Unusually low rainfalls in Taiwan over the past year have resulted in water shortages, particularly in the southern parts of the country. Some companies at the Southern Taiwan Science Park, including TSMC, have started buying truckloads of water to make up for the shortfall from reservoirs, apart from stepping up conservation measures. TSMC is set to move 4nm process to volume production in 2022, which may prompt Qualcomm to place foundry orders for its next generation mobile chips. Stronger-than-expected demand from 5G and automotive chip segments is sending MLCC pricing up.Taiwan chipmakers moving to counter water shortages: Chipmakers including TSMC and UMC have started buying water by the truckload for their foundries in Southern Taiwan Science Park (STSP), as reservoirs in southern Taiwan face dwindling water levels following months of scant rainfalls, according to industry sources.Qualcomm may switch to TSMC 4nm node in 2022: Qualcomm will continue to fabricate its next-generation 5G mobile chip, tentatively dubbed Snapdragon 895, at Samsung Electronics built using an upgraded 5nm process, but may switch to TSMC in 2022 using its 4nm process, according to industry sources.High-capacitance MLCC prices set to rise: MLCC vendors including Samsung Electro-Mechanics (Semco) and TDK are likely to raise their quotes for high-capacitance MLCCs in response to stronger-than-expected demand for 5G handset and automotive applications, according to channel distribution sources.

Tesla is expected to sell 800,000 electric vehicles (EV) globally in 2021, increasing 60.1% on year, and the more price-friendly Models 3 and Model Y will together take up 90.4% of the volume, Digitimes Research forecasts.Tesla sold nearly 500,000 EVs for a global market share of 16% in 2020. Nearly 140,000 units of Model 3 were sold in China for a EV market share of 11% and nearly 88,000 units in Europe for a 6% in 2020.Tesla has brought in handsome revenues from sales of software consisting of FSD (full self-driving) kits, payable OTA (over the air) functional upgrades, subscription-based infotainment services.For FSD, the major source of software sales revenues, Tesla initially offered hardware/software-integrated ADAS kits in 2014 and had kept upgrading them until it offered initial FSD in early 2019. FSD/AP HW3.0, the latest FSD version featuring support to Level 5 autonomous driving, was launched in October 2020.In line with autonomous driving technology development, Tesla plans to establish Robotaxi Network to operate rental self-driving taxicabs, as its new business model.

The frigid weather that halted production in the US state of Texas may prompt IDMs to mull adjusting outsourcing strategies. Seeking more support from manufacturing partners, particularly those in Taiwan, may be a way for IDMs to diversify risks in an IT sector that has been haunted by uncertainty and tight supply. Fabless IC vendors have been troubled by insufficient supply from foundry partners, but some of them who have backing from well-established parent cormpanies, such as UMC-affiliated IC design houses, have been better off than others. In the notebook sector, the top-5 brands and top-3 ODMs saw shipments drop in January due to seasonality and components shortages, according to Digitimes Research. IDMs may evaluate more outsourcing: IDM vendors may consider outsourcing more of their production starting 2022, with Taiwan-based contract chipmakers being among the beneficiaries, according to industry sources.IC design houses with strong backing more capable of winning foundry support: Taiwan-based IC design houses backed by large-scale and well-established parent companies, such as LCD driver IC firms Fitipower Integrated Technology and Raydium Semiconductor, will be more capable of mitigating the impact of increasingly tight capacity at foundries in 2021, according to market sources.Top brands and ODMs see January notebook shipments decline: After hitting a new high in monthly shipments last month, the global top-5 notebook brands saw their combined shipments slip more than 10% sequentially in January due to seasonality and the fact that component shortages have shown no improvement.

