Shipments of smartphone application processors (APs) to China are forecast to decline 4.6% on year in the fourth quarter of 2019, following a decline of 9.4% in the third quarter from a year earlier to 210 million units (excluding those used in ODM models made for Samsung), according to Digitimes Research.Third-quarter smartphone AP shipments to China were also down 1.8% from a quarter earlier, affected by weak handset demand in the domestic market.Digitimes Research believes that China's handset vendors will launch less 4G models in the fourth quarter as the industry is transitioning to 5G technology, and therefore weakening their demand for smartphone APs in the quarter.China's handset vendors are also using more smartphone APs built using 7/8nm and 12nm processes, with the proportion of 7/8nm products against China's total AP shipments climbing from 10% in the second quarter to 17% in the third and is likely to reach 17.8% in the fourth.Meanwhile, 12nm AP products have replaced 28nm models as the mainstream with their ratios to remain steady in the fourth quarter, Digitimes Research said.Among AP vendors, MediaTek outraced Qualcomm to become the top AP supplier to Chinese handset makers in the third quarter, as its AP shipments increased significantly in that period both quarterly and yearly thanks orders from Huawei for its entry-level models as well as other smartphone SoC orders from Transsion.Qualcomm saw its AP shipments in China decline 18% on year in the third quarter as local clients were forced to adjust their product mix to cope with the impacts caused by the US-China trade dispute. The US chipmaker is expected to see its AP shipments drop another 15.6% on year in the fourth quarter, Digitimes Research estimates.

Apple reportedly is partnering with US game developer Valve for its AR product that will be manufactured by Quanta and Pegatron. Meanwhile, Asustek's gaming smartphone's shipments in 2019 are expected to be less than planned originally due to issues with component supply. TSMC, however, is expected to see a substantial revenue growth in 2020 despite the fact that the overall semiconductor industry is expected to weaken.Apple may unveil AR headsets in 2H20 developed with US partner: Apple reportedly has partnered with US game developer Valve to develop AR head-mounted display devices, which may be released in the second half of 2020 at the earliest, with Taiwan's ODMs Quanta Computer and Pegatron said to handle the assembly job, according to industry sources.Asustek gaming phone shipments to fall short of 400,000 units in 2019: Asustek may ship less than 400,000 units of its second-generation gaming smartphone, the ROG Phone II, in 2019 due to a shortfall in component supply and unsmooth production planning at its China-based production partner, according to industry watchers.TSMC on track for robust growth in 2020, says chairman: Despite the macroeconomic and geopolitical challenges facing the global semiconductor industry, TSMC is set to enjoy a substantial revenue increase in 2020, according to company chairman Mark Liu.

Global tablet shipments for the fourth quarter of 2019 are expected to increase 4.5% on year to the same level as recorded in the third quarter as both Apple and non-Apple brand vendors are likely to see their shipments pick up in the quarter, according to Digitimes Research.Worldwide tablet shipments amounted to 44.32 million units in the third quarter, representing a sequential surge of 35.5% and an annual expansion of 1.5%.Besides the seasonality effect, two more reasons can explain the sharp sequential shipment growth for the third quarter, Digitimes Research said. One is that US imposition of extra tariffs on China-sourced tablets prompted vendors to ask ODMs advance shipments delivery. The other is that Huawei managed to boost its shipment volumes starting in the second half of the year to offset poor shipment performance in the first half.In terms of third-quarter shipment rankings, Apple firmly retained the top spot, followed by Amazon, Samsung, Huawei and Lenovo, with Microsoft taking the sixth place with less than 1pp behind the fifth. The rankings are expected to see a slight shakeup in the fourth quarter, with Samsung to return to the second notch and Amazon back to the third place.With Apple releasing 10.2-inch inexpensive iPad to replace old 9.7-inch model, shipments of 10.x-inch models rose to over 60% of total global tablet shipments for the third quarter, and the ratio is expected to pick up further to near 70% in the fourth quarter.

Shipment of large-size LCD panels (9-inch and above) by Taiwan's makers (excluding Sharp) edged up 2.1% sequentially to 59.3 million units in the third quarter of 2019 due mainly to advanced shipments by clients in light of the uncertainty triggered by the US-China trade dispute, according to Digitimes Research.In the third quarter, shipments of notebook panels increased for the second consecutive quarter to account for 36.5% of Taiwan's total large-size panel shipments, with their ASPs falling by the smallest range over the past year as compared to those for other applications, Digitimes Research says.Meanwhile, panel shipments for TV and monitor applications declined sequentially in the third quarter, and prices of 55/65-inch TV panels, in particular, fell 25-30% from a year earlier. But shipments of 9-inch and above panels for tablet applications fared better due to increased shipments of end-market devices from Amazon and Huawei.Taiwan's shipments of large-size panels are expected to edge up merely 0.9% sequentially in the fourth quarter as Taiwan's makers are unlikely to benefit from the reductions of LCD panels by Samsung Display and LG Display, and instead panel makers in China will receive more windfall orders for 55-/65-inch TV panels due to their growing capacities.Overall, Taiwan's large-size panel shipments are expected to reach 232 million units in 2019, accounting for over 30% of global shipments, Digitimes Research estimates.

