Sony bets on image sensors with $3.6 billion stock and bond sale by Robert Hackett @FortuneMagazine June 30, 2015, 10:54 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons As the smartphone market swells for companies like Apple AAPL and Samsung SSNLF , Sony is banking on demand for its lucrative image sensors to keep apace. The company needs cash to sustain its production. The Japanese electronics giant has announced that it will seek to raise $3.6 billion through a share sale in order to meet the market’s appetite for the handset-embedded technology. Sony SNE will offer $2.6 billion through new shares and another $1 billion through bonds convertible into stocks. It is the first time the company has issued new stock since 1989. The company says it will use the funds it raises to invest in research and development, and production capacity for its digital sensors. Investors showed trepidation about the plan. Sony’s share price took a brisk dip upon hearing the news, dropping 8.3% by market close. Shareholders are likely concerned that the new stock will dilute the value of existing shares, a common reaction when companies announce similar sales. While the market responded adversely to the news in the short-term, Sony’s long-term outlook may be brighter. Industry watchers consider the company’s image sensor technology to be superior to that of rivals like Samsung and OmniVision Technologies OVTI . And the smartphone market shows no signs of slowing down. The sale represents part of Sony CEO Kazuo Hirai’s ongoing strategy to invest in core high-growth business segments, such as devices, movies, music, and video games. Hirai is ambitiously aiming for the company to hit a target of roughly $4.0 billion in operating profit by 2017. “We have gone through a restructuring phase and are now entering into an investment stage,” Sony spokesman Yasuhiro Okada told Bloomberg.