China accounts for a third of the global car market. And of the 2.2 million electric vehicles (EV) sold worldwide in 2019, 48.2% were sold in the China market. No wonder China carries so much importance in the car industry.Around 2000, car vendors from around the world flocked to China. There were so many foreign cars running in China that the country was described as a "colony" of foreign carmakers.But 20 years on, the car industry has seen drastic changes. European, US and Japanese car vendors may still be leaders in the market, but they rely heavily on production in China.And for EV production, six of the global top-6 EV battery makers are Chinese firms. The importance of batteries in EV production must not be underestimated: Batteries account for over 40% of the cost of an EV. And of course, the production of EV batteries involves the supply of rare earths, a sector which China dominates. What will the future be like for Western carmakers and Taiwanese suppliers when the age of EV arrives?Foreign carmakers flocked to China after it entered WTO. The world's top three automakers, General Motors (GM), Volkswagen and Honda, all have more than 30% of their vehicles manufactured in China. In particular, GM's factories in China account for 45% of its production, and VW's 38%. That is, the world's largest automaker VW produces slightly over 10 million vehicles a year and four million of those are made in China. GM makes three million cars in China.Foreign automakers rely heavily on China, which at the same time has developed a strong car industry of its own. But China is not eyeing the traditional fossil fuel cars or doing manufacturing for foreign car vendors. Rather it is keen on developing EVs, car components integrating software and hardware, and creating services.The future of car industryAt CES 2020, at least 30 vendors showcased their concept cars, including Mercedes and BMW. Mercedes' Vision AVTR, inspired by the movie Avatar, boasts use of clean energy and harmony between humans and nature. The fish scale-like exterior looks like breathable skin, which allows the vehicles to communicate easily with the outside world. Sony's Vision-S concept car, with 33 cameras replacing the rear-view mirrors, demonstrates the Japanese vendor's attempt to tap the car market by leveraging its strength in electronics.Traditional automakers may partner with leading electronics manufacturers, with an aim to replace global tier-1 automotive component suppliers including Japan-based Denso, Germany-based Bosch and Continental, and Canada-based Magna International. Bosch CEO Volkmar Denner does not expect an increase in global automotive production in the next five years. He also foresees that the current business model in the car industry will come to an end by 2030.Does the joint venture between Foxconn and Fiat Chrysler (FCA) mean that when EVs become more popular in the car market, the production process will be similar to that of electronics? Compal, Wistron, Inventec and Delta Electronics are all eyeing the car market in their "post-PC" deployments.Global automotive market, 2014-2019 (m units)Sources: Various car associations and OICA, compiled by Digitimes, July 2020

A smart manufacturing trial base in central Taiwan will extend from experimental production for components to technological verification of smart manufacturing solutions, according to Intelligent Machinery Technology Center (IMTC) under government-sponsored Industrial Technology Research Institute (ITRI).The base, set up by IMTC at Taichung Precision Machinery Innovation Technology Park, started operation in September 2018. The base, equipped with locally-developed machine tools, automation equipment and software, is intended to introduce concept of smart manufacturing to Taiwan-based small- to medium-size makers.As more and more makers hope to introduce smart manufacturing to hike production efficiency and competitiveness, the base has to play an additional role of verifying smart manufacturing solutions to be adopted, helping makers set up smart factories covering planning, equipment development and system integration, IMTC said. For example, a shoe maker planning to set up a factory in Vietnam can install trial production lines, and if proved to be feasible, they can be exported to the Vietnam factory on a turnkey basis.Verification for technological feasibility can help makers save R&D cost and time, IMTC said.The base has so far helped over 100 makers undertake experimental smart production of over 800 models of components used in automobiles, bicycles, machine tools, aerospace devices and various molds.ITRI's smart manufacturing trial base Photo: Shihmin Fu, Digitimes, July 2020

