.
Our chips enable higher safety and increase the level of automation in synergy with our broad offering sensors. Attention is often focused on artificial intelligence algorithm required by Industry 4.0, but we should not forget the hardware that enable two important feature of Industry 4.0. First, more distributed control for increased flexibility. Second, 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 sensor as well as wired connectivity like IO-Link and KNX. Now, let's talk about our metering and motion control solution for Industry 4.0. 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 STSPIN and STDRIVE 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 hundred watt to tens of kilowatt. Depending on the customer needs, we can pack in the same package, one or more dice, such as the drivers, the controller, and the high-power output stage, either in silicon or in gallium nitride. An important proof point for us. In the last year, our rate of innovation increased substantially, 25%. 1/4 of industrial sales in the first nine months of 2020 came from product less than two years old. In the factories of the future, 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, the high voltage and the low voltage section of the system will come closer and closer. Safety and protection are becoming more important. In this direction, one technology play an important role. It's the galvanic isolation. Galvanic isolation enable 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 six kilovolt. 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. That's not all. Before closing this section on analog application-specific product, let's talk about an important growth driver, wireless charging.
All the key business programs for wireless charging are in production as we planned. Here we replace two 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 watts for wearable and hearable devices, to more than 40 W for high performances 5G smartphone. That's not all. We continue to develop efficient wireless charging solution up to 100 W for both transmit and 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 first nine 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. This is thanks to the three factors. First, our industry broadest portfolio, from MEMS to optical sensing solution, which we are rapidly expanding through diversification. Second, 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 and computer peripheral. Third, our distinctive product innovation DNA with the double helix of differentiated technologies and application know-how and focus, thanks to a strong customer intimacy. Thank you so much.
Thank you, Benedetto. We are now ready to take your questions.
The first question comes from Achal Sultania from Credit Suisse. Please go ahead.
Hi. Good afternoon. Thanks for the question. Just trying to understand, on your 3D portfolio, you mentioned you're working on various different technologies, be it structured light, 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.
Benedetto will take your question. Thank you.
Thank you so much for your question. I think that today, let me say, you can find several solutions from a technological point of view on the market, but the one that is providing the best resolution in terms of, let's say, pixel size and also in terms of accuracy, is by far the structured light. The structured light, 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 farther range.
Just trying to understand, are there any work going around time-of-flight to make it as good as structured light for resolution as well? Or is it something that probably will take much longer than maybe the next year or two?
I think that, let's put in this way. The structured light has the big advantage of being used in higher volume. Everyone in the industry, all the players in the industry, gained more experience how to cope and how to achieve higher resolution. The indirect time or direct time-of-flight cannot count on the same amount of volume of a phone with a structured light. If you go to see the algorithm behind, theoretically, they can reach more or less the same limit. On one side, there is much more manufacturing experience that is helping everyone, all the players to push much farther the structured light in terms of resolution and accuracy.
Now, in the future, let's say, other solution can appear, and that's 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, t hank you. Maybe one follow-up on your partnerships with customers in China. We understand that Huawei was obviously one of the key customers 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? You think that there is still room for that partnership to evolve further with those three vendors in China?
I think that we need to remember a little bit what is AMS, Analog, MEMS and Sensors. We are working with Chinese players since many years. Okay? With some of the one you mentioned, we really started when they were very, very small. Let me say in this way, we are addressing, with our broad range portfolio, with Analog product, with optical sensing, and with MEMS, we are addressing all the Chinese players.
Okay, t hank you.
Thank you.
Next question, please.
The next question comes from Andrew Gardiner from Barclays. Please go ahead.
Good afternoon. Thank you for taking my question. Benedetto, if I could ask one on the topic of ambient light sensing. You guys have been talking about this for a year or two now in terms of it being a target market for you. You mentioned the one win with a major OEM in personal 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 displaced strong competition. What was it about your product, your design, or your technology in particular that you think caused you to win that? Finally, how are you seeing other opportunities? 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 one year ago in London that we were working on ambient light sensors, and we were going to make an inroad with this product. Indeed, as I said before, we are on track with our plan. Next year you can buy some product with our ambient light sensors. 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. 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. 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. The beauty is that by having different kind of sensors, we can also think combination of different sensors together with ambient light.
Thank you.
Okay.
Yeah, you have a follow-up, Andrew?
Just on that last point, you're saying the different types of sensors you have within your portfolio allow you to optimize the solutions. Is that you're suggesting both in terms of a standalone ambient light or MEMS, and then you went on to say, "Well, you can combine them into a module depending on what the customer needs." Just on the first point, what is it, in terms of the sensor know-how more broadly that is allowing you to optimize? Can you just give us a bit more detail there?
