The coronavirus outbreak is expected to drive many manufacturers, especially those in the electronics sector, to accelerate production relocation from China and rearrange their capacity globalization deployments, but China will remain a global manufacturing powerhouse with unrivalled advantages, including huge domestic demand.In the wake of the US-China trade rows and the epidemic, many Taiwanese firms with manufacturing operations in China have become determined that they should move some production back home or Southeast Asia to diversify risks.But still many other Taiwanese makers are increasing investments in China, especially building new plants in central and western China, seeking to capitalize on policy incentives and abundant talent there to better serve Chinese clients.Many researchers now expect China's GDP growth to reach only 5.5% in 2020 due to impacts of the virus epidemic, but its status as the world's second largest economy and most populous country with enormous domestic demand will still attract large sums of investments.Production localization - a trend ganing momentum among vendors - will still motivate firms to incease their production capacity in China.5G business opportunitiesThe 5G commercialization is set to usher in immense business opportunities for related segments including handsets, base stations, cloud servers and new energy vehicles in the China market, and even China's traditional auto industry is believed to bring new crucial opportunities for components makers.For instance, high-tier connectors will be increasingly demanded to meet high-frequency, high-speed and high-power transmission requirements for 5G and automotive applications, and Taiwanese makers will be in pole position to benefit as their Chinese peers are only technically capable of manufacturing lower-end connectors for general PC, notebook or handset applications.Meanwhile, China's policy support to bolster upgrades and transformations of its local industries is also creating significant business opportunities for Taiwan's makers of automated and smart manufacturing equipment.Besides huge domestic market demand, a series of tax, land and manpower supply incentives offered by the governments of central and western Chinese cities are also attracting supply chain players, especially those gradually losing competitiveness in their operations in coastal cities, to extend their investment reach to the inner land areas. Moreover, investors there can also more easily land orders from Chinese brand vendors.With their plants increasingly incorporating automated and smart production systems, manufacturing enterprises now set eyes on the availability of sufficient higher-end technical talent produced locally.Supporting shipments to Southeast AsiaFurthermore, while many manufacturers have relocated their production in China to Southeast Asia to support shipments to the US amid the US-China trade tensions, some others are also mulling increasing production capacity in China to support shipments to Southeast Asia and even other Asia Pacific areas.The ever-expanding supply chains in Southeast Asia will significantly stimulate economic growth and consumer demand in the regional markets, but the overall supply capacity there alone will be unable to support shipments to the US and the region simultaneously.Taiwanese investors in China can also choose to set up new production capacity in Taiwan, but such a choice has its limitation. As Taiwan is now not a member of either CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership or RCEP (Regional Comprehensive Economic Partnership), Taiwan-sourced shipments to Southeast Asia, Northeast Asia and other Asia Pacific areas cannot enjoy the same preferential tariffs applicable to shipments originated from China, the sources indicated.Accordingly, as China boasts distinct investment advantages not paralleled by any other parts of the world, it will remain a top destination for investments.

The flat panel industry has been hit hard by the coronavirus outbreak, as China-based makers have major production lines in Wuhan, the epicenter of the epidemic. And as global panel production is set to be cut by 20% in February, panel prices are also rising. The epidemic has disrupted productions across almost all ICT sectors, leaving many firms without componets and material supplies. Taiwan-based passive components maker Yageo has disclosed that its MLCC and chip resistor inventory has reached 10-year low levels, and it is mulling raising prices. But firms have not been deterred by the virus from advancing their production technologies. Memory makers Nanya and CXMT are gearing up for 10nm-class chip production.Virus cutting panel production by 20% in February: The impacts of the coronavirus outbreak are expected to exact a toll of 20% in global flat panel output in February, with prospects to see the ratio alleviate to 5-10% in March when more workers return to work in China, according to industry sources.Yageo sees MLCC, chip resistor inventory hit 10-year low: Passive components maker Yageo has seen its inventory for MLCCs and chip resistors hit the lowest levels in nearly 10 years and will properly raise prices to reflect increased costs, according to company chairman Pierre Chen.Nanya, CXMT gearing up for 10nm-class chip production: Nanya Technology and Changxin Memory Technologies (CXMT) are both gearing up to enter volume production of their 10nm-class DRAM chips in the second half of 2020.

