Sony Corp. is planning to grow its engineering teams as it looks for new business opportunities in growth markets such as the automotive and “internet of things” sectors, Reuters reported Wednesday.

The Japanese firm will allocate some 40 percent of its new engineering hires to its struggling computer chip manufacturing business, which includes its all-important image sensor research unit. Reuters said Sony will hire 320 new engineers in 2019 and 2020 in an effort to seize a bigger piece of what is a very profitable image sensor technology business.

Currently, image sensors account for around 15 percent of Sony’s annual profits. However, those profits are expected to decline from weakened global demand for smartphones that rely on Sony’s image sensors, Reuters said.

That’s why Sony needs to diversify its image sensors beyond smartphones into fields such as IoT and connected cars, the report said. Those markets are expected to grow significantly in the next few years, enabled by the rollout of new 5G cellular networks and advances in artificial intelligence technologies.

Sony’s chip making business used to be “very successful” but later became unprofitable when its consumer electronics business started to fail, said analyst Patrick Moorhead of Moor Insights & Strategy. He added that its image sensors were a “shining light” since they’re used in most premium smartphone handsets today.

However, Sony is struggling to get its image sensors into other markets, he said. “Companies like ON Semiconductor have run circles around Sony in image sensors for cars and robots and it appears Sony wants to stop the share loss,” Moorhead said.

That much was made clear last year, when Sony said it would invest $5.3 billion into image sensor production over the next three years. That represents a 30 percent jump in spending, based on its previous investments into the business from 2015 to 2018.

It’s easy to see why Sony is making that kind of commitment, though. Industry analysts forecast the image sensor market will be worth $23.2 billion a year by 2023.

Holger Mueller, principal analyst and vice president of Constellation Research Inc., told SiliconANGLE that the investment into its image sensor business would allow Sony to become more vertically integrated and more diversified.

“As the camera becomes the most important smartphone function, it is important for Sony to keep upgrading its image sensing capabilities and add more functions to silicon,” Mueller said. “Chip development is expensive and takes a long time, so it will be interesting to see the first Sony chips in this space in few years.”

Image sensors aren’t the only market that Sony is eyeing as it looks to grow its business. The company has also been exploring the possibility of entering Japan’s ride-hailing market, while its researchers have teamed up with Carnegie Mellon University to explore wilder concepts such as AI-powered robot chefs.

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