Apple's manufacturing partners may not be able resume normal production in China anytime soon in the wake of the coronavirus outbreak, but it does not seem to be derailing the vendor's plan of launching the next-generation iPhones in September. In fact, Apple is keen to carve out a big slice of the 5G device market despite a late start. Apple's demand for 5nm A14 mobile application processors to support its 5G devices is likely to be 50-60% higher than that for its 7nm A13, according to industry sources. Meanwhile, server memory demand remains strong thanks to orders from datacenters although the memory industry in general is bracing for worse impacts from the outbreak to come in the second quarter. Apple may still unveil next generation iPhones on schedule despite possible production delays, say sources: Apple is likely stick to its plans to unveil its next generation iPhone devices on a product event in September as it did in past years although this year's production of new iPhones could be delayed until after June due to the coronavirus outbreak, according to sources familiar with the matter.Apple reportedly in high demand for 5nm A14 to support 5G devices: Apple's demand for 5nm A14 mobile application processors (AP) to support its 5G devices is likely to be 50-60% higher than that for its 7nm A13, highlighting the vendor's determination to strengthen its market share in the 5G segment, according to industry sources.Server memory demand remains strong: Server memory demand continues to be strong thanks to a pull-in of orders from US- and China-based datacenter and server vendors, which will help sustain contract price growth in the second quarter, according to sources at memory module makers.Memory industry faces even harsher impact in 2Q20: Challenges arising from the coronavirus outbreak may become severe in the second quarter, according to sources in the memory industry, which may suffer from upstream material shortages starting later this month.

Shipments of LCD TVs by Taiwan-based makers are expected to fall below five million units in the first quarter of 2020, down nearly 44% on quarter and over 20% on year, affected by the coronavirus outbreak and seasonality, Digitimes Research estimates.In the fourth quarter of 2019, Taiwan's LCD TV shipments came to 8.48 million units, up 14.7% sequentially but down 12.6% from a year earlier, Digitimes Research figures show. The sequential gains were driven by peak-season effects.The ratio of shipments to Europe increased significantly in the fourth quarter of 2019 thanks to efforts by TPV Technology and Foxconn Electronics to ramp up shipments to the area. While the ratio of those shipped to North America remained flat, shipments to Asian markets have continued to decline since the second quarter of 2019.Meanwhile, shipments of over 50-inch TVs for the first time accounted for over 50% of Taiwan's TV shipments in the fourth quarter, while the ratio of 32-inch models showed a significant decline.TPV and Foxconn remained the top-two vendors in the fourth quarter but with their combined share falling to 63.3% from the 67.5% a quarter earlier, as fellow companies Innolux and Amtran Technology, which took third and fourth places respectively, both posted higher shipment growth in the quarter.

Production disruption in China is everyone's nightmare in the IT supply chain in the wake of the coronavirus. Many makers are raising their production outside of China, and Apple reportedly is shifting its oreders to assembly lines in Taiwan for an array of products. But for Taiwan-based Foxconn - Apple's major partner for making its iPhone devices in China - the epidemic is creating tremendous pressure on its production at its plants that employ hundreds of thousdands of workers - managment of whom would be a big challenge as far as health monitoring is concerned. The outlook of Foxconn's sales in first-quarter 2020 is rather gloomy. At any rate, global handset shipments are likely to fall sharply even if the virus can be contained at the end of June.Apple reportedly to shift orders for new devices to assembly lines in Taiwan: Apple is mulling shifting more assembly orders for its new models slated for launch in the first half of 2020 to factories in Taiwan mainly to diversify production risks associated with the ongoing coronavirus outbreak, according to industry sources.Foxconn sees 1Q20 revenues come under pressure: Foxconn Electronics is likely to have its first-quarter revenues hit by the fallout from coronavirus, according to industry sources.Global handset sales still face steep fall even if outbreak can be contained by June: China's coronavirus outbreak is set to have far-reaching impacts on the global IT industry and could undermine global demand to a great extent if related supply chains are cut off, according to Colley Hwang, president of Digitimes.

