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Nohik Semel hands me a thin silicon chip, about the size of a one-shekel coin. "See the black part here? This is the chip we're developing and manufacturing. Here’s the GPS," he points to the bottom of the chip.
"The SIM is embedded here and these are the antenna connectors." Semel, 50, a resident of Kfar Saba, is the CEO of Sony Semiconductor Israel, the local branch of the Japanese electronics giant.
Unlike the local R&D centers of U.S. tech giants, Sony Semiconductor Israel has maintained a low profile since its official establishment in 2016, despite its size and central role within the corporation.
There are no PlayStations here — no Sony TVs or audio systems either.
Semel laughs. "People hear 'Sony' and think of gaming consoles or the old Walkman but Sony is a vast and diverse corporation with numerous subsidiaries, including a bank and an insurance company. It’s highly decentralized."
"We belong to the semiconductor division, which has 15,000 employees worldwide and focuses mainly on smart sensors for various cameras. This division generates about $14 billion annually, roughly 15%-20% of Sony’s total revenue. Sony is one of the largest chip companies in the world today," he explains.
The goal: ultra-low-power chips
Sony Israel specializes in developing and producing chips that enable devices to transmit data via cellular and even satellite networks — the next generation of the Internet of Things (IoT). These chips act as a "complete cellular device on a chip," featuring a modem, GPS, app-processing unit, SIM card and power management components — but without a screen, GPU or user interface.
Examples include chips embedded in smart gas and electricity meters that automatically send consumption data to utility companies, keychain-sized vehicle trackers, child locator pendants that allow parents to monitor and communicate with their kids and wearable medical devices that transmit blood pressure and oxygen saturation data directly to doctors. Smart pet collars and other applications are also part of this rapidly expanding field.
Dima Feldman, VP of product management and marketing at Sony Israel, presents a "cellular sticker" — essentially a phone within a sticker — designed for tracking sensitive shipments such as pharmaceuticals and agricultural goods. The sticker continuously transmits package details, including location, temperature, and access history, to a remote monitoring center.
Due to their minimal power consumption, the batteries in smart gas meters (four AA batteries) last 10-15 years, while a vehicle tracker’s battery can last up to five years. "If you ask our engineers what they dream about at night," says Feldman, "they’ll tell you they’re trying to design these products to run for years without recharging. More than a third of our product development effort focuses on minimizing energy consumption."
'Sony' opens doors
Sony Israel started in 2005 as a small startup called Altair, which developed cellular modems for machine-to-machine communication. Sony acquired it in 2016 for $212 million.
Today, the company employs 400 people at its Hod Hasharon headquarters and has additional R&D centers in Finland, France, Taiwan and Canada. Most employees are software engineers specializing in algorithms, testing and development, alongside marketing and business development staff.
You also deal with marketing? Isn’t this an R&D center?
"Usually, when a U.S. company acquires an Israeli firm, it moves product management, sales and marketing to the U.S., leaving only R&D here," says Semel. "Sony, however, kept the entire leadership team in place as a sign of respect. Even the name change from Altair to Sony only happened four years after the acquisition, once they were sure it wouldn’t harm us. You’d never see that with an American company."
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"It’s also a cultural factor,” Feldman adds. “In Japanese business culture, it’s considered rude to say, ‘We’re buying you for your expertise and now we’ll manage everything.’ Instead, they say, ‘You’re the experts — keep leading. We’ll help by opening doors and facilitating sales.’ And Sony’s brand power is extraordinary: you knock on a door, say ‘Sony,’ and it opens."
Sony Semiconductor’s global CEO told Semel that acquiring the company wasn’t just about business; he was impressed by the Israeli team’s personality and boldness. "I think that was an even bigger factor than the business rationale. They wanted us for our culture and talent," Semel says.
Navigating cultural differences
Semel acknowledges the cultural gap. "We challenge them and some managers appreciate it. Their expectations of foreigners are different from their expectations of Japanese employees. They understand the cultural divide. While we try to learn their ways, I assume they’re learning about us too. You have to make an effort to meet their standards but they know we’ll never be Japanese."
"They challenge us, too," he adds. "For example, when Sony’s global HR deputy retired, I sent him a congratulatory email. Usually, they respond immediately, but this time, it took a few days.
