Sony will replace Lumentum (design) / Win Semi (production) as the exclusive ToF VCSEL (Time-of-Flight , Vertical-Cavity Surface-Emitting Laser) supplier for iPhone 15 Pro and Pro Max. Lumentum/Win Semi will face long-term structural risks in the VCSEL market.

• The critical design of Sony's ToF VCSEL solution is integrating VCSEL & driver IC, which can reduce power consumption (beneficial for battery life) or provide better ToF performance under same power consumption (beneficial for camera & potential AR applications).

• Lumentum/Win Semi's iPhone Face ID VCSEL market share will decrease from 50% in the iPhone 14 series to 30-40% in the iPhone 15 series due to Sony and II-VI's increased supply ratio.

• Losing significant iPhone VCSEL orders means Lumentum/Win Semi will face structural risks due to Sony's technological advantages, as Sony will likely continue taking Lumentum/Win Semi's orders from other brand customers.

Earlier today we posted another Ming-Chi Kuo report titled "Apple analyst Ming-Chi Kuo weighs in on Apple's upcoming XR Headset and clarifies Luxshare's involvement in designing 2nd-Gen Headsets."