Despite the ongoing US-China trade tensions, Taiwan's IC packaging and testing industry is still expected to see second-half 2019 revenues grow from the first half thanks to rising demand for 5G-related applications, according to Digitimes Research.Digitimes Research expects Taiwan's top-5 packaging and testing service providers to see their combined revenues rise over 20% sequentially in the second half and 6.2% on year. Demand for packaging and testing services on 5G chips is expected to continue rising in 2020 and boost the providers' revenues.The semiconductor industry was in a downturn in the first half of 2019, but sales started to recover in the second half with vendors' releases of 5G equipment and smartphones. Taiwan's top-5 IC packaging and testing service provider already saw their combined revenues reach a new high in the third quarter of 2019 and 5G chips will remain the key driver for their operation in the fourth quarter.

As 5G penetration rate is expected to reach 50% in 2023, smart augmented reality (AR) glasses will begin entering the consumer market, according to Digitimes Research.Many firms released inexpensive all-in-one VR solutions in 2018 to stimulate demand. AR/VR firms have also started combining their hardware with big-screen viewing experience, shipments of VR head-mounted display (HMD) have increased significantly in 2019 with particularly strong support from multimedia streaming service providers. All-in-one VR device shipments have also seen a surge in China in 2019.In 2020, the shipment growth driver for AR/VR wearables will be smart AR glasses, which will serve as a peripheral and a second smartphone screen. The wearable will also be integrated with the functionality of Bluetooth earphones.Since the devices' AR functionality will still be limited in 2020, the costs are unlikely to be too high and should put their prices in a rather consumer friendly zone, which is expected to expand their popularity among users.Many telecom carriers have begun forming partnerships with AR/VR wearable firms recently and Digitimes Research expects the trend to grow stronger in 2020 as more business opportunities will emerge, making AR/VR applications a crucial part of the telecommunication market in the next few years.With 5G commercialization expected to completely take off by 2023, full-function smart AR glasses will pose a strong challenge to smartphones.

Taiwan's commercial sector has witnessed significant achievements in smart transformation, especially in retail and logistics, over the past year, with many players having created brand-new business models driven by AI, big data and IoT applications, according to May Lee, director general of the Department of Commerce (DOC), Ministry of Economic Affairs (MOEA).Lee made the remarks at a recent forum on Taiwan's smart commerce hosted by DOC. About 600 people attended the event where keynote speeches were delievered and diverse smart commercial applications and solutions were showcased by Industrial Technology Research Institute (ITRI), retail, logistics, and e-commerce firms and startups. She said that smart transformation of the country's commerce sector will accelerate further under the government's policy support, with more intelligent applications to emerge soon.At the event, Pei-Zen Chang, executive vice president of ITRI, also said that ITRI has zeroed in on four aspects -system, service, software and startup -in pushing for Taiwan's industries to go smart by leveraging AI, big data, cloud computing and IoT technologies accumulated over the years.Among the keynote speakers, KW Chien, e-retail department head at convenience store chain FamilyMart, said as consumers can now easily get diverse product information online, the past advantages enjoyed by traditional retailers have gone. In the digitalization era, Chien stressed, the decisive match point in the retail market lies in the degree of understanding the needs of consumers.Through a single cross-industry e-commerce platform, consumers can purchase products supplied by all the distribution channels, which can be coupled with strong logistics capability to provide consumers with one-stop buying and fast delivery services, according to Chien.Money flow and logistic flow have been crucial issues in e-commerce operations. As the former can be easily addressed with payment tools available now, Chien continued, whoever can harness the last mile of logistics or physical delivery can better grab business opportunities. This can explain the rapid emergence of UberEat and Foodpanda.Amazon Global Selling doing well in TaiwanClare Lin, general manager of Amazon Global Selling Taiwan, said that since Amazon set up an office in Taiwan in late April 2017 under its Global Selling Program to better connect Taiwanese sellers and global buyers, many Taiwanese suppliers have joined the program to engage in e-commerce businesses.Lin said that total annual global retail sales amount to around US$20 trillion, with e-commerce transactions growing fast to command an 18% share of the total. The ratio, although quite smaller than retail sales via physical stores, is expected to surge at a 10x pace along with the rapid advancement of various smart technologies.Amazon has set up comprehensive global selling and logistics systems to support e-commerce businesses worldwide. For the moment, third-party cross-border e-commerce transactions have accounted for over 25% of total third-party sales. To meet the resultant strong demand for logistic services, Amazon has set up 170 operation centers around the world to provide fast delivery services for sellers and buyers, according to Lin.SW Chen, CEO of Taiwan AI Academy, said since the third wave of AI development started in 2010, the focus has been on machine learning of human experiences.AI has its limitations, Chen continued, but machine learning algorithms can work well in finding the unknown from the known as long as the linkage between them is strong enough.Chen indicated that machine learning has developed fast in e-commerce, smart manufacturing and healthcare sectors, with healthcare registering the fastest development as data generated by the sector are less vulnerable to interferences.He stressed that Taiwan's solid tech prowess and AI must be combined to facilitate professional integration of vertical domains such as retail, logistics, manufacturing and healthcare.Meanwhile, logistics service firms Morris Enterprise, Scanwell Logistics and Quantium Solutions were also present to share diverse technologies associated with secure transportation of pharmaceuticals, international cargo handling and e-commerce logistics.Many startups engaged in smart commercial and retail applications and solutions also introduced their latest offerings at the event. They included GoWiFi , Eunomics, InforCharge, Point Innovative, Dipp, Giftpack and Showhue.May Lee, director general of the Department of Commerce, Ministry of Economic Affairs (MOEA)Attendees of the DOC-hosted forum on smart commercePhotos: Digitimes staff, November 2019