“When he finally replied, it was a heartfelt message but he also thanked me for being ‘straightforward’ with him. I never felt I was particularly blunt — on the contrary, I was as polite as possible by Israeli standards. We had a great working relationship, yet from his perspective, he noticed a nuance I wasn’t even aware of."
Semel: "Working with the Japanese is completely different from anything we're used to—the decision-making process, the nature of the people, the language, the communication style. Just last Thursday, it was the emperor of Japan's birthday and I was invited to a dinner at the Japanese ambassador's residence, along with other local executives from Japanese companies in Israel. You don’t see anything like this in Western companies.
"For 15 years, we've worked with Japanese clients and we've been under Japanese management for nearly a decade. It took me years to realize that I don’t actually understand them. As Israelis, we think we know everything about everything — everything is open, direct and on the table.
"In Japan, most communication happens beneath the surface. Sometimes, you can’t even tell what the person in front of you really thinks. And in meetings, the person speaking isn't necessarily the most senior. You might think you're talking to the decision-maker but it's actually someone else entirely."
Feldman shares another example. "Japanese companies make decisions by consensus. I once tried pushing an initiative, but the senior Japanese manager working with us had a different view. Every morning, he’d visit my office and say, ‘Dima, I think we should do it this way.’
“I’d respond, ‘I think we should do it differently.’ This went on for days. One morning, he said, ‘I couldn’t sleep last night — I still believe we should do it my way.’ I kept pushing back. Eventually, Nohik pulled me aside and said, ‘Dima, let it go. He won’t impose his decision, even though he could. He’s seeking consensus.’ That’s how they operate."
Sony’s evolution: shifting focus
Sony, the 78-year-old Japanese giant long synonymous with high-quality consumer electronics, has undergone a dramatic transformation in recent years. It has shifted its focus away from manufacturing devices and toward content and entertainment, two seemingly unrelated fields.
Today, music, film and video game titles produced by Sony’s studios — which accounted for just 30% of its revenue a decade ago — now make up 60%. And the shift has paid off: the company’s market value has soared, surpassing $100 billion.
Sony is now one of the world’s largest media and entertainment conglomerates, with major subsidiaries such as Columbia Pictures, PlayStation Studios and Sony Music, which holds the rights to artists like The Beatles, Bob Dylan and Michael Jackson.
At the same time, the company has remained a key player in its traditional semiconductor business, particularly in the realm of camera sensors. Sony holds a dominant market share in image sensors for smartphones, professional cameras and industrial applications.
"Cameras are no longer just for photography," explains Feldman. "They’re tools for data collection. That’s why our division focuses on smart imaging solutions that can be integrated into a wide range of industries."
He cites examples like self-driving cars that rely on advanced image sensors to navigate, security cameras equipped with AI-powered analytics and medical imaging systems that enhance diagnostic accuracy.
Who needs AI in a security camera?
Feldman: "A camera with an AI processor is essentially a sensor — it captures the scene, 'understands' what's happening and sends only that information to the cloud. It's a camera that, more than recording footage, generates data.
“We developed such a processor years ago, long before the current AI hype. And while in smartphones, image processing is handled by the device manufacturer’s processor, we integrate artificial intelligence directly into the sensor itself.
"Security cameras operate constantly, so you can choose what interests you in the footage and receive alerts and data about it — without even viewing the images or compromising privacy. For example, tracking the number of people in a certain area, identifying individuals carrying backpacks or monitoring store shelves that attract special attention from customers.
“In Japan, for instance, these cameras are deployed in 7-Eleven stores to analyze customer behavior, while the municipalities of Rome and Milan use our sensors to monitor crosswalks and study pedestrian movement."
Operating globally as an independent subsidiary under the name Sony Israel? That seems a bit problematic these days. Are you sure the Japanese are okay with it?
Semel: "Not only are they okay with it — they insist on it. If we ever forget to include 'Israel,' they remind us to. We had concerns about the geopolitical situation following the war but they were adamant that 'Israel' remain in our branding everywhere.
"We deeply appreciate that. We've learned so much from them. We started as a wild startup, with products that weren't at today’s level of quality. They taught us structured workflows, meticulous attention to detail and how to dig deep to find the real problem instead of just covering it up. So yes, we’re getting closer to them, and they’re getting closer to us."