Kodak to use IBM's digital image sensors

SHANGHAI: Camera maker Eastman Kodak and IBM, the world's biggest computer company, said on Thursday that the two US companies had agreed to a deal in which IBM will manufacture digital image sensors for Kodak.

Kodak of Rochester, New York, and International Business Machines Corp. of Armonk, New York, said the multiyear deal calls for IBM to make sensors for use in digital cameras and cameraphones at IBM's Burlington, Vermont, chip plant.

For Kodak, the deal gives the company an assured source of supply for the crucial components at the heart of digital cameras as it aims to more aggressively take on Asian camera makers, many of which operate chip factories of their own.

For IBM, signing up Kodak propels the computer maker's contract chip manufacturing business squarely into the consumer electronics field. IBM can also resell the technology to additional customers.

Financial terms of the deal were not disclosed.

Kodak said that the IBM deal, when combined with additional technology it acquired recently from National Semiconductor Corp., will allow it to develop consumer products that can offer multi-megapixel image-quality and 30-frame per second video under low-light photographic conditions.

The two companies said they were working to develop a customized technology that combines Kodak's imaging expertise with IBM's advanced copper chip technology.

The deal will allow Kodak to create a new family of image sensor devices based on complementary metal oxide technology. Image sensors act as the "eye" of a digital camera by converting light into electric charges to begin the picture capture process.

Starting in 2005, IBM will offer image sensors to customers of its foundry, or contract chip-making business, boosting IBM's role in the digital photography market.

The two companies said the high-volume production deal should help make high-resolution digital cameras available at consumer-level prices and address a major quality issue that has inhibited digital camera adoption among consumers seeking picture quality on a par with top nondigital cameras.