Global server shipments went up 13.4% sequentially in the fourth quarter of 2019 thanks to rising demand from US large datacenter companies and China's server market. However, shipments in the first quarter of 2020 are expected to be affected by China's coronavirus outbreak, according to Digitimes Research's latest server tracker.Server demand from large datacenters remains strong in the first quarter of 2020, but the outbreak has undermined the operation of the related upstream supply chain. Now global server shipments are expected to decline 9.8% sequentially, compared to previous prediction of a 1.2% growth. The volumes' on-year growth fo the firsst quarter will also shrink from 37.9% to only 22.9%, Digitimes Research's numbers show.Global server shipments suffered on-year declines in the first half of 2019 because of the US beginning to impose tariffs on servers imported from China and many datacenters had pre-stocked extra inventory in 2018 to minimize the tariff's impacts. Global server shipments resumed on-year growths starting the second half of 2019 with a growth rate of 1.2% for the whole-year 2019.Datacenter companies such as Facebook and Microsoft still have strong demand for servers for the first quarter of 2020. Facebook is particularly interested in buying high density models and should benefit makers such as Wiwynn and Quanta Computer. However, because of the coronavirus outbreak, these orders, which were originally scheduled for shipments in the first quarter, have already been postponed to a later time.Many key factors are expected to affect server shipments in 2020. Demand from large datacenters will continue to act as the key growth drivers for the market, while server players including Lenovo, Inspur and Supermicro are planning to raise the proportions of their in-house server production.AMD's second-generation EPYC server processors have continued to bring pressure on Intel. To maintain its competitiveness, according to sources from the upstream supply chain, Intel will release its next-generation Ice Lake platform in the third or the fourth quarter of 2020 for the server market. At the moment, Taiwan's upstream supply chain is completing tests for the new platform's compatibility and the solution is expected to become one of the key shipment drivers for 2020.

For many parts of China, work is supposed to resume starting February 10 after an extended Lunar New Year break in the wake of the coronavirus outbreak, but manufacturers generally do not believe their production can return to normal levels. Materials and labor shortages will be a major problem due to local governments' tight control of transportation. The chairman of panel maker AUO says the display supply chain braces for major impacts if the epidemic cannot be contained soon. Taiwan-based passive components makers have aleady been asked by their clients to raise their production outside the epidemic-hit China.China high-tech supply chain unlikely to return to normal operations on February 10: China's high-tech industry supply chains including the semiconductor sector are unlikely to return to normal operations on February 10, the date when the country's extended Lunar New Year holiday ends, according to industry sources.Coronavirus outbreak to hit display supply chain, says AUO chairman: The coronavirus outbreak in China is poised to cast a significant impact on the display industry's supply chain, affecting the procurement of raw materials, manufacturing and product deliveries if the epidemic could not be contained in soon, according to AU Optronics (AUO) chairman Paul Peng.Passive component makers asked to raise production outside China: Taiwan-based passive component makers are being requested by clients to scale up production in Taiwan or Southeast Asia to offset possible production contraction in China due to the coronavirus outbreak, according to industry sources.

iStaging has seen a surge in inquiries following China's coronavirus outbreak about its VR/AR solutions that can replace person-to-person contact conventionally entailed in general business operations, according to company COO Rene Fang.Real estate agents in Taiwan have adopted VR solutions to enable clients to browse selected properties using smartphones, tablets, PCs or even VR glasses, Fang said. If potential clients are interested in certain real properties, agents can introduce detailed information to them and answer questions in a VR environment, Fang noted.Other industries can also use VR/AR solutions to hike operation efficiency, Fang indicated. Logistics service operators can use VR/AR solutions to let clients remotely understand utilization of warehousing space and related management; retail operators can be helped make decisions on store deco or floor plan; factories can use them in employee training; and hotels can let customers preview room conditions and environment of hotels.With improvements in hardware/software technology and mature use of cloud computing, VR/AR solutions are no longer impractical and costly, Fang said.Clients using iStaging solutions only need to use video recording sets equipped with fisheye lenses (can be smartphone cameras, cameras or 360-degree panoramic cameras), and use an app to process the videos and then upload them to the cloud computing to turn them into VR content, Fang explained. Clients can make cloud computing-based VR content available for their customers via putting the content on its official websites, Fang noted. iStaging COO Rene FangPhoto: Vincent Mao, Digitimes, February 2020

ezTravel, the largest Taiwan-based online travel agency, has cooperated with AI-based solution developer Appier to provide services for customized personal tourism planning using AI-based big data analysis.For users of its website or other websites, ezTravel analyzes their using behavior, such as key word search, and devices for Internet connection to profile their tourism behavior as reference for precise marketing.The precise marketing is to send desired information to target consumers based on tourism behavior at appropriate time and via appropriate channels through interaction-based push of relevant information to trigger their purchases. For example, for users searching for information on Kenting, a sight-seeing place in the southern tip of Taiwan, at ezTravel website, ezTravel will push notification of government's tourism subsidization in fall and winter seasons to interest them. When they browse pages about hotels and leave before making reservation, ezTravel will immediately push detailed information on hotels to induce them to make reservation. In addition, through AI-based analysis of whether they have derived needs such as booking flight tickets or renting cars, ezTravel will push coresponding information.According to Tourism Bureau under Ministry of Transportation and Communications, Taiwan recorded overseas travel volume of 8.61 million person/trips in first-half 2019, growing 2.63% on year, and Japan, South Korea and Thailand were the top-3 destinations.