The global server shipments so far have only been mildly affected by labor shortages in the wake of the coronavirus outbreak, but if the epidemic cannot be contained by the end of March, the server supply chain is expected to be significantly undermined by components shortages, according to Digitimes Research.The server industry has so far seen manageable impacts from China's coronavirus outbreak, as most vendors had prepared extra inventory prior to the Lunar New Year holidays, during which they had kept parts of their workforces at factories to continue production, Digitimes Research's data shows.The inventory build-up for and production during the Lunar New Year holiday were meant to satisfy rising orders from North America's large datacenter players, which has sheltered server ODMs from severe impacts in terms of labor and components shortages that other IT sectors have been suffering.Most server ODMs and component makers were able to ramp up their utilization rates at factories in China to 50-70% shortly after the end of the holiday period - extended due to the outbreak. With still sufficient components supply, makers of CCL are currently seeing slightly better production recovery rates than PCB makers.However, chemical materials and passive components may face tight supply as most of them are provided by small China-based suppliers who are currently having problems resuming production because of a lack of resources to enable their anti-virus measures, and they have yet to receive approval for returning to work local governments.Although the supply chain is only expected to see limited impact in the short term, shortages of labors and components will be a problem for the server industry if the outbreak cannot be effectively contained by the end of March. If that happens, server makers' shipments may slip by over 10% sequentially in the first quarter of 2020.

Spatial Topology Technology has combined its indoor positioning system with Bluetooth trackers developed by Tracmo and smart thermometer patches produced by iWEECARE to form a solution that monitors real-time body temperatures of people who are suspected of COVUD-19 infection and isolated for quarantine at their homes or government-designated places, according to Spatial Topology.Spatial said the solution is useful in situations, such as the ongoing coronavirus outbreak, where the whereabouts and health of people under quarantines have to be closely monitored.Smart thermometer patches keep measuring their body temperatures and automatically report results to quarantine management centers, Spatial said. If the smart patches are out of detection reach of indoor positioning system in combination with Bluetooth trackers, this means that the person being monitored have breached the isolation, and a warning will be automatically sent to quarantine management centers.The solution can minimize quarantine or medical staff members' immediate contacts with potential patients and reduce risks of being infected, Spatial noted.

Taiwan's PC monitor shipments are expected to drop 15% sequentially in the first quarter of 2020, as some clients had demanded advanced shipments a quarter earlier and the effects of the coronavirus outbreak will continue to impact production, Digitimes Research says.Prior to the outbreak, Digitimes Research had forecast that Taiwan's PC monitor shipments would reach 22.04 million units in the first quarter of 2020, down 5% from a quarter earlier.Shipments of Taiwan's PC monitors in the fourth quarter of 2019 declined by a sequential rate that was lower than expected, and the amount represented an increase of 5.6% from a year earlier.While the production of above 27-inch models began gaining momentum in the fourth quarter of 2019, shipments of 22- to 26-inch monitors remained the mainstream segment, with 23.x-inch models being the most popular.With respect to individual companies, shipments from Wistron posted the highest growth both sequentially and annually in the fourth quarter thanks to significant follow-up orders from HP and lifted its vendor ranking one notch to fifth place, replacing Samsung Electronics.

