Global server shipments picked up 11.2% sequentially in the third quarter of 2019, a growth similar to Digitimes Research's forecast made in the previous quarter, and are expected to see a mild on-quarter increase in the fourth quarter, better than Digitimes Research's original anticipation of a slight drop. The server industry will also see its first quarterly on-year growth in 2019 in the fourth quarter.With downstream clients having finished digesting their excess inventory, the worldwide server shipments have resumed growth since the third quarter, but volumes for the entire year of 2019 are still expected to decline, Digitimes Research estimates.Facebook was the largest client of Taiwan makers in terms of shipments in the third quarter of 2019, surpassing the original top-2 Hewlett-Packard Enterprise (HPE) and Dell. Since Facebook's cloud computing platform is mainly composed of multi-node lightweight motherboards, the company's demand for the boards (each counts as one server) has been enormous and is growing rapidly, and should further boost Facebook's shipment share in the fourth quarter.Facebook's increasing orders are primarily benefiting its two major suppliers Quanta Computer and Wiwynn. With a rising share in Facebook's orders plus a dramatic increase in orders from Google, Quanta's server shipments leapfrogged Wistron and Foxconn Technology Group (Hon Hai Precision Industry) to become the second largest server maker worldwide in the third quarter, behind only Inventec.Major server makers are mostly expected to witness sequential shipment growths in the fourth quarter with Quanta to continue obtaining more market share.China-based server brand Inspur activated its in-house production lines to manufacture server motherboards in Suzhou, China in June 2019. So far, the volumes produced at the site per month are still limited, but may challenge Taiwan's dominance in the worldwide server industry in the long run.

China has shown strong ambition to raise its IC self-sufficiency. Although Samsung, SK Hynix and Micron have been victorious following a consolidation of the global DRAM industry at the expense of Taiwanese makers, Chinese newcomers seem to be undeterred by the dominance of the top-3. In the flash memory market segment, order visibility has improved, thanks to significant demand for 5G and AIoT applications. And the coming of the 5G era is prompting phone vendors to upgrade their device designs, with Samsung and Huawei likely to adopt VC cooling solutions for the 2020 smartphone lineups. But it remains to be seen whether next year's iPhone will all come with OLED screens, as the LCD iPhone 11 has seen unexpectedly strong sales.China DRAM rise looming, may reshape global market in 5-10 years: The global DRAM market, now over 90% controlled by three major players Samsung Electronics, SK Hynix and Micron, is likely to experience a structural shakeup in the next 5-10 years, with a new DRAM business unit set up by China's government-backed Tsinghua Unigroup expected to pose the largest potential threat to the top-3.Flash memory demand for 5G, AIoT picking up: Flash memory chipmakers have seen demand for 5G and AIoT related applications ramp up with order visibility stretched through the first quarter of 2020, according to industry sources.Samsung, Huawei embracing VC cooling solutions for smartphones: Use of vapor chamber cooling modules for smartphones is set to expand significantly in 2020 as Samsung Electronics and Huawei are likely to have all of their 5G phones slated for launch next year equipped with VC-based heat-sink solutions, according to industry sources.Apple reportedly increasing component orders for LCD iPhone: Apple reportedly has ramped up component orders for its LCD-based iPhone 11 that has seen better-than-expected demand but reduced those for iPhone 11 Pro Max that has seen flat sales, accordig to sources from Taiwan's IC supply chain.

The arrival of 5G is ushering in hardware upgrades to support related applications and services. It is expected more 5G smartphones will come with displays offering high refresh rates that can enhance user experience. It remains to be seen whether Apple will launch its first 5G iPhone in 2020, or will adopt displays with 120Hz refresh rate, but the iPhone 11 series reportedly are selling much better than expected, boosting orders for its VCSEL supply chain. Smartphone panels to come with higher refresh rates in 2020: Refresh rates of smartphone panels used in the 5G era are likely to be upgraded to 90Hz or even 120Hz from the current 60 Hz as displays with higher refresh rates will enhance greatly user experience, according to industry observers.VCSEL foundry houses, backend specialists see strong demand: Taiwan's GaAs foundry houses and VCSEL and DOE (diffraction optical element) backend specialists are set to land more follow-up orders from Apple in the fourth quarter of 2019 and beyond, thanks to higher-than-expected sales for the iPhone 11 lineup, according to industry observers.

Taichung Software Park in central Taiwan has set up an accelerator base inviting firms to help speed up applications of innovations developed by startups in the park, according to the park's administration.The park has attracted 11 startups so far to set up operations there, focusing on smart manufacturing, smart healthcare, smart retail and smart living. They will be allowed to access resources of other software industry players in the park, the administration said.At the moment, Data Systems Consulting is one of the major startup application accelerators already operating in the park, dedicated to helping startups with the last-mile processes for commercialization of their innovations.Company chairman FY Ku said Data Systems has positioned itself as a post-incubation service provider dedicated to offering startups POC (proof of concept ) and POB (proof of business) services, which are short of supply for the moment.Ku said it is difficult for startups to find potential clients for testing their innovations, and his company can help them find customers after their innovations pass POC and POB processes at Data Systems.

For IT firms, the PC segment isn't attractive anymore, but servers are a different story. The server market has slowed down in 2019, but growth momentum is expected to resume in 2020. Suppliers of chips for severs are set to enjoy a boom in shipments. But for PC vendors, the weakening demand for gaming devices mean they have to look elsewhere for growth. Asustek is turning to AIoT, ready to spend big on investments in and acquisitions of related businesses, while MSI is eyeing Creator PCs.Peripheral server chips vendors gaining from datacenter demand: As web giants in the US and China have gradually reactivated construction of datacenters since the start of the fourth quarter of 2019, the global server market is on track to renew growth in 2020, providing bright shipment prospect for Taiwan-based vendors of peripheral chip solutions, according to industry sources.Asustek, MSI seeking new growth from AIoT and Creator PCs: With gaming PC demand slowing down, Asustek Computer and Micro-Star International (MSI) are both looking for new sales and profit growths from emerging sectors such as Creator PC and AIoT, to offset their weakening gaming PC businesses, according to industry sources.

