The server industry is having a weak 2019 due to high inventory levels at clients, but global server shipments are expected to grow around 5% on year in 2020 as clients' inventory disgestion has almost reached an end. There are three major factors driving the server market from 2019 to 2024: more enterprises have begun pushing for digital transformation, AI applications are growingly popular and cloud datacenter firms are eagerly promoting hybrid cloud systems, according to Digitimes Research's latest 5-year server forecast report.Surging 5G data transmission volumes are also expected to boost server demand starting 2023.Global server shipments are expected to see a CAGR of 6.5% from 2019-2024 with Microsoft, Amazon Web Services (AWS), Google and Facebook all planning to establish new datacenters worldwide, eyeing the potential demand, Digitimes Research's data shows.As cloud computing services have become common, multiple cloud management and hybrid cloud platforms have become a new battlefield among server players. The players have also been unveiling their hyper-converged infrastructure (HCI) products that highly integrate servers' hardware architecture with virtualization technologies to cut down costs and time for clients learning heterogeneous resource integration.HCI has already become a technological development trend of the server industry, while many have started connecting their software defined datacenter (SDDC) with HCI as a way to assist enterprise to conduct digital transformation.To achieve a higher AI computing efficiency, chipmakers are looking to divide related chips into two different categories: training and inference, and the move is expected to separate AI-specific servers into two different specification settings.More enterprises are expected to choose to use AI-specific servers to develop their AI models due to concerns over costs and security and with 5G to come online in the near future, demand for AI-specific servers is expected to surpass that for AI model training servers between 2020-2022.In terms of network data processing capability, the server market currently has two different markets: large-size datacenter and standard enterprise with both having 25GE as the basic network speed. As AI applications and multimedia and game streaming are becoming popular, large-size cloud computing datacenters are mainly seeking stability and high expansibility, making SerDes (serializer/deserializer) interface a new spec standard.The network speed of 400GE has already been applied in large datacenters at the moment and 800GE is expected to become available by 2021. For regular enterprises, demand for 100GE is currently rising stably.

It is not just application processors vendors that have been scrambling to secure production capacity for making their 5G offerings at TSMC's 7nm node, which is also catering to AI processors developers, such as Nvidia, Xilinx and Bitmain. Earlier this year, a cloud was hanging over the world's top foundry house amid global economic uncertainty that dampened demand, but strong demand emerging later for its advanced manufacturing processes has now promised a fruitful year for TSMC in 2019. A major driving force for TSMC's strong growth momentum is 5G applications. And within the 5G chip segment, the sub-6 GHz standards are expected to gain much traction in China. TSMC 7nm process attracts multiple orders for AI processors: TSMC with its competitive 7nm process technology has obtained orders for made-for-AI chip processors from Nvidia, Xilinx and Qualcomm, and a number of China-based vendors such as Huawei, Bitmain and Alibaba, according to industry sources.TSMC to post record 2019 revenues: TSMC is expected to see its third-quarter revenues rise and post another sequential revenue increase in the fourth quarter. The anticipated rebound in revenues during the second half of 2019 will likely allow the pure-play foundry to enjoy another year of record-high sales, according to market sources.Demand for sub-6 GHz 5G chips to gain momentum: Global demand for 5G chips supporting the sub-6 GHz standards is likely to gain momentum as telecom operators in China, which has the potential to become the world's largest market for 5G phones, have given the priority to the development of related sub-6 GHz technology instead of mmWave one, according to industry observers.

The Industrial Development Bureau has started operation of AI Hub, a web-based one-stop AI application platform that is part of the 4-year (2018-2021) Taiwan AI Action Plan, according to the Ministry of Economic Affairs (MOEA).There are 16 industry associations and organizations, 72 AI startup businesses and nearly 600 enterprise users of AI solutions participating in the hub, MOEA said.The hub provides three core services: Needs assessment (web-based questionnaires are used to understand enterprise users' AI application and thereby assess their AI capability, diagnose their problems and make recommendations.); solution marketplace (AI solutions available in Taiwan are are collected to let enterprise users search for needed AI solutions and try online AI algorithms to help them apply AI to business decision making.); and service on demand (AI start-up businesses and experts provide consulting services to meet enterprise users' demand, including proved cases of AI application.).The hub is an innovative AI ecosystem to boost industries' smart operation and development of AI application in Taiwan, MOEA indicated. Small- to medium-size enterprises and companies in traditional manufacturing are target users of AI Hub at present.AI Hub inaugural ceremonyPhoto: Michael Lee, Digitimes, October 2019