To improve 5G spectrum's usage efficiency, 3GPP has brought up several solutions with dynamic spectrum sharing (DSS) being one of the major technologies expected to be used when transitioning from 4G to 5G. The technology is expected to be adopted by the enterprise market in the second half of 2020, according to Digitimes Research's study of 5G networks.Since 5G requires high numbers of cell deployments, telecom carriers will have to spend significant amounts related developments, including the high costs of obtaining 5G licenses.In Taiwan, the first-round biddings on 5G spectrums totaled NT$138.08 billion (US$4.55 billion), much higher than the NT$40-50 billion expected by market observers. The sum is nearly NT$20 billion higher than the first-round bidding amount for 4G spectrums.The high costs may also deter adoption of 5G by emerging applications that have lower margins and could hamper the development of the 5G sector. Therefore, 3GPP has been offering solutions under three major categories: licensed spectrum, unlicensed spectrum and shared spectrum, looking to enhance 5G's usage efficiency.Within 3GPP's Release 15 (Rel-15), DSS will allow carriers to simultaneously serve both 4G and 5G users, instead of needing to clear out all 4G users in the spectrum before being able to support the next-generation network standard. With the network mode that combines 4G with 5G, the technology will help accelerate carriers' paces in the deployment of 5G standalone networks.However, for DSS to be implemented into a 5G network, chips, and equipment will all need to support the technology, but so far only modem chips supplied by Qualcomm and MediaTek are able to support it. With more telecom carriers and equipment suppliers to soon release DSS solutions that support FDD/TDD, the commercialization of DSS is likely to take off in the second half of 2020.Bidding results of 3.4-3.6GHz 5G spectrums (NT$b)MarketTotal bandwidth releasedLicense validityBidding amountCosts per MHzCosts per capita for each MHz (NT$)Taiwan270MHz20 years136.430.5121.40South Korea280MHz10 years78.60.285.30Italy200MHz20 years152.10.7612.60Germany300MHz20 years1430.485.80Source: Governments, compiled by Digitimes Research, January 2020

The UK Tech Rocketship Awards are open to Taiwan-based startup businesses for the first time, with six candidates to be selected to participate in the London Tech Week 2020 during June 8-12, the British Office in Taipei has announced.Three categories of the UK Tech Rocketship Awards are available for Taiwan-based startups: AI and data science covering data analytics, data centers, cloud computing, AI, machine learning, digital infrastructure, business model transformation, process innovation; technologies for an aging society (life science) mainly covering medical technologies, digital health, new medical care technologies, smart housing and devices; future mobility covering innovative smart city solutions, IoT, autonomous and connected vehicles, urban connectivity, citizen engagement.Two Taiwan-based startups will be selected for each category. Qualified competitors are startups which develop innovative technology-led solutions, have had business operation for over two years and are looking to internationalize.The UK Tech Rocketship Awards are an excellent platform for startups to grow internationally and Taiwan-based ones are encouraged for participation to gain international exposure and expand global networks, said British Representative to Taiwan Catherine Nettleton.For interested Taiwan-based startups, the deadline for applications is April 13 and the six winners will be announced on May 11.So far, more than 1,700 startups from Australia, India, Japan, New Zealand and South Korea have participated in the UK Tech Rocketship Awards.British Representative to Taiwan Catherine NettletonPhoto: Mark Tsai, Digitimes, February 2020

The extent of the impact on the ecosystem by the coronavirus outbreak is anyone's guess at this stage, but industry and market observers generally agree that a prolonged epidemic will take a heavy toll on both the supply chain and consumer demand. The China smartphone market is very likely to see a sharp drop in shipments in first-quarter 2020, and in a more optimistic scenario, smartphone shipments to the China market will drop 9% if the outbreak can be contained by the end of February, according to some observers. This is bad news for everyone involved in the smartphone market, including vendors of mobile processors. MediaTek, who has a strong presnece in China's handset maket, may see a sequential decline of as much as 15% in revenues in the first quarter. But foundry house TSMC is not ready to revise its guidance for the first-quarter sales, which accroding to its forecast given last month, will decrease slightly compared to fourth-quarter 2019. China smartphone shipments to fall off a cliff in 1Q20: Smartphone shipments in China are likely to fall off a cliff in the first quarter of 2020 due to the coronavirus outbreak, according to industry sources.MediaTek 1Q20 sales likely to fall 15%: MediaTek is likely to post a revenue decline of as much as 15% sequentially in the first quarter of 2020, due mainly to a collapse in demand from China's handset market, according to market sources.TSMC reiterates sales guidance for 1Q20: TSMC currently has no plans to revise its sales and margin guidance for the first quarter of 2020, according to the pure-play foundry, which also disclosed non-production staff at its China-based wafer fabs will return to work on February 10.

