IoT is poised to become the backbone for the future of smart living. Some research institutions have projected the IoT market will have 50 billion connected devices and reach a scale of US$100 trillion by 2030. As a global high-tech hub, Taiwan has built up strong innovation capability.To help Taiwan-based startups tap into worldwide markets, especially during the times of COVID-19 pandemic when business travels become very costly and in many cases impossible, Taipei Computer Association (TCA) and InnoVEX co-hosted the AIoT New Generation Life Application Taiwan Startups Webinar - an online matchmaking forum targeting the Japan market. The event engaged nine Japanese venture capital and Japanese startup ecosystem experts who provided professional counselling to eight outstanding Taiwan-based startup teams with respect to their products and marketing strategies to help lower the entry barrier to the Japanese market.The nine Japanese experts invited to the event included: PKSHA Capital, focusing on AI technology investments; Bridge, a Japanese media website dedicated to local startup news; GiTV, funding all kinds of digital innovations worldwide; aKtivevision, devoted to matchmaking between startups and large enterprises; Orange Lab, a large-scale French incubator which holds two startup contests each year; TEP, centered on fostering academic startup teams; Pan Pacific Innovation Ventures, mainly investing during seed and pre-A rounds; Global Brain, holding a JPY5 billion capital and also providing technological resources; and TPTF with a Taipei branch office making full efforts to connect Asian startups with American and European markets.Targeting precise user groupsThe recent rapid advances in the combination of AI and video surveillance technologies have helped ensure security in people's daily lives. However, it is not easy to find the balance between privacy and security. Beseye Cloud Security's AI image recognition system protects security without compromising privacy. To Beseye Cloud Security's smart platform, PKSHA Capital managing partner Ebihara offers the advice that Beseye Cloud Security will have to differentiate itself from local Japanese firms in order to successfully introduce its technologies to Japan. He suggests that the team develop special-purpose systems targeting specific application scenarios or user groups so that its marketing strategies have a more precise target.Compared to other market sectors, few startups have thought of developing rental property management systems for income-producing real estate investments. The founder of JGB Property has more than 10 years of property investment experience in different countries and thus knows very well the pain points of property management. This prompted JGB Property to develop a smart platform that integrates 720-degee VR-enabled vacancy management, electronic lease signing, real-time bookkeeping and remote smart lock control. The all-in-one SaaS platform allows real estate agencies and property managing firms to significantly save costs and raise efficiency. In view of Japan's large rental property market, Bridge co-founder Ikeda thinks JGB Property can partner with other startups to further enhance the benefits of its platform. For example, target users will embrace the platform more enthusiastically if it can help reduce the vacancy rate.Industry 4.0 is the most critical trend to the manufacturing sector in recent years. KDH Design has built a smart warehousing system targeting Industry 4.0 applications based on a variety of advanced video technologies and the manufacturing experience of Foxconn subsidiary FHnet. In complimenting the technological content of KDH Design's product, GiTV co-founder Kinoshita further suggests that KDH Design gear its market strategy toward a more refined user group and develop a tailored warehousing system that closely matches the needs of a specific type of manufacturers.The senior market has enormous demand and clear needs, thus attracting a slew of startups. With an aim to help senior citizens cope with dementia and sarcopenia, LTPA Solution has designed an interactive somatosensory device that integrates IoT, cloud and AI technologies for cognitive rehabilitation training. Kawabata, aKtivevision founder, comments that with an aging population, seniors caring for other seniors will become the norm in both Taiwan and Japan, thus LTPA Solution's device has great potential going forward. He also points out that governments around the world have instituted healthcare laws and advises that startups gain a good understanding of local regulations and market conditions before venturing into foreign markets.Products with creativity and usabilityEnergy management is a key research area where governments and corporations around the world are focusing. NextDrive provides a comprehensive energy service solution that enables power companies and energy retailers to make use of the Internet of Energy (IoE) platform and create a sharing, co-thriving, sustainable and renewable energy system and circular economy. In offering advice to NextDrive, Orange Japan strategic partner manager Nishikawa notes the market already has a wide range of remote energy control solutions competing fiercely against one another. The fact that NextDrive is already marketing its solution in Japan proves the feasibility of its