China's coronavirus outbreak is set to have far-reaching impacts on the global IT industry and could undermine global demand to a great extent if related supply chains are cut off, according to Colley Hwang, president of Digitimes.As health authorities battle the epidemic, the severity of the impacts on the global IT industry still needs to be fully understood, Hwang said in live broadcast TV program aired in Taiwan recently.The program where Hwang presented his insights into the IT supply chain in the wake of the outbreak has been viewed more than 100,000 times after it was uploaded to YouTube, which underlines the growing concerns about the damage that the epidemic has done to IT ecosystem and market.This is because Taiwan-based companies play a key role in the formation of the highly-connected global IT industry where all parts are tightly interwined.A large number of Taiwanese businessmen who have returned home for the Lunar New Year holiday have now been unable to return to work in China, and their counterparts in Europe and the US as well as their clients are unlikely to travel to and from China at the moment. This means, Taiwanese businessmen are in a better position to monitor the ongoing industrial changes from the perpsective of the supply chain, with their insights and observations likely to serve as barometers of future industry trends.Hwang's initial observation is based on an assumption that the epidemic will come to an end at the end of June, coupled with dynamic market situations and analysis of three major aspects of the IT industry: the industry fundamentals, supply side and demand side.FundamentalsThe fundamentals include the US-China trade relationships, the ongoing developments of 5G/AIoT applications and the coronavirus outbreak itself, while the supply side information focuses on the handset, computer and components sectors in addition to the emerging businesses.Hwang urges businesses to pay attention to the fluctuations in the demand of some key industries such as PCs, mobile phones, and TVs. He also believes that the emerging business opportunities related to IoV, autonomous driving and electric vehicles (EV) coupled with their supporting mechanisms will form a stream of information that will provide meaningful read on related supply chains.With regard to the demand side, the degree of shrinkage of the China market, as well as the impacts on its industries in the wake of the outbreak have to be monitored closely, as China's GDP currently accounts for 17% the global GDP, and a dwindling Chinese economy will have a far-reaching impact on the advanced economies in the US, Europe and Japan, as well as other emerging economies, Hwang asserts.Digitimes Research forecast at the end of 2019 that global smartphone shipments are likely to grow 4.5% on year to 1.42 billion units in 2020. The forecast was based on the prospects of the release of 5G phones.Digitimes Research also estimated earlier that sales of 5G phones would reach 248.6 million units in 2020, up from 21.5 million units shipped in 2019, and the proportion of 5G phones to global handset shipments would increase to 55.1% in 2024 from 17.4% projected for 2020.The black swanHowever, these optimistic estimates may have to be downward adjusted by the black swan - the coronavirus.Based on the experience from the SARS outbreak in 2003, and an assumption that the epidemic may be contained at the end of June, Digitimes Research expects the present outbreak to cut smartphone sales in China by 30% to 280 million units in 2020 compared to 400 million units it forecast earlier.Meanwhile, the outbreak will cut smartphones shipped to elsewhere around the globe outside China in the year to 800 million units, down 20% from one billion units as projected.Together, total global smartphone shipments will reach only 1.08 billion units in 2020, a contraction of 22.9% from Digitimes Reseach's forecast of 1.4 billion units.If the outbreak prolongs to year-end 2020, then the global economy should be ready to face a steep fall in demand as smartphone sales in China are likely to shrink to 160 million units or 40% of projected volume for the year. And consequently, global smartphone shipments could fall to as low as 600 million units in the year.However, this worst-case scenario is subject to correction by actual shipments alongside with the gradual resumption of work in China.Pre-outbreak forecast for global handset shipments, 2019-2024 (m units)Source: Digitimes Research, February 2020

Taiwan's shipments of large-size panels in 9-inch and above sizes (excluding Sharp's) are expected to contract 7.8% sequentially in the first quarter of 2020 if the coronavirus outbreak is under control, according to Digitimes Research.Taiwan's large-size panel shipments came to 59.12 million units in the fourth quarter of 2019, flat from the previous quarter but down 5.2% from a year earlier, as increased output from China's makers dragged down Taiwan's shipments of TV and monitor panels, Digitimes Research says.For the first quarter of 2020, Taiwanese makers' performance will be better than a 10.3% decline predicted for the industry on average, as Korea's makers are reducing their LCD panel output and the production in China has been affected by the coronavirus outbreak.Digitimes Research also believes that Taiwan's makers are poised to land more orders from brand vendors now as most of them have been keeping their front-end facilities for the production of large-size panels in Taiwan, without being affected by the virus.Taiwan's shipments of large-size panels for TV applications will decline by a small range sequentially in the first quarter, while those for tablets will suffer the most due to squeezing demand for the products in the end market.Taiwan's makers will account for 24% of the global production capacity for large-size panels in the first quarter due to Korean suppliers cutting down their capacity for LCD panels. Taiwanese makers will also account for an over 30% of global large-size panel shipments in the quarter thanks to increasing shipments of notebook and monitor panels.