The high-speed transmission of 5G will allow games to be played like streaming media and players will no longer need to wait for the contents to be fully downloaded, according to Taiwan-based game developer Winking Entertainment chairman Johnny Jan.Jan noted that games' trials or demos play a key part in attracting players to purchase and if the services can happen instantaneously, it could keep the players enthusiastic and increase the chance for them to make purchase.Cloud computing is another area where 5G can benefit the gaming industry. With 5G, game processing can be fully handled at the cloud server side, which simply needs to transmit the game screen back to the players' handheld devices, Jan said in a speech he delivered at a recent forum on the gaming industry.With the services, the penetration rate of AAA games will rise significantly as all users can enjoy them without needing to spend a fortune to acquire a compatible high-end hardware, he said.In addition to Google, which has been keen on trying to penetrate into cloud computing gaming, telecom carriers, Sony and Nintendo will also begin releasing related services.VR gaming is also expected to benefit significantly from 5G as VR contents generated by the mainframe can be transmitted wirelessly and VR games can also shift from a player to environment (P2E) mode to a player to player (P2P) one.Gaming to be significantly changed by 5GPhoto: Digitimes file photo

TSMC has also developed InFO_SoW (system-on-wafer) technology mainly for processing supercomputing AI chips. Demand for such extremely costly chips may be limited, but TSMC looks to commercialize the InFO_SoW technology in two years. Menawhile, TSMC's aggressive capacity expansion is set to boost sales of Taiwan-based equipment and materials suppliers, as the foundry moves to source more from the local ecosystem partners. Meanwhile, Taiwanese PCB makers see poor order visibility from Chinese handset vendors for second-half 2020.TSMC may commercialize InFO_SoW for supercomputer AI chips in two years: TSMC, after launching 3D SoIC backend service, has also developed InFO_SoW (system-on-wafer) technology mainly for processing supercomputing AI chips and is expected to enter commercial production with the InFO-derived process within two years, according to sources familiar with the advanced packaging process.TSMC fab tool suppliers see promising outlook: Taiwan-based semiconductor equipment suppliers engaged in TSMC's supply chain are set to be among the beneficiaries of the foundry house's advanced process capacity expansion with their short- and mid-term growth outlook promising, according to industry sources.PCB makers cautious about 2H20 shipments to Chinese handset vendors: Taiwan's PCB makers have turned cautious about their shipments for non-Apple handset applications in the second half of the year as most Chinese vendors have yet to give clear shipment estimates so far although traditional seasonal demand should still arrive, according to industry sources.

5G technology's low latency and fast data transfer can help improve IoV functions and hike traffic safety, according to Wu Kun-rong, vice president for Data Communications Business Group at Chunghwa Telecom (CHT).4G enables communications between cars, or between vehicles and infrastructures, as well as in-car informatics, Wu said at a 5G smart city seminar held by HwaCom Systems. Along with increasing installation of various automotive sensors and roadside sensing infrastructures, 5G enables real-time multi-point communications between cars and between cars and roadside sensors.Wu said 5G-based traffic monitoring can be used to adjust traffic lights for preventive control.CHT has undertaken smart transportation projects in cities in Taiwan, using image recognition to collect urban traffic data in combination with data collected via smartphones to estimate traffic flows.

China-based panel maker China Star Optoelectronics Technology (CSOT) has decided to invest in Japan-based JOLED, in a bid to develop inkjet printing technology for production of OLED TV panels in the next three years, according to Digitimes Research.CSOT and its China-based joint venture Guangdong Juhua Printed Display Technology showcased a jointly developed 31-inch flexible Full HD inkjet printing OLED display at 2020 CES. Of Chinese display panel makers, CSOT is the most active in developing inkjet printing OLED panels.While it is not feasible to use inkjet printing to produce smartphone-use OLED panels with resolution levels of 350-550ppi (pixel per inch), JOLED has trial-produced inkjet printing OLED panels of over 300ppi, which is sufficient for 21.6-inch 4K monitors (204ppi) and 65-inch 8K TVs (126ppi). JOLED keeps developing inkjet printing OLED toward a resolution level of 400ppi.Founded in January 2015 through combining Sony's OLED business unit and Panasonic's, JOLED has begun small-volume shipments for inkjet printing OLED panels to Sony, Eizo and Asustek Computer for use in high-end and medical monitors.JOLED completed construction of a 5.5G inkjet printing OLED panel production line in November 2019. As JOLED's existing shareholders are unwilling to invest further, CSOT's investment is important for JOLED to bring the production line into operation.While there is room for improving resolution levels, power consumption and service lives of light-emitting materials for inkjet printing OLED, the technology, as compared with conventional OLED panel manufacturing process, has advantages in more efficient use of materials, simpler structure of organic material layers, doing without expensive vacuum evaporation equipment, which will result in lower production cost.

