TSMC has reported strong results for second-quarter 2020, thanks to continued robust demand for 5G infrastructure deployments and HPC-related products that was able to offset weaknesses in demand for other applications. Now the foundry house has raise its outlook for 2020, expecting sales growth of more than 20% for the year. Sources from the supply chain estimate that TSMC's wafer start shipments will see a double-digit percentage point gain in third-quarter 2020. The foundry house reportedly is also making Arm-based processors for Apple's next-generation Macs to be launched by year-end 2020p.TSMC expects 3Q20 revenue to increase 9%, raises outlook: TSMC expects to post revenues of between US$11.2 billion and US$11.5 billion in the third quarter of 2020, which is a 9.3% sequential increase at the midpoint. Gross margin and operating margin for the third quarter are estimated at 50-52% and 39-41%, respectively.TSMC wafer start shipments expected to post double-digit gains in 3Q20: TSMC's wafer start shipments are likely to post double-digit percentage point gains sequentially in the third quarter due to high capacity utilization rates enjoyed by the pure-play foundry house, according to sources from Taiwan's IC solution suppliers.TSMC to see orders increase for Arm-based Macs in 2H21: TSMC is expected to see orders for Apple's Macs based on its Arm-based silicon ramp up and contribute substantially to the foundry's wafer sales starting the second half of 2021, according to industry sources.

The coronavirus pandemic has hardly dented the business of the world's top contract chipmaker, and instead market observers believe TSMC will see strong results for the third quarter and the entire 2020, driven mainly by a ramp-up in 5nm and 7nm chip orders. And the foundry house is also seeing strong orders for its mature manufacturing processes. The handset market may be weak at the moment, but 5G smartphone penetration in China is rising, thanks to local vendors lowering prices to stimulate demand. Market watchers bullish on TSMC revenue outlook: Market watchers are generally optimistic about TSMC's sales performance in the third quarter and all of 2020, despite the ongoing coronavirus pandemic and tougher US sanctions against Huawei that may soon block the foundry from producing chips for its biggest China-based client.TSMC sees mature process capacity utilization pick up: TSMC has seen capacity utilization rates for 16nm and more mature processs pick up recently, and has demanded sufficient supplies from related materials providers through October, according to industry sources.Shipments of 5G smartphones gaining momentum in China: Smartphone shipments in the China market decreased 17% on year to 28.6 million units in June, with 5G models accounting for 17.5 million units or 61% of overall shipments in the month, according to media reports in China.

Taiwan is stepping up fostering startups with more innovations in the biotech sector aiming to build a major biotech and medicine R&D base in the Asia-Pacific region, with a focus on precision health and medicine, according to government sources.The government has listed biomedicine as one of the six core strategic industries for priority development in the next few years, and will significantly strengthen biomedical resources and anti-epidemic tech momentum, the sources said.Government officials said Taiwan's biomedicine industry will focus more on promoting precision health for people in all age groups through diverse aspects such as prediction, prevention, inspection, medication and care services.The officials stressed that along with the advancements of AI applications, precision medicine is emerging as a major trend and will continue to usher in new changes and advancements in healthcare services, with biobanks and relevant data to play a key role in biotech innovations and new products development.Taiwan now has a total of 32 biobanks with around 4.5 million specimens, providing unique biomedical resources to support the country's development of precision medicine. This, coupled with big data from the national health insurance databank, can attract multinational pharmaceutical firms to jointly develop biomedical drugs, the officials believe.Taiwan still lags in some advance medical technologies such as immunotherapy, cellular therapy, gene therapy, CAR-T and RNAi, the officials said, adding that the country can leverage its ICT advantage to support cross-domain cooperation with the biomedical sector in developing precision inspection technology and equipment, precision medicines, and personalized healthcare services.

Taiwan-based ICT firms have been keen on developing hardware, software or hardware/software-integrated products for smart healthcare.Wistron Medical Technology, a subsidiary of ODM Wistron, has developed exoskeleton robots and biometric devices, invested in clinical information system provider Maya International, cooperated with a hospital to develop a hemodialysis system and with another to develop a smart hospital management system.IC design house FocalTech Electronics' subsidiary FocalTech Smart Sensors has worked with National Taiwan University Hospital's branch at Hsinchu Biomedical Science Park to develop a smart biometric solution, with measurement data to be combined with the hospital's medical resources to develop a smart medical care ecosystem.Asustek Computer has applied its IT hardware/software capability and R&D of AI, cloud computing and big data to development of smart wearables and smart medical care solutions, and has partnered with several startup businesses and medical device suppliers to form a smart medical care alliance.Notebook and server ODM Quanta Computer has been engaged in precision medicine, focusing on development of algorithms and medical devices as well as application of cloud computing and big data analysis. Quanta has set up an AI lab to develop deep neural network learning, and worked with many hospitals developing telemedicine, smart ward solutions and medical equipment.