The coronavirus outbreak is hitting hard the smartphone market, with Chinese brand vendors facing mounting inventory pressure in their domestic market. Xiaomi reportedly is cutting IC orders for its Taiwanese suppliers. Huawei is no better off than its peers but it faces more trouble from US trade sanctions that could leave it without sufficient foundry capacity support. Huawei reportedly is turning to China-based fabs for support. Meanwhile, HDI PCB suppliers still see significant orders from the handset sector for the first quarter, but many in the semiconductor industry believe that the secodn quarter will take a turn for the worse. Xiaomi reportedly cutting back IC orders: In the wake of the coronavirus outbreak that have disrupted business as well as consumer activities, China-based smartphone vendor Xiaomi has been cutting back orders to its IC suppliers in Taiwan, with fellow vendors Oppo and Vivo likely to follow suit, according to sources from Taiwan-based IC suppliers.Huawei places more chip orders with China fabs: Huawei has placed more chip orders with fabs in China, including TSMC's 12-inch wafer plant in Nanjing and SMIC's facilities, over the past half year, according to industry sources.HDI PCB makers see normal shipments to handset vendors in 1Q20: Taiwan-based HDI PCB specialists have sustained normal production and robust shipments for handset mainboard applications in line with strong customer demand despite the coronavirus outbreak, but they may face cutbacks in orders from handset vendors in the second quarter, according to industry sources.

CTBC Bank has signed with AI technology research center and IoX Center - both under National Taiwan University (NTU) - for one-year cooperation for applying AI technology to banking operation.The cooperation focuses on natural language processing and computer vision, according to CTBC president James Chen. CTBC uses robots to process about half of customers' phone calls and the remaining rely on answers by call center staff, Chen said. CTBC hopes the cooperation can upgrade natural language understanding to induce customers' needs from their conversation, Chen noted.Natural language processing can be used to interpret what customers say in phone calls and extract key information such as plans to buy real properties or travel abroad, and CTBC can accordingly push precision marketing, Chen indicated, adding that semantic interpretation of customers' complaints can push CTBC to improve services.CTBC uses much labor in screening news reports regarding anti-money laundering and hopes that AI-based algorithms can quickly screen, synopsize and categorize large numbers of such reports, Chen said.Computer vision will be used to develop models of recognizing human micro-expressions and emotions and establish related databases, Chen noted. For example, such models can detect customers' impatience of waiting for service and thereby prompt staff members to handle appropriately.

CoolBitX, a blockchain security company that is building the infrastructure necessary to close the gap between the mainstream market and crypto industry, has announced it has closed US$16.75 million in its Series B funding round, led by Japan's financial group SBI Holdings, with participation from Taiwan's National Development Fund, Korean crypto exchange BitSonic, and another Japanese financial group Monex.With this funding, CoolBitX said that having rooted its market dominance in Asia, it is expanding the Sygna product line's presence beyond the APAC region as the first-to-market FATF-compliant solution for virtual asset service providers (VASPs) around the world. Regarding Bluetooth-enabled hardware wallet CoolWallet S, CoolBitX continues to innovate its flagship product with focus on top-of-the-line security, functionality, and usability.Michael Ou, CEO of CoolBitX, said: "We are thrilled and encouraged by the support that we have received from our wider community of investors and partners on our journey. The blockchain and cryptocurrency industry is at a critical juncture. In the global blockchain race, the rate of adoption and innovation in Asia is undeniable, witnessed by regulatory developments and investments in the past year. Jurisdictions that have passed bills defining a clear set of rules for the industry - especially those surrounding KYC and AML - have seen major players in traditional finance enter the space, providing a clear blueprint for regulators around the world. Through Sygna and CoolWallet S, we're proud to develop the tools and infrastructure necessary to bridge the gap between the mainstream market and crypto industry. This latest funding round is a testament to our vision to help the industry mature and foster the mass adoption of virtual assets."In June 2019, the Financial Action Task Force (FATF) released its latest standards for combating money laundering and terrorist financing, requiring VASPs of FATF member countries to comply with Recommendation 16, aka the "Travel Rule." With this rule, crypto exchanges must collect and transfer customers' personally identifiable information (PII) during transactions. CoolBitX launched Sygna Bridge in October 2019, providing VASPs with a market-ready solution so that they may be fully FATF compliant.More than 10 exchanges have signed MOUs with CoolBitX, joining a consortium of VASPs to begin or consider implementing Sygna Bridge.Yoshitaka Kitao, president and CEO of SBI Holdings, said, "As one of the early investors in CoolBitX, SBI Holdings is happy to see the breakthroughs made by the CooBitX team to drive cryptocurrency adoption forward. As such, we are delighted to participate in our second tranche of investment in CoolBitX. The borderless nature of digital assets requires a solution that isn't bound by geographical boundaries and we are proud to partner with CoolBitX on their journey to bring a secure and easy-to-implement system to the world."Founded and based in Taiwan in 2014, CoolBitX has been at the helm of Taiwan's crypto and fintech revolution. As a FinTech entrepreneur, Ou is immersed in the development of Taiwan's fintech industry. Ou is also chairman of SmartDisplayer Technology, a 20-year old family business and publicly traded company that pioneered banking security solutions.Chen Mei-ling, minister of the National Development Council, "CoolBitX and Michael Ou have been a steady presence in the growing Taiwanese blockchain space. The National Development Fund of Taiwan aims to accelerate innovation and promote economic transformation to support the growth of the Taiwanese economy. CoolBitX is a highlight of the Taiwanese startup community. We are proud to support a home-grown Taiwanese firm like CoolBitX as it continues to accelerate its growth onto the global stage."Michael Ou, CEO of CoolBitXPhoto: Michael Lee, Digitimes, February 2020