solution. For NextDrive to expand its market footprint, Nishikawa suggests that NextDrive develop power systems for specific application scenarios. By offering both general-purpose and special-purpose systems, NextDrive can build up leadership in this market segment.Pet owners have strong demand for all kinds of pet products, giving rise to immense innovations in this market segment. Shenli International has created a pet potty that cleans pet waste in just three seconds without the need for water or electricity. The company looks to apply the design concept to long-term care in the future. TEP chairman Ozaki thinks Shenli International's product has tremendous potential in Japan and suggests enhancements to its functionality by incorporating high-tech features. For example, by adding sensors and combining with smart appliances or smartphones, the pet potty can automatically detect pet waste and clean it up with corresponding smart devices. This will further strengthen the product's usability.Starting Point focuses efforts on optimizing attendee experience for physical events and facilitating event organization with the help of technology. Users can leverage Starting Point's website and app to easily plan an event and manage the process. They can also make use of data analytics to select the most suitable promotional products. There is also an internal meeting system for event planners to make it easier for them to complete the tasks. Pan Pacific Innovation Ventures Taiwan general manager Sekiguchi acknowledges that Starting Point's platform can ease the workload for event organizers and it is ideal for the Japanese society. He suggests that Starting Point target Japanese advertising agencies, public relations firms and local governments. In particular, Japan is actively promoting "local revitalization" so if Starting Point can strengthen the platform's connection with Taiwan and attract Taiwanese tourists to Japan, it will definitely strike it big.A fire can lead to serious and significant property damage and even loss of life. If a fire can be extinguished in the early stage, casualty and damage can be kept to a minimum. SunJet Robotics developed a solution integrating smartphones, sensors, surveillance cameras, AI technologies and big data analytics that can detect and put out an incipient stage fire. Global Brain partner Tatsuoka thinks the solution is viable but the deployment cost may be too high and hinder its widespread adoption. He suggests that SunJet Robotics adjust the deployment and maintenance costs and add more functions to expand the application scope and thereby increase market acceptance.Localization strategiesCommenting on the Japan-Taiwan collaboration, the experts agree that Taiwan, with robust hardware capability, market agility and strong execution, and Japan, with robust software capability, premium brand image and refined marketing planning, can complement each other and together achieve great success in worldwide markets. The experts also point out a few things to Taiwan-based startups looking to expand into Japan. First of all, they need to hire Japanese talent to help map out their localization strategies. Many Taiwanese may think they have a good understanding of the Japanese society but in fact Japan's business culture and practices are quite different from most other countries. Taiwan-based firms targeting the Japan market must take an in-depth look into the local needs. As to Japan's startup community, Tokyo still hosts the largest startup cluster while Osaka, Kyoto and Fukuoka also have complete startup ecosystems. In conclusion, the experts note Japan is the perfect first step on Taiwan-based startups' road to global expansion as Japan offers an open and fair market, it is in close proximity to Taiwan and the businesses and citizens of both countries maintain good relationships. They look forward to strengthened collaborations between the two countries going forward to jointly capture smartization opportunities in the IoT era.Participants at AIoT New Generation Life Application Taiwan Startups Matchmaking Webinar Photo: Digitimes, December 2020

Both TSMC and Samsung reportedly are facing issues that are slowing down the progress of their 3nm process node developments. The foundry houses may have to delay moving their respective 3nm process to voume production. In China, distributors of chip resistors have raised their prices reportedly to reflect unstable supplies from the manufacturing side. Taiwanese PCB makers remain upbeat about demand in first-quarter 2021, but are conservative beyond that, judging from uncertain developments arising from a number of factors, such as the momentum from the stay-at-home economy.Development of 3nm process challenging TSMC, Samsung: TSMC and Samsung Electronics have both encountered different but critical bottlenecks in the development of their respective 3nm process technologies, according to industry sources.Chip resistor prices rising in China: China-based channel distributors have raised their prices for chip resistors though some major manufacturers have stressed they did not start the upward pricing trend.PCB makers uncertain about 2Q21 on looming variables: Taiwan-based PCB makers are optimistic about demand growth in the first quarter of 2021, but are uncertain whether the momentum will carry on in the second quarter.

