Development of 5G technologies and products has become a key direction for Huawei's operation with its orders for 5G-related chips to upstream suppliers expected to rise dramatically over the next two years, while Huawei's chipmaking subsidiary Hisilicon may even become the largest clients of TSMC in 2020 due partly to 5G demand. On the other hand, GIS is planning to boost the monthly capacity of in-display fingerprint sensors to five million units by November.Huawei ramping up chip demand for 5G base stations: Huawei has been ramping up orders for chips used in its 5G base station equipment, according to sources at backend houses, which expect the China-based player's chip demand to remain robust over the next two years.Hisilicon likely to be biggest client of TSMC: Huawei's chipmaking arm Hisilicon is expected to become not only the largest Asia-based fabless chipmaker but also TSMC's biggest client in 2020, according to industry sources.GIS ramping up in-display fingerprint sensor production: General Interface Solution (GIS) is expanding its production capacity for in-display fingerprint sensors at its plant in Chengdu, China, with plans to ramp up its monthly output to five million units in November from 2-3 million currently, according to company chairman Hsien-ying Chou.

Following the trial production of 1znm DRAM chips at the fab in Japan, Micron is expected to begin mass production of the chips at plants in Taiwan in the first half of 2020, while MediaTek's first single-chip 5G solution for sub-6GHz networks is also scheduled to enter volume production in the first quarter of 2020. Globalfoundries have filed patent lawsuits against TSMC and sources from the Taiwan semiconductor industry believe there are more to GF's actions.Micron on track to kick off 1znm DRAM production in Taiwan: Micron Technology is already engaged in risk production of DRAM chips built using 1z-nanometer process technology at its Hiroshima fab in Japan, according to the US memory chip vendor. The more advanced manufacturing node will be ready for mass production at Micron's Taiwan-based plant in the first half of 2020.MediaTek gearing up for volume production of single-chip 5G chips: MediaTek has started delivering samples of its first single-chip 5G solution designed for sub-6GHz networks, and expects volume production of the chip to kick off in the first quarter of 2020, according to company president Joe Chen.What drives GF to file patent infringement lawsuits against TSMC?: The unexpected patent infringement lawsuits recently filed by Globalfoundries (GF) with courts in the US and Germany against Taiwan Semiconductor Manufacturing Company (TSMC) is most likely aimed at raising the tech profile of the US foundry, caught in operating losses, to facilitate sales of its remaining assets, according to industry sources.

Ministry of Science and Technology (MOST) will select 80 local startup teams for them to present their innovations at Eureka Park, a global stage for innovation, CES 2020 to take place in Las Vegas, the US, during January 7-10, according to industry sources.The selected startup teams will showcase their innovations at Taiwan's national pavilion at Eureka Park, the sources said.MOST picked 32 and 44 Taiwan-based startup teams to participate in Eureka Park CES 2018 and 2019 respectively and eight of the 44 teams in 2019 won Innovation Awards, with the number of teams ranking second among all participating countries next only to France, the sources noted.Viewing that participation in Eureka Park has substantially help Taiwan-based startup teams attract international venture capital investment, access international market and create international visibility, MOST has decided to enlarge the participation in 2020, the sources indicated.MOST will select startup teams developing innovative solutions in 10 areas including IoT, AI, blockchain, smart medical care, robotics, smart manufacturing and automotive application, the sources said. MOST will commission government-sponsored Industrial Technology Research Institute to offer short-term training courses to prepare selected startup teams for making presentations and attending one-to-one business interviews at Eureka Park CES 2020, the sources noted.

Taiwan-based ODMs and OBMs (own-brand manufacturers) together shipped 21.984 million PC-use LCD monitors in the second quarter of 2019, increasing 7.6% on quarter and 4.5% on year, while the corresponding production value of US$2.435 billion grew 7.3% sequentially and 4.9% on year, according to Digitimes Research.17-inch and below models accounted for 2.0% of the shipments, 18- to below 20-inch ones for 10.6%, 20- to below 22-inch ones for 22.4%, 22- to 26-inch ones for 48.1%, 27-inch and above ones for 16.9%, Digitimes Research indicated.With Dell, HP, Lenovo, Acer and Asustek Computer being the major vendors (clients), TPV Technology recorded the largest shipments of 11.92 million LCD monitors, followed by Qisda with 5.50 million units, Foxconn Electronics with 2.68 million units and Wistron with 1.85 million units.Shipments in the third quarter are forecast to reach above 22 million units, according to Digitimes Research's latest monitor shipment tracker.

