Wondering if there is enough demand for digital cameras and supporting accessories? You bet! If the recent announcement by camera manufacturer Canon is anything to go by, the demand for cameras will only increase in the years to come.

 

According to a Reuters report, Canon is planning to invest about 55 billion yen ($451 million) to build a new factory in Japan. This new factory will enable Canon to double its production capacity of image sensors used in digital cameras.

 

A spokesman for the company was quoted in the Reuters report as saying it broke ground in May on a new building on an existing site in Kanagawa Prefecture near Tokyo. The company expects the operations to start in July 2008.

 

So, what will the new factory manufacture? Complementary metal oxide semiconductors (CMOS). This is a component used in digital cameras and video cameras to convert light into an electric signal.

 

The company's other factory in Kanagawa can churn out 3 million CMOS chips a year. This new factory near Tokyo will also have roughly the same capacity. Both single lens reflex (SLR) models as well as some compact models will use the CMOS chips. Until now, Canon's compact cameras have used a different type of image sensor called a charge-coupled device (CCD).

 

According to the Reuters report, Canon has been procuring CCDs from other suppliers such as Sony. With an intention of cutting costs and producing CCDs in-house, the company has been manufacturing CMOS sensors for compact models for some time now.

 

The company is planning to produce 24 million digital cameras this year, including 3 million SLRs, which are high-end models that use interchangeable lenses.