South Korea's top-3 telecom carriers saw their wireless businesses' average revenues per user (ARPU) slip in the first three quarters of 2020 due to fierce competition for 5G subscribers, while their plan to establish 28GHz base stations will be delayed, according to Digitimes Research's finding.Although 5G commercialization boosted the top-3 telecom carriers' quarterly wireless business revenues during the first three quarters of 2020 compared to their corresponding quarters in 2019, their ARPU still declined due to the fierce competition among them to attract 5G subscribers.South Korea had over 70 million mobile service subscribers as of third-quarter 2020 with 4G users accounting for more than 80% and 5G services rising to 13.2%.The top-3 South Korean telecom carriers all saw over 14% of their subscribers being 5G users in the third quarter. Mobile virtual network operators (MVNOs) in South Korea, which were slower in offering 5G services compared to major telecom carriers, are the key factor dragging down South Korea's overall 5G penetration rate.At the end of 2020 or early 2021, South Korea's overall 5G service subscribers are expected to break 10 million with SK Telecom to have a chance of seeing over five million users and KT three million.With smartphone brands including Samsung Electronics, LG Electronics and Apple starting to release 5G devices in South Korea in October and local telecom carriers offering better subsidies, demand for 5G smartphones is expected to increase and boost the number of South Korea's 5G service subscribers in the fourth quarter.The South Korea government has confirmed that the top-3 telecom carriers together had built a total of 105,000 base stations at 3.5GHz nationwide as of the end of August 2020, and should achieve the goal of building a total of 150,000 units in 10 years earlier than expected.However, the telecom carriers are seriously behind for the target of building 15,000 base stations at 28GHz by the end of 2021.

Strong pandemic-fuled demand has resulted in shortages in a host of components, including MLCC. Yageo, a major passive components suplier, has only about two months of MLCC inventory, far below healthy levels, and the tight supply will not improve until after the Lunar New Year break in February. LCD panel shortages are also haunting second-tier TV vendors who focus on smaller size segments. Teh car market, hit hard by COVID-19 earlier this year, is recovering, with automotive chipmakers keenly placing orders with their suppliers.Yageo sees inventory stay below healthy levels: Yageo now has about two months of MLCC inventory, which is unlikely to reach healthy levels until after the Lunar New Year break, thanks to difficulty in recruiting new production employees before the holiday period in February, according to the passive component vendor.Second-tier TV brands grappling with panel shortages: Second-tier TV brands focusing on small-to-medium screen size segments face mounting pressure of insufficient supply from panel makers who are giving production priority to large-size applications, according to industry sources.Chip demand for automotive electronics gaining momentum: Chip demand for automotive electronics applications has been ramping up significantly since the fourth quarter of 2020 along with the gradual recovery of global car sales, which is expected to serve as a growth driver for the semiconductor supply chain in 2021, according to industry sources.

Robust demand for server-related hardward and software in the wake of the pandemic has boosted sales at Taiwan-based makers in this market segment. Digitimes Research estimates that Taiwanese makers will see server-related revenues grow 11% in 2020, with further growth lying ahead for them next year. The pandemic has triggered strong demand for an array of products and services, including game consoles. Production for Sony's PS5 is expected to reach as high as 18 million units in 2021, barring components shortages. The semiconductor sector continues to see tight supply, and silicon wafer supplier GlobalWafers is ready to raise prices to reflect tight capacity.Taiwan server-related product revenues to grow 11% in 2020, says Digitimes Research: Taiwan makers will see revenues from server-related hardware and software including motherboards, full-rack systems, networking equipment and storage equipment, increase by about 11% on year to reach over NT$1.5 trillion (US$52.88 billion) in 2020, higher than the 7% growth in server shipments in the year, according to latest numbers from Digitimes Research's Server Tracker.PS5 shipments to reach 16.8-18 million units in 2021: Production for Sony's PS5 game consoles is likely to reach 16.8-18 million units in 2021, fueled by additional capacity support from TSMC and backend services firms, according to industry sources.GlobalWafers to raise spot quotes for silicon wafers: GlobalWafers has run all its production lines for 12-, 8- and 6-inch silicon wafers at full capacity, according to company chairperson Doris Hsu. The silicon wafer supplier plans to raise its quotes offered to the spot market, judging from its tight supply that will persist through the first half of 2021, said Hsu.

