TowerJazz has won a contract from Intel Corp to produce infrared sensors for Intel's 3D cameras, the Israeli chip manufacturer said on Tuesday.
Terms of the deal were not disclosed, but a market source who asked not to be named estimates that the agreement could be worth hundreds of millions of dollars within four years.
The 3D cameras installed on laptops recognise gestures, enabling users to control their computers with hand and head movements.
The technology was developed by Intel's Israeli subsidiary close to TowerJazz's manufacturing plant in northern Israel.
Avi Strum, general manager of TowerJazz's CMOS image sensor business, said the technology has numerous potential uses, such as the ability for the likes of cooks or car mechanics to operate a computer with gestures rather than having to touch it with dirty hands.
The camera can also capture images of an object and quickly create a model for use in 3D printing.
"Intel sensing solutions will bring consumers new experiences and will change the way people capture and share 3D images," Strum said.
"That Intel chose us for mass production of such sensors is very positive."
While gesture control is most common in laptops or gaming systems, it is expected to become more widely used in mobile devices such as smartphones.
© Thomson Reuters 2015