There are many factors that should be taken into consideration when doing market research. To better assess supply chain changes, let's first draw a 3x3 grid that offers a clear framework on all key information. Across the diagonal of the grid, we put the fundamental factors that will affect the ICT industry's integrity and influence. Then, we put supply-side factors on the upper left part of the grid and demand-side factors on the lower right. This will help us gain a grasp of key information when searching through a massive database.My latest book, Disconnected ICT Supply Chains: New Power Plays Unfolding offers readers this 3x3 grid as a quick reference and framework to understanding the ecosystem, markets and crucial factors.

In the competitive smartphone maket, product differentiation is one of the crucial factors to attract customers. Handset vendors are now looking to customized chips to achieve such production differentiation, with Xiaomi reportedly working closely with MediaTek on developing 5G SoCs for its phones. In the display sector, the moves of Samsung Display and LG Display to quit LCD production have sent TV vendors looking elsewhere for panel support, which in turn is increasing demand for driver ICs and TV SoCs from non-Korean suppliers. In the EV sector, supply of SiC wafers is expect to become tight, with suppliers now looking to expand production capacity. Xiaomi, MediaTek reportedly team up for custom smartphone chips: Chinese handset vendor Xiaomi reportedly will work more closely with MediaTek to jointly develop customized SoCs for 5G smartphones after having its Redmi 10X series adopt the chipmaker's Dimensity 820 mobile processor, according to industry sources.Prices for TV SoCs, driver ICs set to rise: Taiwan's IC designers are mulling raising quotes for TV SoCs and driver ICs amid increasingly tight supply as Korean vendors gradually quit production of LCD panels and TVs as well as related chips solutions, according to industry sources.SiC wafer in robust demand for EV applications: The supply of SiC wafers may become insufficient to satisfy demand for electric vehicles (EV) in the near future, prompting Taiwan-based silicon wafer makers including GlobalWafers, Wafer Works and Tainergy Tech to step up deployments in the new segment, according to industry sources.

TSMC is the clear leader in the semiconductor foundry sector, and Samsung is keen to close the gap. The Korean giant reportedly plans to skip the 4nm node and jump directly from 5nm to 3nm in a bid to beat the Taiwanese rival in the tech advancement race. Meanwhile, TLC NAND flash prices are coming under downward pressure thanks to a slowdown in consumer SSD demand in the wake of the coronavirus pandemic.Samsung reportedly to skip 4nm foundry process: Samsung Electronics has revised its foundry process roadmap, skipping 4nm and jumping directly to 3nm from 5nm, according to industry sources.TLC NAND flash prices under downward pressure: NAND flash contract prices are expected to hold flat in the third quarter of 2020, but prices for 3D 3bits/cell (TLC) NAND chips have come under increasingly downward pressure due to a further slowdown in consumer SSD demand, according to industry sources.

To give a clear picture of the ICT industries, we can divide them into five major market segments - communication, computing, home appliances, automotive electronics, and industrial automation/defense. For example, computing and communication contribute about 65-70% of the ICT sales, with consumer electronics, automotive devices, and industrial control each accounting for about 10%. Automotive devices promise explosive growths, while industrial control involves large varieties of applications. But the arrival of 5G is also promising huge business opportunities for industrial applications. Consumer electronics still have potentials coming from smart home applications, such as TVs.The display panel industry is also a key sector along with semiconductor. But the next stage of development will rely on emerging markets and decentralized supply chains. COVID-19 has disrupted carmakers' supply chains, but for Japanese and Korean carmakers, it was the lack of low-end parts, such as wiring harnesses, that stalled their production. Japanese and Korean carmakers rely on China for 30% of their parts supply, while the US reliance is only about 13%. What's difference between them?These show the opportunities for Vietnam, Indonesia, India and the Philippines to become manufacturing hubs. Will Canada and Mexico stand a chance in the carmaking industry with US support? In my new book, Disconnected ICT Supply Chains, I try to answer some of the questions raised in the wake of COVID-19.Correlation between 3 core ICT sectors and 5 major market segments