I think I can recall the numbers I mentioned in the presentation. We have put, let's say, on the market, more than 20 billion sensors. Sensors are a little bit different from standard semiconductors. When you manage in high volume the production of sensor, you discover a lot of features that are important, both on the performance side and also on the manufacturing side. With this experience that we gained with all these sensors, with all the sensor, let me say, in quantity, but also in variety, we have been able to optimize the product in performances and also in cost. This is coming, I have to say, really with experience. If you were making me this question seven, eight years ago, I would not have been underlining a lot or properly the experience we gained with all this manufacturing volume.
This is very, very important. More you do, like everything, but in sensor is even more important. More you do, more you learn how to optimize the two variables of performance and cost.
Thank you very much.
Thank you, Andrew. Next question, please.
The next question comes from Matt Ramsay, from Cowen. Please go ahead.
Yes, thank you very much. Good afternoon and good morning, everybody. Benedetto, thank you for the presentation. I have, I guess, one question for you on the business, and t hen 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. 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-end smartphones. For those two product categories together, how would you characterize the customer concentration of revenue today versus what's potentially in your pipeline going forward? Thank you. Then I'll just follow up with Jean-Marc.
Okay. Yeah, I repeat. For the optical sensing solution, for the time of flight and for the wireless charging, how many customer we address? Well, we address basically, you can find our product, the wireless charging, as well as optical sensing solution, in big customer as well as in small customers. Here, in the chart that you have seen, we were mentioning specifically some product in the FlightSense. Here, I was talking about the Samsung. 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 small scale to big scale. Really, I have to say that we are improving a lot our presence in the mass market with this wireless solution and also with time of flight.
I cannot be more specific because of confidentiality, but t here are rarely a lot of new application of our time of flight. One of these I just got a few minutes ago is pretty much interesting. You will see soon on the market.
Thanks, I appreciate that. Jean-Marc, on sort of a bigger picture question, your company has a really established footprint in microcontrollers and has a number of analog sensors to handle both sides of the A-to-D transfer of data collection at the edge. Our team's 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 for the company across the divisions going forward. Thank you.
The strategy at the edge, I think will follow various direction. One obvious direction is 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. It is clear that the famous trade-off, PPA, so power, computing power consumption, and area of the chips, okay, which was basically the key driver of smartphone, will 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, either a very powerful microcontroller, or you will have some architecture with, let's say, a kind of standard microprocessor with a memory out, okay, which is the architecture of the smartphone. For sure, 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. Well, we have clear ideas, but as it is at level of pure innovation and R&D, okay, we do not communicate on it. We will communicate timely, we have in our pipe of innovation, this kind of architecture. Definitively, why more computing power? The data that will be processed and the specification request of this kind of device to be self-managed and to avoid to send in the network into the cloud, useless data will be more and more important. 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 mandatory.
Here, 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. You will have, okay, some architecture with some kind of standard microprocessor and later on, okay, a new innovation. The second big axis that, okay, we will follow on IoT or edge device, of course, it is connectivity. Here, we will need to have the full set of connectivity, indoor, outdoor, and definitively, the connectivity related to the 5G network. Here, I have to say immediately that the company strategy, of course, will be to enable our embedded processing solution with adequate connectivity for the network, e ither CAT-M or Narrowband IoT.
ST wants 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 to be present in the full architecture and the full bill of material of this kind of a device. As a takeaway, our strategy for ST will be to enhance the computing power of our microcontroller or moving by step to standard microprocessor, and later on, a 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. In parallel, to offer the full set, let's say, of critical device connectivity, but front-end module as well.
Well, it is obvious that to offer a full set of, let's say, reference design device, sensor are very important, but I will not come back on the presentation of my friend Benedetto and analog as well.
Thank you so much for the thoughts.
Thank you. Next question, please.
The next question comes from Sandeep Deshpande from JP Morgan. Please go ahead.
Yeah. Hi, t hanks for letting me on. My first question is regarding under screen sensors. I mean, whether it is ambient light or whether it is your proximity sensors or your detector, so the SPADs. Are you able to now make under screen? 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 putting the sensor under the screen in a way that the eyes of the person or the user are not disturbed. Our plan is to put under screen, the different kind of sensor we make. Either ambient light sensors or depth sensors. The market trend is clear, and I think we have also a good roadmap to go there. Thank you.
Is this going to happen? Sorry, just to follow up on that, is this going to happen soon or is this going to take some time?
Let me give some surprise. Otherwise, next time.
No. You heard Sandeep. Okay, Jean-Marc speaking.
Yeah. Hi.