The application of Open RAN (O-RAN) networks is gaining popularity worldwide, offering plenty of opportunities for Taiwan-based makers to tap into the niche market by optimizing their capabilities in the manufacture of semiconductor and electronics products.The impetus pushing forward to using O-RAN networks in Europe comes after Vodafone, Deutsche Telekom, Telefonica and Orange signed an MoU in mid-January to promote the O-RAN. Telecom Italia also joined the initiation in early February.The initiation, which also calls for support from the EU and other governments, aims to build a local O-RAN industry supply chain and an ecosystem that will include testing laboratories and demonstration fields to incubate innovative O-RAN applications.Most European telecom players favor releasing relevant orders to established telecom equipment suppliers and 5G software companies through biddings, and therefore, Taiwan's O-RAN device makers may cut into related supply chains by cooperating with telecom equipment providers, Digitimes Research believes.There is already an established O-RAN supply chain in the US. The supply chain players include: RAN software providers Altiostar and Mavenir; cloud platform management firms Red Hat and VMWare; and hardware and software system provider Cisco Systems. They also include chipmakers Intel, Xilinx and Nvidia as well as cloud operators such as Facebook, Google and Microsoft.By optimizing their manufacturing capabilities, Taiwan's firms can complement US firms to realize related product development and solutions.In Asia, NTT Docomo is teaming up with NEC and Fujitsu to tap the enterprise private O-RAN network market.The NTT Docomo team is tying up with Thailand-based AIS and a number of Japan-based firms to form a 5G Global Solution Consortium (5GEC) to promote the use of O-RAN and related 5G applications by Thailand's manufacturing and construction firms initially.Taiwan's firms can cooperate with the 5GEC to help build enterprise private O-RAN networks, optimizing Taiwan's large-scale manufacturing capacity and its digital application technology and Japan's expertise in high-precision machinery, components and materials.

After hitting a new high in monthly shipments last month, the global top-5 notebook brands saw their combined shipments slip more than 10% sequentially in January due to seasonality and the fact that component shortages have shown no improvement.Hewlett-Packard (HP) had better shipment results than its peers in January due to increased shipments of consumer models and Chromebooks. Lenovo saw a sharper decline sequentially than competitors in the month as seasonality had a major impact on the Chinese brand's entry-level to mid-range product shipments, Digitimes Research's numbers show.Dell's shipments went down nearly 20% on month due to unsatisfactory sales of Windows-based models and Chromebooks in the enterprise segment.The top-3 notebook ODMs together witnessed an 18% on-month decline in January shipments. Wistron's shipments dipped only less than 10% on month thanks to Dell increasing the proportion of its outsourcing to the ODM.Notebook shipments to decline on month in JanuaryPhoto: Digitimes file photo

Major chip vendors have been striving for support from production partners, and Qualcomm reportedly will even appoint a VP dedicated fully to working to secure capacity in Taiwan. Qualcomm and MediaTek are also said to be both stepping up orders for BT substrates to faciliate their shipments of 5G handset APs and mmWave AiP modules. In the server sector, the frigid weather striking Texas and some parts of Mexico has disrupted production at ODMs, but demand in 2021 will remain robust.Qualcomm gearing up to cement capacity support from Taiwan partners: Qualcomm has been gearing up to seek multiple supply sources for both silicon-based and III-V semiconductors amid increasingly tight capacity at the global IC value chain, and reportedly will install one vice president working exclusively to cement support from production partners in Taiwan, according to industry sources.Chipmakers placing extra orders for BT substrates amid tight supply: As supply of high-end BT substrates has turned tight in the first quarter of 2021, major chipmakers including Qualcomm and MediaTek are moving aggressively to secure more capacity support from Taiwan IC substrate makers to meet increasing demand for 5G handset APs and mmWave AiP modules in the months ahead, according to industry sources.Server supply from North America disrupted by cold weather: Server supply from Mexico, a major production hub for Taiwanese ODMs, is expected to be undermined by the recent frigid weather hitting the northern part of the country and the US state of Texas, according to sources from the upstream server supply chain.