Qualcomm has introduced its new 5G SoC lineup - the Snapdragon 865 series for smartphone vendors' flagship models and the 765 series for midrange to high-end ones. But it is the midrange smartphone market segment that is expected to see the most intense competition among chip vendors in the upstream and among phone vendors in the end market. Around 70% of over 200 million 5G smartphones to be shipped next year are estimated to be midrange to high-end ones. The smartphone market, after a year of sluggish demand in 2019, is heading towards recovery thanks to the arrival of 5G. Foundry house Powerchip Semiconductor Manufacturing (PSMC) expects smartphone-use sensors to help keep its 12-inch fabs running at full capacity in 2020.Qualcomm intros new 5G SoC lineup: Qualcomm has introduced its new Snapdragon 865 and 765 seies SoC chips designed for 5G-capable Android smartphones slated for launch in 2020. TSMC and Samsung Foundry reportedly are both being contracted to manufacture the chips.Midrange 5G handset chips market to heat up in 1H20: The main battlefield in the 5G mobile chip market is expected to shift from flagship models to mostly midrange ones in the first half of 2020, as around 70% of over 200 million 5G smartphones to be shipped next year will be midrange to high-end ones, according to industry sources.Powerchip seeing strong demand for smartphone sensors: Powerchip Semiconductor Manufacturing (PSMC), a foundry subsidiary of Powerchip Technology, has enjoyed robust demand for smartphone-use sensors which is filling its 12-inch fab capacity.

Taiwan's National Defense Medical Center (NDMC), a military medical university, has cooperated with HTC DeepQ, the smartphone vendor's healthare research unit, to set up a MR-based anatomy lab, according to NDMC president Cha Tai-lung.P4 (preventive, predicative, participatory, personalized) medicine needs support from high technologies, Cha. MR technology, through combining VR and AR, allows students to learn anatomy in a virtual scenario and interact with real environment, Cha noted. By virtue of dynamic simulation, MR-based anatomical education provides 3D display of organs that can move such as hearts and blood vessels at a microscopic level that fluff of small intestines, chyle ducts, muscle fibers and renal glomeruli are visible.The MR-based anatomy lab system integrates more than 5,500 human organs, more than 500 sets of physiological animation images and over 15 types of microscopic anatomy diagrams.NDMC began to use a VR-based education system through cooperation with HTC Deep in 2017, with students' learning featuring immersion, interaction and imagination.NDMC has procured 20 sets of HTC VIVE Focus and seven sets of HTC VIVE Pro for operation of the anatomy lab.An anatomical display at NDMC's MR-based anatomy labPhoto: Mark Tsai, Digitimes, December 2019

Taiwan's PC monitor shipments registered increases of 8.2% sequentially and 5.8% on year in the third quarter of 2019, according to Digitimes Research. But shipments are unlikely to see further on-year growth in the fourth quarter.The shipment growth in the third quarter was contributed by brand vendors stocking extra inventory as a precaution against the upcoming US tariffs on monitors imported from China, while LG Electronics, which manufactures most of its monitors in house, had lost share in the mid-range to entry-level segment due to fierce competition from US-based brands and TPV's sub-brands, Digitimes Research's figures show.Since most brand vendors have already advanced their fourth-quarter orders to the third quarter, Taiwan's fourth-quarter monitor shipments are expected to slip over 10% sequentially and witness the first on-year decline since the first quarter of 2018.Taiwan's share of global PC monitor shipments went up to above 70% in the third quarter as Taiwan makers' clients were able to make gains against LG Electronics in the mid-range to entry-level segment.PC monitors sized 22-inch and above did not see much growth in shipment share in the third quarter, while 21.x-inch ones had a major gain in share as most of LG's monitors that were undermined by fierce competition were within the size range. However, in the long term, demand will continue leaning toward large-size models.Qisda has been seeing stable shipments every quarter in 2019, while TPV, Foxconn Technology Group (Hon Hai Precision Industry) and Wistron all experienced over 10% on-quarter increases in third-quarter shipments. Wistron also registered an over 30% on-year growth in the third quarter due primarily to Hewlett-Packard's (HP) order ramp-up.TPV and Qisda were the top-2 monitor makers worldwide in the third quarter, while Foxconn was in third place, surpassing LG Electronics. With the exception of Qisda, TPV, Foxconn and Wistron will all see over 10% sequential declines in the fourth quarter.The production value of Taiwan's PC monitors saw a sequential growth weaker than that of unit shipments in the third quarter and the trend will continue in the fourth quarter. With panel prices continuing to drop, PC monitor ASP also slipped sequentially in the third quarter.