China's handset makers shipped a total of 180 million smartphones globally in the second quarter of 2019, down 2.5% on quarter and 5.3% on year, Digitimes Research has estimated.Huawei remained its status as the top vendor in China and managed to ramp up its shipments by a double-digit rate in the third quarter as the impacts of the US trade ban on its overseas shipments have begun to wane and it has continued to dent market share from fellow vendors in the domestic market, says Digitimes Research.Other top-tier vendors Xiaomi, Oppo and Vivo, ranking second to fourth, all registered sequential shipment declines in the third quarter, as overseas shipment gains were eroded by decreased domestic sales.Total smartphone shipments by China's handset vendors are expected to register an on-year decline in the fourth quarter of 2019 as domestic sales are expected to continue to fall as compared to a year earlier and demand from overseas markets will not be as strong as seen in previous years due to weak global economy, Digitimes Research says.

Taiwan-based ODMs have been eager to move production out of China upon suggestion by their clients amid the US-China trade disputes. But most of the notebook clients have not been as keen when it comes to committing their production to the relocated production lines. Now the ODMs are striving to improve yield rates and reduce production costs trying to convince clients of the efficiency of their non-China-based manufacturing bases. The uncertainties plaguing the global economy have hit various industries this year, but TSMC chairman Mark Liu believes the global semiconductor industry is heading towards another wave of growth driven by AI and 5G.Taiwan ODMs strive to improve yield rates, costs for non-China production lines: Taiwan-based notebook ODMs have completed most of their plant relocation and their present focus is to improve production yield rates and reduce costs at the relocated facilities in a bid to retain clients, according to industry sources.AI, 5G to trigger chip market growth, says TSMC chairman: The emerging AI and 5G applications will be triggering the next phase of growth in the global semiconductor market, according to TSMC chairman Mark Liu.

Taiwan's shipments of small- to medium-size LCD panels are expected to decrease 17.6% on quarter and 31.1% on year in the fourth quarter of 2019 due to off-peak season effects and reduced smartphone shipments resulted from the US-China trade dispute, according to Digitimes Research.Shipments of small- to medium-size panels by Taiwan's makers grew 12.4% sequentially to 201 million units in the third quarter of 2019, driven by increased shipments for smartphone and feature phone applications. However, third-quarter shipment volumes were still down 34.9% from a year earlier.In the third quarter, handset panel shipments alone surged 19.2% on quarter, while those for tablet applications were down 21.8% due to decreased demand for 7- to 8-inch panels.Shipments of small- to medium-size panels for all applications will see a setback sequentially in the fourth quarter, with tablet panels to drop 8.1%, handset panels to plunge 18.4%, and those for other applications to slide more than 10%, Digitimes Research estimates.For individual makers, HannStar Display will see its shipments of small- to medium-size panels fall 20.1% sequentially in the fourth quarter after registering a 20.1% gain in the previous quarter.AU Optronics (AUO) and Innolux will suffer sequential drops of 8-13% in the fourth quarter after their shipments grew 6-7% a quarter earlier.

Shipments of LCD TVs by Taiwan-based makers are expected to grow 11.2% sequentially to 8.22 million units in the fourth quarter of 2019, driven by peak-season demand, according to Digitimes Research. On a yearly basis, the shipments will still represent a decline of 15.3%.Taiwan's LCD TV shipments edged up 3.2% sequentially but dropped 13.3% on year to 7.39 million units in the third quarter of 2019, partly as a result of increased tariffs on Chinese imports by the US, Digitimes Research says.The ratio of TVs shipped to North America against Taiwan's total TV shipments increased to 39.5% in the third quarter as Vizio raised the proportion of its sourcing to Taiwan. Meanwhile, shipments to Asia accounted for 28.9% of Taiwan's overall volumes in the third quarter, down from 36.5% a year earlier.Shipments of 50-inch and above TVs accounted for nearly 50% of Taiwan's overall volumes in the third quarter, squeezing the demand for 40- to 49-inch models; such a ratio will climb to over 50% in the fourth quarter. 4K models made up for the first time over 50% of Taiwan's TV shipments in the third quarter.In the third quarter, the top-two makers TPV Technology and Foxconn Electronics ramped up their aggregate share to 67.5% from 60.5% a quarter earlier. Innolux moved up one notch to third place in vendor rankings, and Amtran Technology retreated from the third to fourth.