The coronavirus outbreak in China is hitting hard many in the supply, but TSMC is a major exception. The world's top pure-play foundry has no plans to revise its sales guidance for the first-quarter, and reportedly none of its major clients are cutting orders despite the epidemic, with the foundry's capacity supply remaining tight. While even TSMC's China fabs have been able to maintain smooth operation, others in the IT sector have difficulties returning to normal production though work at their China plants has resumed. Foxconn and Pegatron, like many other Taiwan-based makers running manufacturing plants in China, are seeing limited numbers of employees returning to work. Failure to resume full production at Foxconn and Pegatron will affect iPhone shipments to Apple. TSMC continues to see supply run tight despite coronavirus outbreak: TSMC continues to see its supply remain tight, with no cutbacks in orders from its major fabless clients such as Huawei's HiSilicon, according to sources familiar with the matter.Uncertainties in employee returns may disrupt Foxconn production: Uncertainties in employee returns due to the coronavirus outbreak have become a challenge for Foxconn Electronics, a key Apple supplier with assembly facilities in Chinese cities of Zhengzhou, Shenzhen and Taiyuan, according to industry sources.Pegatron hit by low labor return rates: With China locking down Shanghai to prevent the spread of the coronavirus, Pegatron's plant in the city only saw a limited number of workers return to their posts on February 10, the first working day after the extended Lunar New Year break, according to sources from the upstream supply chain.

There are many business opportunities for medical clinics in Vietnam, for Vietnamese are increasingly willing to spend on medical care and therapy along with rising living standard, according to Johnny Chang, a Taiwanese member of the board of directors for Vietnam-based Dai-Y Clinic.Chang set up Cirem Medical in Vietnam for importing medical devices and materials for the local market five years ago, and later set up dental clinics in Ho Chi Minn City, Dong Nai and Binh Duong Provinces.Currently, medical resources are still insufficient to meet demand in Vietnam, with hospitals and clinics in cities frequently full of patients, Chang said. Operation of Dai-Y Clinic will extend from dental therapy to rehabilitation, orthopedics, anti-aging therapy and preventive medicine in 2020, Chang noted.Cirem will provide services to help Taiwan-, China-, US- and Germany-based companies apply for import licenses for medical devices and materials, Chang indicated. If products have obtained certificates from the US Food and Drug Administration and Taiwan's counterpart as well as EU CE marking, they stand a good chance of being approved to be imported into Vietnam, Chang noted.Dai-Y used to cooperate with Taiwan-based Kaohsiung Medical University and China Medical University to provide medical training services in Vietnam and arrange Vietnamese medial staff to receive training in Taiwan, Chang said.Johnny Chang (center), a member of the board of directors for Vietnam-based Dai-Y ClinicPhoto: Dai-Y Clinic

Many factories in China resumed work today after an extended Lunar New Year break, but many Taiwanese IT firms expected a low return rate of workers amid the ongoing coronavirus outbreak, which is showing no signs of abating. Some components firms have even decided to delay further their work resumption to February 25. And it remains uncertain how badly Foxconn's production for Apple will be affeced by the epidemic. For MediaTek, global 5G handset sales will be lower than expected in 2020.Less than 20% of employees expected to return to work in China: Less than 20% of Chinese factory employees would return to work after an extended Lunar New Year break due to the coronavirus outbreak, and many components plants in China have decided not to restart production until February 25 despite being allowed to resume operations on February 10, according to supply chain sources.Outbreak impact on Foxconn production for Apple remains uncertain: The impacts of the coronavirus outbreak on Apple's supply chain remains uncertain, but Apple's share prices managed to rally in the US stock market. Investors believed that Apple's major supplier in China, Foxconn Electronics, would be able to restart facilities throughout China as scheduled on February 10, maket observers said.MediaTek slightly lowers global 5G handset sales projection for 2020: MediaTek has adjusted downward its 2020 projection for the world's 5G handset shipments to 170-200 million units from over 200 million due to the coronavirus outbreak, with the Chinese market to absorb 100-120 million units for a global market share of over 60%.

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.