Mini and micro LEDs are being touted as strong candidates to play a key role in the next-generation display market. Now Apple is said to be developing a 12.9-inch mini LED-backlit iPad Pro for launch in third-quarter 2020. Many Taiwan-based supply chain partners are eyeing the mini LED opportunity. While micro LEDs will still play second fiddle to LCD panels by providing backlight, micro LEDs have the potential to oust OLED and LCD from the market. At any rate, the LCD industry is feeling pressure not just from rivaling technologies, but also from oversupply in the wake of fast capacity expansion. For China's BOE and CSOT, it is time to halt further investments in LCD.Taiwan supply chain eye orders for mini LED-backlit iPad Pro: Taiwan-based supply chain makers including Epistar, General Interface Solution (GIS), Taiwan Surface Mounting Technology (TSMT), Zhen Ding Technology and Flexium Interconnect are poised to receive orders for components to be used in a 12.9-inch mini LED-backlit iPad Pro that Apple reportedly will launch in third-quarter 2020, the sources said.BOE, CSOT to stop investing in LCD panel segment: BOE Technology and China Star Optoelectronics Technology (CSOT) have both disclosed plans to stop their investments in LCD display technology development and capacity expansion.

Taiwan-based Wistron Medical Technology is deepening its deployment in four domains seeking to leverage its parent firm's ICT prowess to informatize, digitalize, and smartize medical solutions, according to company CEO Donald Huang, concurrently chief technology officer at Wistron.Huang said Wistron Medical now focuses its efforts on vitro diagnosis, medical imaging, robotic assistive devices and smart hospital architecture incorporating AI and big data applications.In vitro diagnosis, the company has rolled out a series of non-invasive inspection and analysis instruments developed in cooperation with healthcare startups.In medical imaging, it has developed 3D optical scanners and low dose radiation hand-held dental ex-ray instruments.The company has also developed robotic exoskeletons to help patients suffering reduced mobility move freely, Huang said, adding that the development can serve as the best example of the firm's software-hardware integration capability.As to smart hospital architecture, it is a system aimed at providing personalized and intelligent bedside healthcare to patients by employing IoT, big data analysis and AI.Wistron Medical has also developed a smart hemodialysis solution, ICD-10 smart recommendation solution and a voice-activated communications platform for medical professionals, which can improve their efficiency by simplifying administrative work and accelerating their access to patients' medical records, according to Huang.Huang noted his company will not rule out an IPO listing plan for raising funds to support development of more smart healthcare solutions.

Four startups shared their business ideas with investors and big companies at an event jointly organized recently by Taipei City's Department of Economic Development and Digitimes to promote cross-sector collaboration in building an audio-visual entertainment ecosystem.Mind & Idea Fly (Mifly), Pi Square, King Kong Streaming and SoftChef attended the Startup X event presenting their ideas to venture capital firms, industrial associations, and enterprises including Taiwan Mobile, Far EasTone Telecommunications, PricewaterhouseCoopers Taiwan, HTC, Nvidia and Compal Electronics.Mifly, a developer of AR mobile apps, indicated that 5G, due to fast transfer speeds, is expected to enrich user experience by enabling AR/VR in gaming, marketing, e-commerce and education. Mifly has used AR/VR technology in education helping teachers and students at elementary and middle schools, company CEO Roger Lu said.Pi Square's PiStage, in-house-developed software enabling directors to preview 5G-based real-time high-definition images at different working places in the process of producing animation, can reduce cost and time spent in modifying draft animation by 25%, company CEO Spoke Yao noted.Live video streaming, as compared with other types of video streaming, needs extemporaneous ideas and interactive scenarios and the demand can be met by 5G's high transmission speeds and low latency, especially outdoor activities, according to King Kong, which plans to use 5G in AI-based recognition to screen out unsuitable content and big data analysis to find users' preference.SoftChef provides B2B IoT solutions in AWS Serverless architecture to help traditional manufacturers upgrade their manufacturing processes. 5G's high transfer speeds and low latency is helpful for the purpose.MiFly CEO Roger LuPi Square CEO Spoke YaoPhotos: Michael Lee, Digitimes, December 2019

Demand for 5G smartphones is expected to pick up fast next year, with mobile SoC prices for these handsets to stay at high levels at least in the first half of 2020. Tight capacity at TSMC's 7nm node will prevent production cost for 5G mobile chip from falling and Andriod phone vendors will not have too many alternatives in terms of SoC supply: it's basically either Qualcomm or MediaTek. 5G mobile SoC pricing will stay above US$100, a few time that for 4G ones. Mobile applications are also expected to play a key role in reversing the memory price trend from freefall to recovery in 2020. Memory ASP could rally as much as 30% next year.5G chip price to stay above US$100 in 1H20: 5G mobile SoC unit price will stay above US$100 in the first half of 2020, several times that for 4G solutions, as tight capacity at TSMC's 7nm node is likely to keep production cost at high levels, according to industry sources.Memory ASP to rebound sharply in 2020: Average selling prices (ASP) for memory could rise as much as 30% in 2020, driven mainly by strong demand for server and mobile applications, according to industry sources.