The coronavirus outbreak is definitely having short-term impacts on the supply chain in China. The memory sector was heading for recovery before the outbreak, with prices on the rise. Now memory prices are likely to rise at a slower pace as clients in China are more reluctant to fill their stocks. For Taiwanese ASIC vendors, shipments in first-quarter 2020 may be affected by the outbreak, but their clients in China have assured them that overall orders will remain significant. In the notebook maket, global shipments are expected to drop in the first quarter of 2020, according to Digitimes Research.Memory prices to rise at slower pace: Memory chip prices are likely to rise at a slower pace in February, as buyers in China are holding a wait-and-see approach, according to industry observers.Taiwan ASIC makers see little impact on China orders despite outbreak: Taiwan-based ASIC solution suppliers have to delay postpone shipments to Chinese clients in the meantime amid the coronavirus outbreak, but their longer-term orders from China will remain unaffected, as clients there will continue to reduce reliance on US suppliers of vital IC components, according to industry sources.Digitimes Research: Global notebook shipments to decline in 1Q20: Global notebook shipments were weaker-than-expected in the fourth quarter of 2019 due to Intel's ongoing CPU shortages and major brands stopping stocking extra inventory in the wake of easing US-China trade tensions. However, annual shipments in 2019 still grew 4.1% on year, according to Digitimes Research's notebook tracker.

Global notebook shipments were weaker-than-expected in the fourth quarter of 2019 due to Intel's ongoing CPU shortages and major brands stopping stocking extra inventory in the wake of easing US-China trade tensions. However, annual shipments in 2019 still grew 4.1% on year, according to Digitimes Research's notebook tracker.Seasonality, continuous shortages of Intel CPUs and the fact that the replacement trend of Windows 10 models in the enterprise segment has reached an end will result in global notebook shipments slipping by a double-digit percentage sequentially and a drop on year in the first quarter of 2020, estimates Digitimes Research.Leading brand Hewlett-Packard (HP) is expected to suffer from a dramatic shipment decline in the first quarter of 2020 because of an internal business reshuffling, unclear strategy for its new products, high channel inventory and tight CPU supply.Second-place Dell will also see a slip in first-quarter shipments because of seasonality. The proportion of Dell's outsourcing to Taiwan-based ODM is also expected to rise slightly in the quarter. As most enterprises have already completed substituting their old PCs, demand from the enterprise segment in the first quarter may be weaker than that of the consumer one.Asustek Computer is expected to remain the fourth-largest brands worldwide in the first quarter, but the company has continued to be seriously undermined by Intel's CPU shortages as the company has not been keen on adopting AMD's solutions.ODM Compal Electronics will see its share in Taiwan's overall notebook shipments rise in the first quarter thanks to increased orders for enterprise notebooks from HP. However, Inventec's share will slip due to losing HP's orders.The analysis does not take into consideration of the impact from China's coronavirus outbreak. Currently, Taiwan ODMs' plants in China and most of the country's logistic systems are in suspension and are unlikely to resume operation until February 10. With over 90% of notebooks manufactured in China, global notebook shipments may dip another 10-20% from the current estimation.

China-based handset makers shipped a total of 194 million smartphones worldwide in the fourth quarter of 2019, up 0.6% on quarter but down 4% on year, Digitimes Research has found.Smartphone shipments from Chinese vendors will continue to fall on a yearly basis in the first quarter of 2020 as the local economy and job market in China will remain weak and the replacement demand for 5G models has yet to emerge. Their overseas shipments will also be trending downward amid unfavorable market conditions.It will be particularly difficult for Chinese handset vendors to ramp up their shipments to retail channels in China in the first quarter due to higher inventory levels that channel operators built up in the previous two quarters.While managing to maintain its status as the top handset vendor in China, Huawei saw an annual decline in overseas shipments in the fourth quarter of 2019 after losing Google's GMS (Google Mobile Services) support.Overall shipments from three other top-four vendors - Xiaomi, Oppo and Vivo - posted both sequential and yearly growths in the fourth quarter thanks to robust overseas shipments.