It is clear what you are raising is a mega trend in the consumer device, where in fact, okay, you will have always to trade two things. The consumer experience on one side, and on another side, for sure, the continuous improvement of the performance of an application. Of course, if we take the face recognition, okay, we know that the best solution, okay, is a structured light. On another side, okay, the consumer experience, as you said, request to have no notch on the screen. Well, short-term is difficult to converge. For sure, okay, the challenge of the technology and product and solution will be, and it is now a mega trend, valid in each application to converge this consumer experience and technology intrinsic behavior and performance.
Here, okay, of course, we cannot comment more because then we will go to customer secret, and you know this is something we must not disclose.
Thank you, Jean-Marc. Just a quick follow-up on the sensor business. One of the big opportunities in the sensor market is IoT, and as this market develops over the next few years and decade, what is ST doing in this space associated with sensors specifically? Clearly, on microcontrollers, you're doing very well. Maybe we could just talk about sensors.
Let's say, for sure, IoT is very important drivers, I would say, for this decade, adoption of the sensor, no? When you talk about IoT, you talk about, usually, a sensor node that has some local processing with a communication, that connectivity that can be with wire and without wires. Today, there are different application of IoT. The one that we see that are taking off with some volumes that start to be interesting are the 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 equipment, and this goes hand in hand with real-time monitoring. The metering.
What we see is that with the sensor and the remote connection, metering electricity, but also gas and waters, is a real benefit. When we talk about, I would say in this way, we see several applications in the field of industrial IoT that are taking off and they are our portfolio. Like Jean-Marc was saying, the microcontrollers, the connectivity and the sensors offer a good solution to the customers. Without forgetting also, let's say, all the algorithms that we can plug in and all of the AI at the edge or at the edge of the edge, that we are proposing to customers.
Thank you so much.
Thank you, Sandeep. Next question, please.
The next question comes from David Mulholland from UBS. Please go ahead.
Hi. I just wanted to follow up obviously on your largest customer. I know there's only so much you can say. 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, and what you expect in terms of the content trends for the next couple of years at that fairly key customer of yours.
Well, here 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. Clearly, we perform well during the past few years, achieving a really remarkable growth, okay, with this important customer. What is very important for us is definitively the resilience. The resilience with the customer. The resilience with the customer is, let's say, how diversified your offer with this customer. Not only some sensor like, let's say, structured light, which is superb definitively, but okay, to have also the capability, and I guess here our strategy is really clear. Custom design solution in optical sensing solution, in secure solution, and in a custom analog. We would like to leverage a lot our general product portfolio, mainly, let's say, MCUs definitively, but MEMS as well, and power.
I would like to say that now, what is much more important for us than the specific question you raised to me, is our resilience with this customer and the diversification. I would like to say that, today we have really achieved a nice coverage with our full portfolio with this customer. 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. Okay, in a very, very good balanced way, leveraging, okay, the full set of our IP and portfolio. This is where we are today, and this is what we intend to continue to do in the future.
That's great. Just one quick follow-up. In terms of the discussion of Huawei's planning to sell off the Honor brand, I think when we last spoke about the topic, you said you'd very much continue some level of engagement, even though you couldn't supply to them. 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 an initiative to kick on? If you could possibly update us on whether you've had any licenses approved to ship to Huawei as well, because there's been some, where we've seen announcements that they've possibly been approved.
Well, since Wednesday.
Wednesday.
Nothing happened, unfortunately. We have not received any feedback about the license demand to the U.S.A. administration. We have acknowledged Honor set up and business as usual. Our sales and marketing is already in touch with them and certainly, at a certain moment, I will be myself. It's important you acknowledge that ST is fully compliant with what has been set up by the BIS, so U.S. administration. Since mid-September, we stop any activities. Wafer in, wafer move, wafer out, packaging, and package out. Whatever will happen in the near future, either through license clearance or on our discussion. It will take a lead time before to restart.
Certainly, you are quite well aware that today, the semiconductor supply chain, in the field of product and technology addressing the personal electronics, it's quite pretty loaded. Lead time are not, let's say, enormous. But they are quite, let's say, not close to the theoretical cycle time. It will take time. Whatever, again, is license clearance for Huawei or a new opportunity with Honor, when will be clearly, let's say, for real, it will take time for the company to ramp again. We have already many commitments with other customers. We will do our best, again, to support our customer, taking into account the great legacy we had with Huawei and IC.
That's great, t hanks very much.
Thank you. Thank you, David. Next question, please.
The next question comes from Stéphane Houri from ODDO BHF. Please go ahead.
Yes, hello. Good afternoon. I have a quite general question, if you can update us on the difference in profitability between the sensor and MEMS business and the analog business on the other side. If there is upside to the current margins, which are still at a pretty high level, sorry. Linked to that, can you update us on the manufacturing capacity that you have for sensors at the moment, and if you have planned to expand them? Thank you.