With the trade tensions between the US and China escalating, IT companies in the US and China have started taking measures to minimize the impact with Apple and Google both accelerating their paces on moving their products' manufacturing out of China. Meanwhile, China's semiconductor industry also began a de-Americanization trend and is turning to seek supply domestically. In additional news, Austria-based AMS has expressed optimism about demand from three major upgrades in smartphones in 2019, while China-based panel makers have been cutting their production due to dropping prices.AirPods, Google Home production in China may be moved to Southeast Asia: Apple is moving to have its AirPods contract makers shift production from China to Vietnam and Google is also mulling asking its smart speaker manufacturing partners to move production to Thailand, to blunt impacts of additional tariffs soon to be enforced by the US on China-sourced consumer electronics devices, according to supply chain sources.China IC industry revving up to sharpen in-house supply capability: China semiconductor industry has been aggressively revving up its "de-Americanization" drive since the start of 2019 seeking to sharply wean itself off US suppliers of crucial IC components and technologies and significantly boost its in-house chip supply capability, according to industry sources.AMS positive about demand from 3 major upgrades in smartphones in 2019: Upgrades in smartphone specs and features such as facial recognition, all-screen design and enhanced camera capabilities continue to drive related chip and component demand this year, according to AMS, an Austria-based supplier of high performance sensor solutions.China panel makers keep slashing output: China-based panel makers including BOE Technology and China Star Optoelectronics Technology (CSOT) and Chongqing HKC have reportedly continued to cut back their production in response to steep falls in panel prices, according to industry watchers.

With 5G business opportunities starting to emerge, CCL makers have been keenly increasing their capacity to satisfy rising demand from the PCB industry. Meanwhile, suppliers of CCLs, IC substrates and flexible PCBs are also expected to enjoy growing orders in the upcoming months. The trend will go the same for memory backend firms including OSE and ChipMos thanks to orders from downstream modules makers.Memory backend firms see bright revenue prospect for 2H19: Taiwan-based memory modules packagers Orient Semiconductor Electronics (OSE) and ChipMos Technologies are expected to see their revenues pick up month by month in the second half of 2019 on stable increases in orders from memory modules makers such as Phison Electronics, Kingston Technology, Longsys Electronics and Adata Technology, according to industry sources.CCL makers keen on capacity expansion to brace for 5G-driven demand: With CCL (copper clad laminate) deemed as the most crucial material for high-end PCBs for 5G applications, major CCL makers in Taiwan and China are actively proceeding with capacity expansions seeking to ready sufficient capacities to meet explosive demand expected to come after 5G commercialization, according to industry sources.CCL, IC substrate and flexible PCB demand to boom in 5G era: Chip and component demand for 5G related applications, including network equipment, and antennas for handsets and IoT devices, is set to grow robustly starting 2020. In the PCB industry supply chain, suppliers of CCLs, IC substrates and flexible PCBs are being pinpointed as among the beneficiaries.

According to Digitimes Research's observation, with global market demand on a moderate increase in second-quarter 2019, Taiwan-based semiconductor foundries showed recovery. Taiwan Semiconductor Manufacturing Company (TSMC), United Microelectronics Corporation (UMC) and Vanguard International Semiconductor Corporation (VIS) together generated total revenues of US$9.13 billion in the second quarter, up 8.9% on quarter but down 2.5% on year.During the second quarter, unfavorable circumstances including weakening global economy, foundry customers waiting to deplete inventory and the smartphone market reaching saturation were exerting pressure on Taiwan-based semiconductor foundries. (This report analyzes the three firms aforementioned). Nevertheless, Taiwan-based semiconductor foundries were able to deliver sequential revenue growth, thanks to some downstream clients starting early inventory preparations, some others enjoying growing market shares, and TSMC shaking off the impact from the photoresist incident that had hit its production earlier, Digitimes Research's latest report on Taiwan's semicondcutor foundry sector noted.In terms of manufacturing nodes, as a result of TSMC delaying shipments for some orders until second-quarter 2019 due to the production incident, 20/16/14/12nm process technologies rose to become the main revenue generator for Taiwan-based foundries in second-quarter 2019. The share of revenues contributed by advanced process nodes (28nm and beyond) increased sequentially but it did not return to the level seen in fourth-quarter 2018. Their average selling price (ASP) was also buoyed by the sequential increase in the share of revenues contributed by advanced process nodes.Looking into second-half 2019, moderate increase in end market demand will drive capacity utilization, hoisting Taiwan-based foundries' revenues back above the US$10 billion mark in third-quarter 2019 with further growth in fourth-quarter 2019. Revenue performance of 7nm and more advanced nodes is expected to be strong, as demand from 5G and AI sectors picks up. Revenues generated by 7nm and more advanced nodes will show increases quarter after quarter, pushing Taiwan-based semiconductor foundries' ASP higher.Taiwan-based semiconductor foundries can expect growth momentum because of a number of reasons: Apple's new iPhones are entering the market; Huawei's supply chain is seeing orders return; the traditional high season for the electronics industry is coming; and demand for 5G applications is emerging.But the growth momentum may be limited with the smartphone market saturating and consumers putting off phone upgrades pending full 5G commercialization, on top of uncertainties over the US-China trade tensions. Accordingly, Digitimes Research estimates Taiwan-based semiconductor foundries' whole-year 2019 revenues will decline 2.4% from the level seen a year ago.