Taiwan makers will see revenues from server-related hardware and software including motherboards, full-rack systems, networking equipment and storage equipment, increase by about 11% on year to reach over NT$1.5 trillion (US$52.88 billion) in 2020, higher than the 7% growth in server shipments in the year, according to latest numbers from Digitimes Research's Server Tracker.Taiwan's strong revenue growth in 2020 is due to the facts that clients' orders have continued to lean toward servers for high performance computing (HPC) applications and high-density rack server systems that feature high profit margins, while increasing demand for cloud datacenter centers has also driven up shipments for storage and networking equipment.Taiwan's server-related product revenues are expected to grow further by 7.6% on year in 2021 as demand from US- and China-based first-tier datacenter operators will continue to pick up, Digitimes Research estimates.Foxconn Technology Group (Hon Hai Precision Industry) is the largest supplier in terms of server-related product revenues in 2020 thanks to its global deployment of key component production and strong economies of scale.The company's robust shipments of cloud computing servers and datacenter network communication devices will also help the EMS provider maintain an over 50% share in Taiwan's server-related product revenues in 2020. Quanta Computer will be the second largest supplier and Wistron (including Wiwynn) the third in the year.In terms of server shipments based on motherboard counts, Inventec will remain the top supplier in Taiwan in 2020 with an annual growth of 15% and volumes of 3.36 million units. However, if combining Wistron with Wiwynn, the Wistron Group's volumes will be the highest with an on-year increase of 4%.Inventec's shipments are expected to rise more than 8% on year in 2021 due to keen orders placed by its US- and China-based datacenter clients.Although Dell and Hewlett-Packard Enterprise (HPE) are expected to cut their server orders for 2021 with their Taiwanese partners due to their enterprise clients reducing procurement in the wake of the coronavirus pandemic, cloud computing services are expected to continue driving up server shipments in the year, especially to the top-4 datacenter operators - Amazon, Microsoft, Google and Face - in North America.

Some market observers believe iPhone 12 may see order momentum decline in second-quarter 2021, but Digitimes' study of Apple's ecosystem has come to a more optimistic outlook, with components orders for the iPhone 12 to remain strong through first-half 2021. The iPhone supply chain will also see a newcomer for OLED panels - namely China-based BOE TGechnology, whose Taiwan-based partner, touch module supplier GIS, will also join the Apple ecosystem. In the gaming sector, AMD has secured more capacity support from TSMC's 7nm process for making PS5 chips, but actual shipments will depend on ABF susbstrate supply.iPhone 12 component order dynamics to last till 1H21: Some market observers are predicting that related order dynamics for the iPhone 12 will peak in first-quarter 2021 before heading for a downward adjustment. But the messages that Digitimes has managed to gather from Apple's ecosystem show that such a downtrun is unlikely.GIS reportedly enters iPhone supply chain: As China-based BOE Technology will soon begin to supply flexible OLED panels for iPhones, its Taiwan-based partner General Interface Solution (GIS) will supply corresponding integrated touch modules, according to industry sources.ABF substrate yield rate to affect PS5 chip shipments: AMD has been promised more 7nm foundry capacity at TSMC, but actual shipments for its PS5 chips will depend on the production yield rates for ABF substrates needed to make the customized processors for Sony's next-generation games consoles, according to industry sources.

China's makers have not slowed down the pace of capacity expansion and technology upgrades for AMOLED panels, although its smartphone industry has been affected by the coronavirus pandemic and the US trade restrictions against Huawei, Digitimes Research has found.New fabs or expansion projects being carried out in 2020 include a 6G line each by Visionox in Hefei, BOE Technology in Chongqing, and Tianma Microelectronics in Xiamen.China Star Optoelectronics Technology (CSOT) is expected to add a new 6G flexible AMOLED line, to be dubbed t5, along with the existing site of its t4 line in Wuhan.Two other smaller makers Everdisplay Optronics and Royole are planning to issue IPOs to raise additional funds to finance their respective expansion projects.Since Samsung Display has adopted an aggressive pricing strategy to promote its rigid AMOLED displays in the smartphone sector, China's panel makers have switched their AMOLED to roll out products for wearable or flexible applications.For product upgrades, Chinese panel makers are likely to develop rollable AMOLED panels targeting domestic and overseas sales. LG Display may prioritize its supply of flexible AMOLED panels to Apple in 2021 but may purchase rollable AMOLED applications from BOE Technology. Oppo may launch rollable smartphones built using rollable AMOLED panels from CSOT in the coming year.