Taiwan cloud software startup SoftChef has been devoted to developing comprehensive solutions from edge devices to infrastructures since its inception in 2017, providing customized IoT solutions to better serve clients, according company founder and CEO Josh Chai.In a recent interview conducted by Digitimes, Chai highlighted the importance for enterprises to build a "terminal" concept and incorporate intelligence into end devices. He also stressed that future business model must focus more on hardware connections to better learn and serve real needs of consumers.Q: What drove you to set up the cloud software venture?A: After serving networking specialist D-Link from 1999-2013, I left to set up a B2B e-commerce platform GCR in cooperation with the firm's ex-CEO Tony Tsao as I thought the pure hardware production industry could hardly advance farther. But one year later, I returned the GCR management right to Tsao and joined InfinitesSoft, a developer of hybrid/multi-cloud management software, to learn more about cloud technology.At InfinitesSoft, I found great business potentials in the Asian cloud market, especially in Southeast Asia and China, prompting me to establish SoftChef to develop cloud-based IoT platforms for IT hardware makers.Q: After venturing into the IoT management platform domain, did you see any difference between the actual market demand and what you envisioned initially?A: Initially I adopted the serverless application framework of Amazon Web Services (AWS) seeking to create a general-purpose IoT management platform allowing enterprise clients to manage IoT devices, collect and store data anytime.But later, we found IoT is a highly customized domain. Actually, an ideal IoT must be like an "oven" allowing enterprises to put in their own materials and process them into distinct "business breads" they need, as so-called standardization and automation can hardly be actualized in IoT vertical applications. In other words, clients require a versatile and agile oven rather than a vending machine selling standardized services.Q: How do you assess Internet of Everything that many think may materialize after 5G commercialization?A: In the IoT era, it doesn't mean that all devices should be connected to the Internet, as not all the data collected can generate values and meaningless connections are just a waste of resources. In this regard, a "terminal" concept should be established, meaning that data can undergo edge processing at the local end allowing only valuable data to be stored at the cloud end. In short, any IoT end device should be given timely intelligence.Q: What kind of value do you think IoT connection can generate for enterprises?A: If enterprises know little about the purpose of such connections and what data they want, IoT connection can hardly generate useful value for them and adopting even the cheapest NB-IoT transmission system will be not cost-effective for them.IoT is not a technology but a process of transforming digital economy into infonomics and data economy, with production-oriented business model replaced by service-oriented one highlighting sales of services not merchandizes.In the future, enterprises have to reply on hardware devices connection to better learn what consumers need so as to offer services that can really cater to their needs and further make them willing to pay for the services at whatever costs.SoftChef founder and CEO Josh ChaiPhoto: Vicky Liu, Digitimes, October 2019

In incorporating AI-based systems, enterprises must first determine the real purpose of adopting them and should noy use them merely as a tool for data presentation, otherwise the systems may become a "disaster" for backend data users, according to Kevin Tu, senior director at Macronix International.Tu made the remarks when sharing Macronix's experiences in incorporating AI systems into its memory fabs at a seminar held alongside the just-concluded TPCA Show in Taipei. More than 20 years ago, the company already utilized Super Nova production management system developed in house based on an AI concept to enhance process control and plant management.Data visualization is just the first step of any AI-enabled system, and what really counts is data utilization, Tu said, adding that the system must possess a decision-making capability to help IT engineers work out smart decisions. If the system is used for data presentation only, it will remain a traditional IT system, unable to show the real value of an AI system.Tu reasoned that data generated by a fab is now measured in terms of TB, and it would be a "disaster" for engineers who need to sort out critical part from the big data if the AI system lacks decision-making capability.After data becomes visualized, Tu continued, enterprises must narrow the scope of data by classifying the data in accordance with their importance, and then engineers can determine whether to access the data or not before locating useful data.At the seminar, Macronix president JK Chen also noted that his firm's 12-inch fab with a monthly capacity of 20,000 wafers can collect over two billion pieces of data a day, and the data volume will grow exponentially to over 10 billion pieces for an 12-inch fab with a monthly capacity of 100,000-120,000 wafers. With this, he said, how to convert the big data into useful ones will pose the largest challenge to fab managers.