Taiwan-based startup Millilab is dedicated to development of mmWave radar sensor solutions for non-automotive use, said company founder and CEO Lin Yu-cheng.With R&D staff consisting of RF, antenna and IC engineers, Millilab focuses on frequency bands of 24GHz and 60GHz for mmWave radar sensor solutions to detect range and speed, Lin noted. Millilab, founded in January 2019, has developed a 24GHz model for use in IP surveillance cameras and smart doorbells, and it is being validated by two Taiwan-based potential clients, Lin indicated.mmWave radar sensors can reduce operating time and cost for IP surveillance cameras through helping operators hike accuracy levels for cameras and users control operating time, Lin said.Due to advantages of high transfer speeds and broad bandwidth, mmWave can meet demand for low latency and multiple connection in many scenarios of 5G application.60GHz mmWave radar sensors features people-counting function - detecting their locations and movements in a certain scope of space, Lin noted. Some companies engaged in image recognition and video conferencing are interested in cooperating with Millilab, Lin indicated.In fire-fighting scenarios with thick smoke, mmWave radar sensors can make up for deficiency in cameras' vision of objects like human bodies and thereby can be used to judge which floors and which portions of them need active search to enhance rescue.Millilab's mmWave radar sensorsPhoto: Company

The coronavirus outbreak is disrupting production at both assembly plants and their upstream suppliers, with components prices rising. Now MLCC and chip resistor prices are expected to increase throughout 2020. Memory pricing is also expected to rise, as the quickly spreading coronavirus in South Korea has cast a cloud over production at major DRAM and NAND flash suppliers, Samsung and SK Hynix. Despite the rising price trend, notebook ODMs remain cautious about replenishing their components inventories, as the utilizaation rates at their production plants in China remain low. Server makers may not be hit hard by the outbreak, as manhy of their production lines are outside of China. But their clients are asking them to shift more of their server production out of China, preferably to Taiwan. MLCC, chip resistor prices set to rise through 2020: Prices for MLCCs and chip resistors are expected to rise through the fourth quarter of 2020 as supply will increasingly fall short of demand for 5G applications while fallouts of the coronavirus outbreak are gradually surfacing, according to industry sources in Taiwan.Uncertainty grows over global memory chip supply: The rapid spread of coronavirus in Korea has raised increasing concerns about global supply of memory chips in 2020 as Korean makers, Samsung Electronics and SK Hynix, account for 73% global output of these devices, according to industry sources.Notebook makers cautious about components replenishment amid price hikes: Notebook makers are turning cautious about purchasing some specific components such as MLCCs and chip resistors that are running low in inventory and facing price hikes, as the purchases may push up their costs amid epidemic-induced uncertainties over capacity utilization and terminal demand, according to industry sources.ODMs asked to install additional server production capacity in Taiwan: ODMs have seen more requests from their server clients for installing additional SMT lines in Taiwan as China's coronavirus outbreak has been impacting server supply from the country, with the development of the US-China trade tensions being another key factor, according to sources from the upstream supply chain.