Cyber security is a key issue for the era of big data, Internet of Things (IoT) and 5G. Cybersecurity Ventures has predicted that, globally, businesses in 2021 will fall victim to a ransomware attack every 11 seconds, and the cost will top US$20 billion.Digitimes recently had the opportunity to talk to hardware cyber security startup Dover Microsystems' CEO Jothy Rosenberg about how the company's solution - an oversight system - works and differs from others.Q: Could you briefly introduce Dover's solution?A: We are an IP licensing company. Our CoreGuard silicon IP resides on the silicon substrate next to the host processor and acts as an oversight system for the host processor - monitoring every instruction as it executes to ensure it complies with a set of security, safety, and privacy rules. If an instruction violates an existing rule, CoreGuard stops it from executing before any damage can be done. Updatable security, safety, and privacy rules, called micropolicies, maintain metadata about every piece of data and every instruction processed by the host processor, enabling CoreGuard to distinguish between good and bad instructions. Micropolicies are designed to stop entire classes of attacks, including buffer overflows, code injection, data exfiltration, safety violations and can even protect AI/ML systems from dangerous malfeasance.Q: What is the difference of the network security solutions between Dover and Synopsys from the early stages of a chip design?A: Synopsys and other EDA tool vendors are providing the SoC designer with tools to help prevent flaws in their HW design. Some have also acquired companies with technology to detect anomalies in bus traffic, such as the case with Siemens (parent company of Mentor Graphics) acquiring UltraSoC earlier this year. However, these tools do not protect any of the software running on the SoC - this is where CoreGuard is focused. CoreGuard is built on two critical observations: (1) today's processors are based on a simple architecture that prevents them from protecting themselves against attacks; and (2) all software has flaws that can be exploited by attackers coming in over a network. All processors sold today are still based on the 1945 von Neumann architecture. Although processors have advanced according to Moore's law and become faster, smaller, cheaper; they lack the ability to determine if each executed instruction is correct. Steve McConnell, author of Code Complete, states there are 15 to 50 bugs per thousand lines of source code on average, and according to the FBI approximately 2% of those bugs are exploitable. That means, in Android which has 15 million lines of code, there are at least 4,500 exploitable bugs. In Microsoft Office which has 40 million lines, there are at least 12,000 exploits. And a Ford F-150 which has 150 million lines contains potentially 45,000 different ways to take over the vehicle or steal private data from it. CoreGuard is what is classified by security researchers as an oversight system, watching each instruction a host processor is executing as it is happening and determining if that instruction is correct or not. And if not, then CoreGuard does not allow that instruction to complete, prevents any damage from being done, and notifies the host processor so it can take appropriate remedial action. The level of protection EDA vendors, like Synopsys, are providing does not overlap with CoreGuard. They are mutually beneficial as the goal is to protect our electronic systems with a defense-in-depth approach.Q: What is the level of acceptance of Dover's solution in fabless? Can you share with us some user cases/scenarios of your solutions?A: Our first publicly announced customer is NXP. NXP recognized the innovation and revolutionary approach of CoreGuard in protecting devices against network-based attacks right at the processor level. We are in discussion with several other fabless semiconductor companies, which have not yet been announced publicly.NXP is utilizing CoreGuard to create inherently secure processors for embedded devices. Additionally, we announced a partnership with Cadence Design Systems, to deliver secure processing for aerospace and defense applications using a CoreGuard integration with the Tensilica LX7 processor. Through this collaboration, customers can leverage the runtime security monitoring capabilities of CoreGuard that identify security policy violations and stop them from executing before any damage is done.We also announced a similar partnership with Andes Technology, a tech company in Taiwan, to deliver professional network security for their RISC-V core. Andes recognized that network security was a major concern for many IoT applications, which is why they decided to partner with Dover. We have been talking to quite a few large chip manufacturers over the past one and a half years, and those talks are coming to fruition. We are confident we can close significant deals next year.Q: Who are Dover's partners of IC manufacturers?A: We do not make hardware. We are only dealing with IC manufacturers for the purpose of getting test chips made. We are a part of an organization called "Silicon Catalyst"; they are in Silicon Valley. They were created to help semiconductor-related startups succeed. They've got a deal with TSMC and some other organizations, to make it easy to get into silicon