Smartphone AP shipments in China reached a total of 197 million units in the fourth quarter of 2019, down 5.9% on year and 7.7% sequentially with volume for the whole year arriving at 776 million units, down 3% on year. As smartphone brands were cautious about their AP inventory levels, their order pull-in in fourth-quarter 2019 preparing for the Lunar New Year shopping was not very strong, according to Digitimes Research's latest report about smartphone AP shipments in China.Shipments in the first quarter of 2020 are estimated to drop to 146 million units due to China's weakening economy and not yet fully completed 5G infrastructure as well as a lack of a killer application and government subsidies, Digitimes Research's numbers show. The coronavirus outbreak is further dampening demand.Since consumers are anticipating cheaper 5G smartphones in the second half of 2020, significant replacement trend has not yet emerged.Qualcomm, MediaTek and Hisilicon are now shipping both 4G and 5G APs, which will significantly increase shipments of APs made via 7nm/8nm processes and raised their shipment proportion to 36.7% in the first quarter of 2020.Hisilicon is expected to suffer from a dramatic shipment decline in the first quarter of 2020 as Huawei, its key client, has high smartphone inventory level as a result of the smartphone brand's keen order pull-ins in the second half of 2019 to achieve annual target of 240 million units.Qualcomm and MediaTek are both expected to see rising shipment shares in the quarter, but MediaTek is expected to gain advantages in the 5G/4G AP competition against Qualcomm thanks to its APs' high price/performance ratios.To ease off its disadvantages, Qualcomm has recently slashed the price of its Snapdragon 765 5G AP, but the price cut is unlikely to start benefiting Qualcomm's shipments until the second quarter.

Huawei is the top smartphone vendor in China. But its sales have been under much pressure, first from the US trade ban, and now the coronavirus outbreak that has promised to dampen 5G phone replacement demand. Huawei is set to see major impacts. But construction of 5G infrastructures continues despite the outbreak. IC distructors expect the order momentum for chips and components used in 5G base stations to last for at least 2-3 years. And even Huawei's supply chain partners have asked optical components suppliers to deliver shipments as soon as they resume production next week.Huawei facing extra pressure on smartphone sales: Huawei is facing added pressure on its smartphone sales in 2020 as rising handset inventory levels in China's channels are being compounded by the coronavirus outbreak, according to sources at Taiwan's handset supply chain.Chip demand for 5G infrastructures remains significant: Taiwan-based IC distributors WPG Holdings and WT Microelectronics, despite the coronavirus outbreak in China, continue to see significant demand for chips and components used in 5G base stations and infrastructures, and such momentum is expected to last at least 2-3 years, according to industry sources.Optical devices makers asked to step up shipments for China 5G base stations: The locakdown of Wuhan, the epicenter of coronavirus outbreak and China's production hub for optical communications components, may dent the construction of 5G base stations in the country, but Taiwan's optical semiconductor devices makers have been asked by their Chinese clients in the supply chain of Huawei to deliver shipments soon after they resume operations on February 10, according to industry sources.

Smartphone shipments to the China market are expected to fall over 10% on year in the first quarter of 2020 affected by seasonality, insufficient supply of 5G models, high inventory levels in the channels and the ongoing coronavirus outbreak, according to Digitimes Research.Sales of smartphones in China were weak in the fourth quarter of 2019 as macro-economic conditions were shaky amid the bruising trade dispute with the US, sales of 5G models were slackened due to their high pricing, and telecom operators were not offering meaningful subsidies for the purchases of 5G models.Overall smartphone shipments to the China market slid 1.5% on quarter and 7.2% on year in the fourth quarter of 2019, Digitimes Research has found.Huawei, Vivo, Oppo, Apple and Xiaomi were the top-five brands in the order in China in the fourth quarter, with their combined market share reaching 95.9%, down 0.2pp from a quarter earlier.Apple saw its iPhone shipments increase 40% sequentially in China in the fourth quarter, replacing Xiaomi as the fourth-ranked player in the market. Huawei also posted a sequential 40% shipment growth in the quarter, while shipments from Vivo, Oppo and Xiaomi continued to wane.

Many Taiwan-based IT firms are feeling the heat from the coronavirus outbreak that is delaying their production from returning normal following Lunar New Year. But TSMC and UMC have revealed that their fabs in China have been running as usual. Despite the foundry houses' reassuring revelations, many Taiwanese IC designers have turned cautious about their first-quarter 2020 performances, with some already lowering their sales guidance. For the displays industry, the virus-imposed lockdown of Wuhan may have serious consequences, as the Chinese city is home to several major LCD and OLED panel fabs of China-based makers.TSMC, UMC say production in China remains normal: Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics (UMC) have both said that production at their fabs in China stays on track and has not been affected by the coronavirus outbreak.Taiwan IC design houses turn cautious amid coronavirus outbreak: Taiwan-based IC design houses have turned cautious about customer orders particularly orders for the China market due to the coronavirus outbreak, with some already revising downward their sales guidance for the first quarter by 5-10%, according to industry sources.Coronavirus outbreak likely to complicate global panel supply: The lockdown of Wuhan due to the coronavirus outbreak could impact global panel shipments as the Chinese city is one of the major production bases for a number of China-based panel makers.