Taiwan government-sponsored National Applied Resarch Laboratories (NARLabs) will showcase five smart systems for monitoring natural disasters at SecuTech Thailand 2019 in Bangkok during October 28-31.The systems respectively concern smart city solutions, bridge safety management, earthquake early warning, decision-making assistance, and flooding early warning, NARLabs said.The smart city system is a platform for displaying 3D GIS (geographic information system), modeling of building information, satellite images, drone-scanning data, LiDAR point clouds and their modeling, with this multi-display for use to monitor flooding, bridges, buildings dams, cultural places, traffic conditions and consequence of earthquakes.The bridge safety management system can be used to monitor physical conditions of bridges for predictive and preventive maintenance.The earthquake early warning system can detect primary seismic waves (P-waves) and then predict secondary seismic waves (S-waves) based on AI technology. If S-waves exceed a certain level of intensity, the system will send early warning. The system can be operated without an earthquake observation network and is particularly suitable for factory buildings and cities, NARLabs said.The multi-dimension decision-making assistance system is a platform for fused display of multi-dimension information to allow users to browse 3D spatial images and data on underground features such as pipelines and geological faults.The smart flooding early warning system can predict flooding based on big data analysis of predicted rainfall and tide levels.

Taiwan hopes to cultivate its own unicorn startups by leveraging major services provided by Amazon Web Services (AWS), which is now maintaining operations in the government-funded Startup Terrace in New Taipei, according to the nation's premier Su Tseng-chang.Wu made the statement after hearing a briefing about the latest development of the international startup hub in northern Taiwan, which has attracted 15 accelerators, including AWS.AWS has promised to help develop 150 startups in Taiwan within three years by cultivating cloud talent, fostering startup teams, promoting international cooperation and helping enterprises with business transformations.The Taiwanese government will provide multiple support for tech startups boasting strong potentials, including sufficient funds, sound regulations, commercial outlets for innovations and assistance in international marketing, according to the Ministry of Economic Affairs (MOEA).The Startup Terrace has so far attracted as many as 132 startups and accelerators from 10 countries to set up operations there, mainly focusing on AI, IoT, smart healthcare and big data, by offering them one-stop services and tax incentives, MOEA said.

Taiwan's Ministry of Science and Technology (MOST) has reported success in showcasing 12 local startups at MedTech Conference 2019 in the US, during which they attended 180 sessions of matchmaking for capital, talent and technology.The startups attracted much attention from global medical giant firms and academic and research institutes, said MOST, which set up a national pavilion under the Taiwan Tech Arena branding at the event in Boston last month.Showcasing their research and AI capability, the startup teams focused on three applied fields - rapid diagnostic test, health care test and innovative medical device, which are in line with the trends of bio-tech markets in American East, MOST said.One of the startups, Heroic-Faith Medical Science, demonstrated its latest artificial intelligence (AI) combined with respiratory monitoring, and was approved by the US Food and Drug Administration FDA, the American College of Anesthesiology, the American Dental Association, and the US Military Medical Unit, said MOST.

TSMC apparently can't wait to extend its technology leadership. It has asked the Southern Taiwan Science Park to ready the land it has alloacted for the foundry's 3nm fab project by the end of 2019, a few months ahead of its original schedule. In the IT supply chain, Taiwan-based ODM Quanta Computer is said to be quitting the assembly work for the next-generation Apple Watch to be launched in 2020. It remains to be seen whether the next-generation Apple Watch would come with OLED screens, but backend service providers believe demand for OLED drivers ICs will surge in 2020.TSMC to accelerate 3nm fab construction: TSMC is expected to step up the construction of its advanced 3nm wafer fab after securing 30 hectares of land in the Southern Taiwan Science Park (STSP) by the end of 2019, according to industry sources.Compal, Foxconn to share next-gen Apple Watch orders in 2020: Quanta Computer will not serve as a production partner for Apple's next-generation Apple Watch to be launched in 2020, and instead Compal Electronics and Foxconn Electronics will share the orders, according to industry sources familiar with the matter.Backend demand for OLED driver ICs to surge in 2020: Backend demand for OLED driver ICs is set to take off in 2020, with COP (chip on plastic) and COF (chip on film) likely to co-exist as main packaging processes, according to industry sources.

China's top-3 IC backend houses Jiangsu Changjiang Electronics Technology (JCET), Tianshui Huatian Technology and Tongfu Microelectronics (TFME) have seen sales pick up in the second half of 2019, with the growth momentum set to carry into 2020, according to Digitimes Research.JCET, Huatian and TFME saw their combined sales increase 10.3% sequentially to CNY8.69 billion in the second quarter of 2019, following two quarters of sequential drops, said Digitimes Research.China's IC backend industry posted a 5.4% on-year increase in revenues for the first half of 2019, with the top-3 players' combined revenues accounting for 16.2%.With growing demand for China's homegrown chips and for emerging 5G and automotive applications, JCET, TFME and Huatian, along with China's overall IC backend sector, will be gearing up for a strong year ahead, Digitimes Research believes.JCET remains the technology leader among China's IC backend service providers, with its complete offerings including fan-out WLP, SiP, TSV, flip-chip, bumping, PoP and PiP services. Nevertheless, JCET is facing more competition from some foundry chipmakers, which have stepped into the high-end IC backend segment.