Kingwaytek Technology, a provider of digital maps for car navigation, is testing autonomous driving using C-V2X wireless communication infrastructure at an open experimental field in northern Taiwan, according to company president San Huang.This is the first case of using C-V2X to test autonomous vehicles in Taiwan.C-V2X, currently based on 4G MEC (multi-access edge computing) architecture, is used to provide the real-time time length of traffic lights for autonomous vehicles to have enough lead time for making driving decisions, Huang said. Image recognition of traffic lights runs the risk of misrecognition due to reflections or weather conditions, and it cannot tell how long a traffic light will last, Huang noted.Sensing devices, including LiDARs, radars and automotive cameras, have physical limitations, but 5G's low latency and high data transfer speed will allow C-V2X, copuled with edge computing, to shorten the minimum distance allowable for making response or hike the maximum running speed, Huang noted.Kingwaytek president San Huang and an autonomous vehicle being testedPhoto: Yihan Li, Digitimes, July 2020

IT companies generally believe server demand will remain robust in second-half of 2020, thanks to the persistent coronavirus pandemic. For Wistron, it is set to increase server shipments to Fujitsu, which started shifting orders to the ODM from Quanta Computer in 2019. IT firms are mixed about the outlook of the notebook market in the second half, but Acer remains optimistic. The popularity of QLC NAND-based SSDs among servers and other data-intensive devices will be rising due to a fall in NAND flash prices later in the second half of 2020.Wistron enjoys ramp-up in orders from Fujitsu: Wistron obtained orders for servers from Fujitsu in 2019, and has since seen orders ramp up, with shipments set to expand in the second half of this year, according to industry sources.Acer optimistic about notebook demand in 2H20: Acer is optimistic about its notebook sales in the second half of 2020, with abundant orders in hand waiting to be fulfilled, according to company chairman and CEO Jason Chen. The visibility of orders has now extended to 2021.Demand for QLC NAND memory set to boom: The adoption of QLC (4bits/cell) NAND memory is set to grow rapidly starting the second half of 2020, thanks to rising demand for data-intensive applications demanding large-capacity, efficient and cost-effective storage, according to industry sources.

Since IC was invented, the semiconductor industry has undergone four stages of structural changes.In the 1950s-1970s firms such as IBM and Motorola had to handle product design, fabrication and packaging all on their own. In the 1970s-1990s, production for system products and semiconductors was separated. And since the 1990s, IC design, wafer foundry and backend segments have been operating separately. This is basically how the semiconductor industry works today. But starting in 2010, the line of division has been blurred again, with foundry also doing packaging work. TSMC has been able to beat Samsung to Apple's chip orders partly thanks to its packaging tenolohy.With the line blurred, competitiveness will hinge on one's capability of forming with core clients new ecosystems.

It is uncertain how strong the stay-at-home demand for notebook devices will remain in the second half of 2020, but sources from the supply chain have claimed that Apple is set to increase its new MacBook Pro orders in late third-quarter 2020. Taiwanese PCB suppliers also expect strong shipments to the notebook and server sectors in the third quarter. Memory maker Nanya Technology also expects a ramp-up in revenues generated from the server sector.Apple to see over 20% on-quarter growth in 3Q20 notebook shipments: Apple is set to significantly increase its new MacBook Pro orders in late third-quarter 2020 and will see its overall MacBook shipments rise over 20% sequentially in the third quarter, according to sources from the upstream supply chain.Notebook, server PCB shipments to stay robust in 3Q20: Taiwan's rigid PCB makers Tripod Technology, HannStar Board and Gold Circuit Electronics (GEC), after registering significant revenue increases in the second quarter of 2020 on strong shipments for notebook and server applications, are optimistic that their shipments for the third quarter will remain strong with abundant orders in hand waiting to be fulfilled, according to industry sources.Nanya steps up process technology transition: Taiwan-based Nanya Technology is looking to move its in-house developed first-generation 10nm process technology to risk production later this year, and is engaged in the development of its second-generation 10nm process that may be ready for production slightly ahead of schedule, according to the DRAM chipmaker.

ODMs generally expect notebook shipments to drop sequentially in third-quarter 2020 after a wave of robust demand in the previous quarter in the wake of surging pandemic-triggered stay-at-home needs. But Quanta Computer will be an exception, as its notebook shipments will continue to rise, driven by strong orders for Chromebooks. Beneficiaries of the stay-at-home needs also include Asustek and Gigabyte, the former recording a 30% rise in second-quarter 2020 sales thanks to strong sales for PC-related products, and the latter hitting records sales for the period due to strong demand from the server sector. Display panel makers have also been receiving a boost from robust orders for IT applications.Quanta to see shipment growth in 3Q20 thanks to Chromebooks: Quanta Computer expects its notebook shipments to grow sequentially in the third quarter and may be the only ODM to see increases with Chromebooks being the key growth driver.Asustek 2Q20 revenues surge nearly 30%, Gigabyte hits record: Asustek Computer saw its revenues increase nearly 30% on year in the second quarter of 2020, while fellow motherboard and graphics card vendor Gigabyte Technology's revenues climbed to a quarterly high.LCD panel makers poised for strong sales in 3Q20: Having experienced sequential revenue growth in the second quarter of 2020, most Taiwan's flat panel makers are poised to enjoy further growth in the third quarter, buoyed by strong demand for IT panels as well as rising TV panel prices, according to industry sources.

VR device developer XRSpace and Taiwan External Trade Development Council (TAITRA) have jointly develop a virtual exhibition platform based on 5G and XR technologies in a bid to help vendors tap international markets.The platform includes 3D scenarios, exhibited objects, virtual exhibition staff members, meetings and tools for remote communications, said XRSpace founder Peter Chou, who was HTC's CEO.TAITRA chairman James Huang said his council will help Taiwan makers in digital transformation and aims to become a leader in digital international marketing.XRSpace uses XR, AI, cloud computing, computer vision and gaming technologies to create animations and VR social scenarios.XRSpace has recently introduced XRSpace Manova, a 5G-based mobile VR device equipped with Qualcomm Snapdragon 845. The device is driven by gestures without control devices.TAITRA chairman James Huang (left) and XRSpace founder Peter ChouPhoto: XRSpace5G XR virtual exhibition platformPhoto: XRSpace