Automakers are desperate for support from foundry partners to ease chip shortages disrupting their production, and they are willing to pay extra in return for foundries giving top priority to their orders. TSMC has agreed to give automotive chip orders SHR (super hot run) status. But more support from Taiwanese foundries may not be enough to ease their trouble, which has now been compounded by the frigid weather in the US state of Texas that has halted production at wafer fabs there. Taiwan's top-3 foundry houses are expected to see their overall sales hit a record level in 2021, according to Digitimes Research.TSMC agrees to rush shipments to automotive chip customers: TSMC has agreed to give top priority to orders placed by its automotive chip clients, giving them SHR (super hot run) status, according to sources at Taiwan-based analog IC firms.Winter storm in US to disrupt chip supplies: The impact of winter storms that struck the US state of Texas could be significant on the world's supply of certain semiconductors, including high-end NOR flash and chips demanding 8-inch wafer fabrication, according to industry sources.Taiwan top-3 foundries to see combined revenue hit another record high in 2021, says Digitimes Research: Combined revenue of Taiwan's top-3 pure-play foundries are expected to rise 17% on year to top US$60 billion in 2021, Digitimes Research estimates.

Combined revenue of Taiwan's top-3 pure-play foundries are expected to rise 17% on year to top US$60 billion in 2021, Digitimes Research estimates.TSMC, UMC and VIS saw their combined revenue climb to a record high of US$52.69 billion in 2020, Digitimes Research has found.The top-3 Taiwan-based foundries generated a combined US$14.58 billion in the fourth quarter of 2020, up 4.4% sequentially and hitting a record high. Their combined revenue is forecast to grow another 1.7% on quarter to US$14.83 billion in the first quarter of 2021, as demand propelled by coronavirus-induced stay-at-home initiatives remains strong. A pick-up in demand for automotive chips, as well as rising wafer ASPs, are other growth drivers.In addition, TSMC, UMC and VIS will see their planned capex this year reach a combined US$28 billion, of which TSMC's account for the majority. In 2020, their combined capex came to US$18.3 billion - already a record high, according to Digitimes Research.

With demand remaining robust, ODMs are expected to see their first-quarter 2021 notebooks shipments drop by only 10-15% sequentially, milder than the usually over 20% declines seen during the traditional low season. Stay-at-home activities have also been keeping server demand strong. Digitimes Research expects global server shipments to decline by less than 2% in the first quarter. Meanwhile, the handset market is gaining momentum, driven by telecom carriers' faster pace in constructing 5G networks. Global 5G smartphone shipments are forecast to reach almost 550 million units this year.Notebook ODMs to see milder drop in 1Q21 shipments: Notebook ODMs will see their shipments decline 10-15% sequentially in the first quarter of 2021, compared to larger decreases of over 20% during the same period in previous years, according to industry sources.Server makers see healthy orders in 1Q21: Server shipments are expected to stay strong in the first quarter, thanks to robust orders from US-based cloud computing datacenter operators, according to sources from the server upstream supply chain.Global 5G smartphone shipments to approach 550 million units in 2021: Worldwide 5G smartphone shipments are expected to grow drastically to nearly 550 million units in 2021, and supply chain players will benefit as a result, according to market sources.

The handset market in China is recovering, with shipments staging a strong rebound in January ahead of the Lunar New Year holidays. January handset shipments in China almost doubled compared to the same month last year. Mobile SoC vendor MediaTek, who has a strong presence in the China market, saw its January sales soar almost 80% on year. MediaTek has recently unveiled its mmWave-enabled M80 5G modem chip, which is expected to heat up competition in the mmWave SoC solution market in the second half of 2021.China handset sales rebound in January: Shipments of handsets staged a significant rebound in the China market in January, fueled by seasonal demand ahead of the Lunar New Year holiday and the rollouts of new budget 5G phones by Chinese vendors, according to industry sources.MediaTek sees January revenue soar nearly 80%: Mobile SoC specialist MediaTek saw its January revenue surge nearly 80% from the same period in 2020.Competition in 5G mmWave SoC market to heat up in 2H21: MediaTek's recently announced mmWave-enabled M80 5G modem chip is likely to fuel competition in the mmWave SoC solution market in the second half of 2021.