The coronavirus outbreak in China has widespread impacts on the ICT supply chain. Although many makers are supposed to resume production in China next week or in mid-February if no further complications occur, they cannot tell how normal their operations will be. Notebook ODMs estimate their utilization rates will be 50-70%, depending on the numbers of workers able or willing to return to work and material supply conditions. Companies in other sectors face the similar uncertianties and China-based panel makers, including BOE, CSOT and Tianma, who have fabs in Wuhan - the epicenter of the outbreak - could fare worse. For the mobile device market, the first year for the 5G era got off to a really bad start. Demand for 5G smartphones is likely to bt hit by the outbreak, which in turn will dampen sales of mobile DRAM.Notebook ODMs to see coronavirus hit production: Taiwan-based notebook ODMs, which operate their plants mainly in China, have estimated their production utilization rates will range from 50% to 70% after resuming operation following the extended Lunar New Year break, as employees' return and supply of components and materials are being disrupted due to the coronavirus outbreak.LCD fabs in Wuhan may suffer material shortages: LCD fabs run by BOE Technology, China Star Optoelectronics Technology (CSOT) and Tianma Microelectronics in Wuhan - the epicenter of the coronavirus outbreak - may suffer a shortage of upstream raw materials due to mounting transport curbs in China as a means to contain the epidemic, according to industry sources.Mobile DRAM demand uncertainty emerges: Mobile DRAM demand for smartphones is likely to disappoint in the first half of 2020, as the coronavirus outbreak may hit sales of new 5G-compatible phones, according to market sources.

Fintech startup business Aifian in 2019 launched its AI Chia Chia, an artificial intellignece-based app functioning as a broker for personal credit information, and has partnered with DoDoHome, a large car parking service provider in Taiwan, for initial commercial use, according to company founder and CEO Ocean Liu.Using AI and chat robot technology, AI Chia Chia collects users' personal credit information via conversation for a few minutes, Liu said. Then, the app can use AI-based algorithms to undertake cloud-based analysis of such information to profile personal credit rating, which is expected to be helpful for users applying for small-amount credit loans, Liu noted.Aifian targets car parking service providers, airline companies and e-commerce operators as partners for use of AI Chia Chia, for they focus on payments by credit cards, Liu indicated, adding that Aifian aims to tap overseas markets.So far, there are nearly 122,000 users of AI Chia Chia, according to Aifian's website.Notebook- and smartphone-based use of AI Chia ChiaPhoto: Aifian

Global tablet shipments totaled 43.23 million units in the fourth quarter of 2019. Shipments from China's white-box players weakened in the quarter due to their need to digest inventory, while brand vendors mostly saw increased shipments thanks to seasonal momentum, according to Digitimes Research's latest tablet report.As the tablet market enters the traditional slow season and China's coronavirus outbreak has extended the Lunar New Year holidays there by 1-2 weeks, global tablet shipments are expected to arrive at only 28.56 million units, a new low, estimates Digitimes Research.Apple was the largest tablet vendor worldwide in the fourth quarter of 2019 thanks to mass shipments of its 10.2-inch 7th generation iPad. Samsung Electronics was in second place, followed by Amazon in third, Huawei in fourth and Microsoft in fifth. Lenovo fell out of the top-5 in the fourth quarter of 2019.Amazon will drop to fourth place in the first quarter of 2020 due to a major decline in shipments, giving the third place to Huawei. Microsoft will remain fifth.Shipments of tablets with 10-inch and above displays accounted for 70% of the global volumes in the fourth quarter of 2019, while those with 8.x-inch displays also enjoyed a rise in share to over 17%. The share of 10-inch and above models will continue to rise to nearly 75% in the first quarter of 2020, while 7-inch devices' share will drop to 5.7%, down from 10.7% in the previous quarter due to Amazon's sharp shipment decline. The 8-inch form factor will take over the 7-inch one to become the mainstream size for inexpensive tablets.Amazon's tablet shipment drop in the fourth quarter 2019 affected the shipment share of tablets with GFF touchscreen technology, allowing the percentage of those with in-cell technology to pick up. Amazon's expected sharp shipment decline in the first quarter of 2020 will significantly benefit the shipment share of in-cell-based tablets.Of Taiwan's tablet shipments, over 50% will be contributed by Foxconn Technology Group (Hon Hai Precision Industry) in the first quarter of 2020, a new high since the second quarter of 2018 because of orders for iPad Pro (2020). China-based BYD has entered Apple's table supply chain in 2020 and will take away a part of entry-level iPad orders from Taiwan makers. Since BYD is still new, orders it has received will not significantly affect Apple's other existing partners in the first quarter of 2020.Global tablet shipment share by vendor, 1Q19-1Q20 (%)Source: Digitimes Research, February 2020