The DRAM sector enjoyed robust growth in 2018, but oversupply coupled with weakening economy and demand has sent memory prices crashing this year. But there may be good news around the corner, with Adata's chairman expecting DRAM pricing to begin to stablize next month. Some others from the semiconductor supply chain are more consevative about their outlook for second-half 2019. Eight-inch foundry fabs expect their utilization rates to fall on weak demand for automotive and consumer ICs. Most agree that 2020 will see improvements thanks to 5G commercialization. PCB makers expect 5G smartphones to need bigger mainboards to accommodate more RF modules, which will boost their sales.Memory prices to stabilize in 2H19, says Adata chairman: DRAM contract market prices are likely to stop falling and begin to stabilize in September, according to Simon Chen, chairman for memory module maker Adata Technology.8-inch fab utilization rates may not rebound until 2020: Eight-inch fab utilization rates continue to fall on weak demand for automotive and consumer ICs and are unlikely to rebound until the first half of 2020, according to industry sources.PCB makers to gain from enlarged mainboards for 5G smartphones: As mainboards for 5G smartphones will surely be enlarged significantly to accommodate many more RF (radio frequency) modules, Taiwan-based PCB makers including Zhen Ding Technology, Unimicron and Compeq Manufacturing as well CCL supplier Elite Material are expected to gain revenue growth momentum from the 5G smartphone sector, according to industry sources.

For TSMC, Moore's Law is far from being dead. While it has been keen to grow chip density on the transistor level, advancing packaging technology is one of the possible ways TSMC is embracing to improve density by stacking multiple layers of transistors into what it calls monolithic 3D ICs. It remains debatable whether Moore's Law is approaching its limits. But in the display industry, panel makers seem to have already accepted the fact that fab generations have reached its ceiling at 10.5G. At any rate, building higher-generation fabs would make little sense for an already oversupplied market. But the good news for lesser TV makers is that they can buy cheaper panels to produce large-size sets. TSMC advancing 3D IC integration technology: TSMC continues to move forward with its 3D-IC integration technology development, pursuing cutting-edge performance resulting from heterogeneous components that are "seamlessly connected."China tier-2 TV brands ramping up shipments: China's second-tier TV brands are ramping up shipments of over 60-inch TVs globally as the availability of less expensive panels from BOE Technology has helped improve their competitiveness, according to industry sources.

Apple is set to release its new iPhones next month, but shipment prospect of the new devices are expected to be weak. Apple's inventory preparations for the new iPhones for 2019 will be lower than the 90 million units it prepared for the launch of the XR, XS and XS Max in 2018, with actual shipments of the upcoming devices to reach only 70 million units this year, according to Digitimes Research. The new iPhones' shipment outlook may be weak, but Apple remains one of the biggest clients of TSMC, who manufactures the A13 processor at its 7nm node. For TSMC, sales in second-half 2019 and in 2020 will be robust, driven by strong demand for its 7nm and more advanced processes.Apple new iPhone shipments to reach 70 million units in 2019, says Digitimes Research: Apple's new iPhones to be released in autumn 2019 are expected to see shipments of only 70 million units overall in 2019, less than the amount contributed by the iPhone XR, XS and XS Max in 2018, according to Digitimes Research's estimates.TSMC to see revenues surge in 2020: Growing chip demand for 5G- and AIoT-related applications will boost TSMC's revenues for 2020, which are expected to climb over 10% on year, according to industry sources.