If you don't mind, what is related to margin, I will ask Lorenzo to answer. Okay, Benedetto will comment about manufacturing.
Good afternoon and good morning to everybody, Lorenzo speaking. In terms of margin, when you see the margin of our AMS group. Now, let's say, after nine months this year, we are in mid-teens as operating margins. I should qualify, let's say, between the various components. I would say that They are quite similar for the various different products. We have substantially, let's say, we are drawing good margin on our MEMS, a little bit higher than the average. While, let's say, when I look, let's say, analog, they're substantially in the average and imaging very slightly below the average. At the end, in reality, I would say that are quite contributing in a similar way to the operating margin of the overall group. The other question was about capacity.
Manufacturing.
Manufacturing, yes.
Yes. Maybe, Benedetto, you can comment.
Yeah. I think that, to gain market share, the capacity is important. We are installing the capacity that is needed to address the customer needs. We are looking at both dimensions of the capacity, both in the front end and in the back end. As I said, we want to grow our market shares. We have some solid leadership position, and investing in manufacturing to expand the capacity is key for us.
Okay. Thank you very much.
Thank you, Stéphane. We have time for one last question.
The last question comes from Jerome Ramel from Exane. Please go ahead.
Yeah, good afternoon. Two question. The first one, Benedetto, I think, at the last capital market day, you gave a roadmap for the pixel, in term of pixel density for your camera, and you were targeting one megapixel. Maybe can you update us on your roadmap with a VGA grade and one 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 and your MEMS and sensor business and maybe also the microcontroller business, are the cross-selling business, and do you think in term of attach rate, each time you sell a sensor, do you sell an AC-DC converter, analog-to-digital converter? Do you sell a microcontroller together? How does it work within STMicro for the cross-selling of all these products? Thank you.
To Benedetto.
Okay. Thank you, Jerome. No, I think that in terms of, let me say, number of pixels of the camera, we have, in the pipeline, different kind of product because it depends if it is about, for example, in automotive, for in-cabin monitoring. In this case, you need, let me say, for sure, cameras that are in the range of two, 2.5 megapixels. This is, for example, automotive application. When it comes to other application for 3D sensing, then the number of pixels you need, it is lower. I think what is important, Jerome, is to look, if you want, at the pixel size, because then we can make different metrics like the customer is interested in. One point I would like to underline is that one year ago, we were not yet in production with 40 nanometer SPADs.
This year, we are in production with 40 nanometers SPAD, direct time of flight, okay. 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. When we talk about global shutters, we are at 2.6, migrating to 2.2 micron. For sure, the customer is asking us to integrate or to arrange pixel in a different form factor depending on the application they're looking at. This is about the first question.
The other one was.
The one that follows.
Yeah, maybe you can answer when we have spoken about, let's say, custom solution.
Yeah.
Me, I will answer mass market.
Okay. I think that your question, it's clear that, how would I say it? When you deal with customer, there are some situation that it depends on the customer you are dealing with. There are some customer where there is a good traction of one product versus others. There are some other cases where, let me say, they are more interested in one component versus the others. If we look at the portfolio of AMS, the wide range, the wide portfolio of sensors that we can offer is a good hook also for other product. This year, we did a really big progress in our proposal for our reference design that contain a little bit of everything. They are all connected to the cloud. Last year, I remember I anticipated you the SensorTile.box with all different components.
Now, this is a reality, and it's a way to promote the full set of products. For the mass market, this is really a good test vehicle and a good reference design. Maybe Jean-Marc can give his.
Jerome, clearly for the mass market, you know that for us, distributor channel are 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. 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 the distributor, and we have KPI, okay, clearly monitoring what they are doing and what they are bringing to us, is each time we address an application, example an IoT, we monitor exactly, with either the MCU as the STM32 as a core product or the sensor as a core product, okay, the other compartment attach to this solution.
Here I cannot say more because this KPI is not something we report publicly, because it is a marketing tool we use to track and monitor the efficiency of the demand creation process with our distributor. You are perfectly right. We are leveraging our STM32 ecosystem, which is sometimes the main driver of the one plus six program, or sometime it is the MEMS, okay, with some instance of computing, which is the key driver, and sometime it is other device. Yes, it is clearly in our DNA to work like that and to monitor our key partners in this way.
Thank you.
Thank you very much, Jerome. This concludes our presentation of today. As a reminder, the first and last session of our 2020 Capital Market Day is scheduled on December 9th with the overall strategic update. Thank you for your attention and interest in STMicroelectronics, and stay safe.