inexpensively. TSMC is waiving all fees for this, but we still have to pay for services. They not only have a partnership with TSMC, but also a really good deal with Arm. We can get several different Arm cores for free to make test chips.Now, we are pursuing getting CoreGuard into an ASIC through our participation in Silicon Catalyst. Being proven in silicon is an important validation step for many of our customers, which is why it is a top priority, and we plan to do this in the first half of 2021 to get a few hundred test chips.Q: Who are your major competitors in this industry?A: We mostly focus on companies which are starting to do cyber security in hardware. We do not compare ourselves to software vendors, because in any kind of software, there are bugs that bad guys can exploit. There are two major areas people are doing cyber security in hardware. One is called "compartmentalization". For instance, Arm has TrustZone, Intel has SGX, and SiFive has WorldGuard. Those companies are marketing extremely aggressively. It is a valuable technology for sure. It keeps one set of untrusted software from being able to corrupt a trusted compartment (where Android might be running for example).The other message out there is "secure processor" which is encryption. Encryption is important. It keeps data that is moving from one place to another from being intercepted, stolen, or even looked at. But there is confusion. You cannot say, I have a "secure processor," so everything is safe, I am done. Because that cannot stop somebody from attacking you with a buffer overflow, a common kind of attack. For example, ransomware has buffer overflow attacks in them to take over and encrypt your disk, and then make you pay to get it back.We are compared to those two products. But when we look at a publicly-maintained CVE database of all attacks, maintained by Mitre Corp, out of the 84,000+ attacks that they categorized, compartmentalization only protects against a little over 2% of those attacks. Encryption and all the crypto types of things only stopped about 10% of those attacks. CoreGuard is capable of stopping 95% of those attacks. It is a completely new paradigm, a game changer. CoreGuard came out of a DARPA research program from 2010-2015. DARPA does not invest in things that have already been done or are easy. In fact, they sometimes only invest in things that seem impossible. Our CoreGuard technology originated from the DARPA CRASH program. Some of the Dover team members were among the 14 performers. We spent 4.5 years trying to understand how to stop those attacks that are wreaking havoc in our systems. That is why we are here, because we came up with something really good. After the DARPA years, we incubated for two years in a not-for-profit laboratory here in Cambridge MA, and officially spun out and became an independent company in mid-2017.Q: Is there any difference between the traditional chip manufacturing process and process using Dover's solution?A: No. The customer building an SoC brings in a processor (Arm, RISC-V, MIPS, Tensilica, Arc, or other) into their EDA tools and combines that with other IP for I/O, security, memory and so forth and then adds their secret sauce that differentiates them in the market. As they bring in the processor IP they will also bring in CoreGuard and place them side-by-side on the substrate. The entire process is identical with CoreGuard or without it.Q: What is the current funding status and plans for funding next year? What are your objectives for raising capital?A: We are currently raising a Series A round now, which we are looking to close in the first half of 2021. This round will allow us to significantly scale the company, expand the product's capabilities and expand sales and marketing initiatives to build awareness and demand. Post A round, our goal is to get CoreGuard into as many SoCs as possible, as quickly as possible. To do this we are going to expand sales and marketing and execute several initiatives to build awareness and demand for our CoreGuard technology. To date, we've been constrained with what we've been able to do with a small team and limited budget. Also in support of this goal, we are going to invest in the development of furthering CoreGuard's capabilities - opening up new opportunities and markets for Dover. These types of capabilities include, support for A-core, multi-cores, and Linux, as well as completing the integration of CoreGuard with additional processor architectures. In addition, we will be expanding our micropolicy suite to address the security threats relevant to specific vertical markets and we will begin the process of pursuing industry certifications.Q: What are the verticals that you are working with?A: We look at different markets and prioritize those that have large companies and those which are building their own chips. Industrial IoT, 5G infrastructure are two important markets that we are focusing on in 2020-2021, in addition to large semiconductor players. There are also other sectors, such as medical devices, consumer IoT, automotive, infrastructure, transportation, which we will explore in the future.Q: Will you enter the smartphone market?A: Some day. That will be very challenging. It's a very mature market. They are very constrained on power and physical space and have very complex software stacks. Our current implementation of CoreGuard is optimized for embedded systems with smaller software stacks. At present, we're focused on protecting embedded systems, which accounts for the vast majority of processors used in today's market.(Editor's note: Digitimes Research analysts Eric Chen and Jim Chien contributed ideas to the making of this interview)Dover Microsystems CEO Jothy RosenbergPhoto: Company