The Lunar New Year holidays in Taiwan have ended but many are not returning to work as usual because of the the coronavirus outbreak in China. Many IT firms have allowed its managers to delay their return to China, and Foxconn has decided its production in China will not resume until February 10. But a report from China claims that Wuhan-based memory startup Yangtze Memory Technologies (YMTC) has not seen shipments affected by the outbreak. At any rate, the outbreak may be giving manufacturers more motivation to move their production out of China, in addition to the US-China trade tensions. Pegatron will further ramp up its capacity expansion in Indonesia and Taiwan in 2020.Taiwan supply chains stay vigilant against coronavirus outbreak: Many Taiwan-based firms with manufacturing operations in China are taking precautionary measures to minimize impacts of coronavirus outbreak that has locked down the Chinese city of Wuhan.Wuhan chipmakers reportedly say shipments remain normal amid coronavirus outbreak: Memory startup Yangtze Memory Technologies (YMTC) and its 12-inch foundry subsidiary Wuhan Xinxin Semiconductor Manufacturing (XMC) have both claimed their chip deliveries remain normal despite coronavirus outbreak locally, according to a report by a Chinese news outlet.Pegatron to further ramp up capacity in 2020: Pegatron will continue its expansion projects in 2020, with plans to further ramp up the capacity of its plants in Batam, Indonesia and in Kunshan, China, as well as building new production and R&D facilities in Taiwan, according to company CEO and president SJ Liao.

Apple reportedly is looking to adopt scissor switch keyboards in its new 13.3-inch MacBook Pro and new iPads slated to be available later in 2020 and the strategy should benefit their Taiwan-based component suppliers. Meanwhile, hinge makers expect clients' hinge orders for their foldable smartphones to pick up in the second half of 2020, while Taiwan's IC backend houses are expanding capacity to satisfy demand for more complex chips.Apple new iPad lineup reportedly to feature scissor switch keyboards: Apple is likely to extend the adoption of glowing scissor switch keyboards to its new iPad lineup, with prospects of continuing such design for the comprehensive lineups of its notebook and tablet products in the future, according to industry sources.Hinge makers to ramp up shipments for foldable smartphones in 2H20: Taiwan-based hinge makers are expected to ramp up substantially their output for foldable smartphones starting the second half of 2020, according to industry sources.Taiwan IC backend houses to expand production capacity: Taiwan-based IC backend houses plan to implement their capacity expansion projects in 2020 to satisfy growing demand for more complex chip designs and high-end testing, according to industry sources.

IT firms worldwide are taking aggressive actions for their businesses in 2020 with some adopting strategies to defend its market status such as Intel, which is looking to cut its PC processor prices in the second half of 2020 to attract demand, while Inventec Appliances is expanding its capacity for AirPods, eyeing for more orders from Apple. China-based Yangtze is now pushing to do 128-layer 3D NAND flash manufacturing, while Qualcomm and MediaTek are expected to report double-digit increases in their 2020 sales because of their 5G products.Intel to cut PC processor prices in 2H20: Intel is expected to initiate price cuts on its PC processors in the second half of 2020 to defend its market dominance, according to sources at PC makers.Yangtze Memory gearing up for transition to 128-layer 3D NAND flash: Memory startup Yangtze Memory Technology (YMTC), in which China's state-owned Tsinghua Unigroup holds a controlling stake, has reiterated plans to transition directly from 64-layer to 128-layer 3D NAND flash manufacturing.Qualcomm, MediaTek to enjoy double-digit growth in mobile chip sales: Qualcomm and MediaTek are expected to each post a double-digit increase in mobile chip sales this year, with gross margin edging up single-digit percentage points thanks to the availability of their high-ASP 5G products, according to industry observers.Inventec Appliances ready to land more AirPods orders with new capacity: Inventec Appliances is expected to obtain more orders for Apple's AirPods in 2020 thanks to the availability of additional capacity after the firm's new plant in Nanchang, China's Jiangxi province, comes online later in the year, according to industry sources.