In 2021, there's opportunity for growth in many markets, especially automotive, 5G and IoT, and new component releases hitting the market. However, challenges lie ahead.The 2020 government shutdowns due to COVID-19 hindered global supply chains by either halting or limiting production. Despite most manufacturers finally up and running, another issue looms on the horizon - worsening shortages.Growing markets in 2021 and beyondThere are numerous market segments that will experience growth in the upcoming year, including the rollout of 5G, the rebound of the automotive sector, an increased need for datacenters and increasing reliance on AI and IoT by companies.The automotive industry, specifically, will have a big turnaround in 2021. Though automotive demand took a big hit in early 2020 due to the COVID-19 pandemic, it is now recovering and is forecasted to have strong growth in the second half of the coming year.The main driver of this growth is electric vehicles. Other key drivers of growth will be increasing consumer demand for vehicle comfort, the rising consumption of plastics in automotive production and increasing vehicle customization.The automotive interior materials market alone is expected to experience over 5% CAGR from now until 2026, while the aftermarket segment is predicted to see more than 6.5% CAGR in the same time span.The rollout of 5G is also anticipated to have a huge impact on the semiconductor industry as companies prioritize capacity allocation to 5G production. With the 5G network set as the catalyst to multiple technological revolutions, new devices containing higher performing components will be essential requirements.Initially, the 5G rollout may only lead to an increase in demand for chips with a higher baseline memory requirement, but in the coming years the massive number of new applications will go beyond just smartphones. The industrial application segment alone is predicted to experience 221% CAGR between 2021 and 2023, resulting in $497 million in semiconductor revenue.Other markets expected to continue growing in 2021 include the data mining industry and gaming industry. Ongoing demand in these industries will likely lead to increased demand for graphics cards, though this growth may be impeded by yield issues for Nvidia chips. The numerous recent product launches in the gaming industry has already put a strain on GDDR5 and GDDR6 supply, which is likely to worsen as both industries continue to grow.A hindered semiconductor industry in 2021Though there is rising demand from growing industries, various raw material shortages are leading to tight supply, extended lead times and increased pricing for many manufacturers and on a variety of components. This doesn't appear to have an end date in sight and is only thought to get worse in 2021.The ABF substrate shortage is an example of how one shortage can have a widespread impact on components. As a result of demand growth outpacing capacity expansion by 20% in 2020, rising prices have left customers scrambling to fulfill their production needs, especially for CPUs, GPUs, high-end ICs and peripheral products.These shortfalls are likely to widen as demand for 5G infrastructure, networking and high-end GPU and CPU applications outgrows capacity further. GPUs, for example, are expected to experience a 15-20% price increase in 2021 due to this worsening shortage.Another supply constraint expected to further disrupt the semiconductor market next year is the 8-inch wafer shortage, which originated in 2019. With production capacity currently operating at 99% from increased end-product demand, further pressure will be added in 2021 from the growing 5G industry, automotive industry and IC market.Because of the 8-inch wafer shortage, lead times have been worsening and pricing is on the rise. Richtek, for instance, has reportedly had lead times stretch from 4-6 weeks to 26+ weeks on a wide range of ICs, which are commonly used in computers and consumer end-products.Other manufacturers, such as LG, AUO and Innolux are also beginning to feel the effects of raw material shortages, particularly for glass substrates. With demand for LCD panels remaining strong, the glass substrate shortage has caused pricing increases of up to 70% above original price levels.Many manufacturers are competing for a variety of raw materials, including CPU and GPU makers in addition to logic IC and power management IC manufacturers. Because distributor inventories are under allocation, end-customer supply is very tight for a variety of components, which is likely to continue throughout 2021.The takeawayThere are many opportunities for growth in global supply chains going into 2021 created by the rollout of 5G and IoT, the return of the automotive industry and growing demand in data mining and gaming industries. Though rising demand should result in booming industries, numerous shortages could stunt growth and leave manufacturers fighting over resources.