Device pricing is expected to be a major factor determining the pace of growth in China's 5G smartphone market next year, and Chinese vendors are keen to make sure that their phones are affordable. Naturally they are demanding their componets suppliers lower their quotes. And application processor vendors are also gearing up for the 5G smatphone market. MediaTek, which expects explosive growth in the 5G smartphone shipments globally in 2020, is set to roll out more 5G SoCs next year. Meanwhile, Taiwan's IT supply chain is seeing more server clients come knocking on their door. Dell reportedly is set to purchase more from Taiwanese server components suppliers to avoid the US tariffs on Chinese products.Quotes for 5G smartphone components face downward pressure: Handset component suppliers, particularly those for camera modules, displays and acoustic devices, are facing increasing pressure from China's handset vendors to lower their quotes for components for 5G-enabled phones as Chinese vendors are aiming at reducing 5G phone prices significantly in 2020, according to sources from Taiwan's handset supply chain.MediaTek to roll out 2 SoC chips for sub-6GHz in 1H20: MediaTek is scheduled to roll out the company's first 5G SoC for sub-6GHz networks in early 2020, with plans to launch its second 5G mobile chip that will also support sub-6GHz in the first half of next year, according to industry sources.Dell reportedly to increase server purchases from Taiwan: Dell reportedly plans to increase its server purchases from Taiwan, and has also scaled up its workforce locally, according to industry sources.

Global production capacity for large-size LCD panels (9-inch and above sizes) will undergo a major shift in 2019-2024, during which the ratio of China's capacity to global total large-size panel capacity will increase to over 50-60% due to continued capacity ramps by its major players including BOE Technology, China Star Optoelectronic Technology, HKC and China Electronics Corporation (CEC), according to Digitimes Research.The relentless capacity expansions by China's panel makers will not only result in massive losses at most other panel players in the region, but also prompt particularly Korea's makers to realign their production lines, with plans to halt the operations of a number of their 7.5G/8.5G LCD lines during the period beginning the second half of 2019 to 2021, Digitimes Research notes.While reducing their LCD panel production, Korea's makers are committing more investments to building up their capacity for OLED and QD-OLED panels. As a result, the proportion of Korea's capacity for large-size LCD panels to global production capacity will drop to about 10% by 2024, while Taiwan's makers will hold a slightly over 20%, Digitimes Research estimates.During the 5-year forecast period, shipments of large-size LCD panels to the four major application segments - TVs, monitors and AIO PCs, notebooks and large-size tablets - will all decline, albeit slightly, year-on-year.Shipments of large-size LCD TV panels will see its CAGR lag behind those for other applications as Korean makers are accelerating the buildups of their OLED production lines in Korea and China. However, shipments of large-size LCD panels for "other" applications such as automotive panels and digital signage boards are expected to enjoy a CAGR of nearly 10% during the forecast period.

Differentiation and customization are two major concerns for biomedical startups when they foray into the market for smart healthcare solutions, as many hospitals and care centers hope to have their own distinct medical services and technologies, according to Ken Yu, CEO of iMedtac, a Taiwan-based provider of AIoT healthcare solutions.Yu said Taiwan's ICT and medical resources can be integrated to enhance cross-department management, medical treatment flow improvement and medical intelligence system operations. At the moment, China outperforms Taiwan in some medical departments and technologies, but Taiwan still has its own advantages in the smart healthcare sector, including solid inter-department integration, sound hospital management and strong data accuracy, Yu commented, adding that Taiwan has to accelerate incorporation of new technologies and applications to build its leadership in the sector.In Taiwan and Japan, construction of long-term care centers has been unable to catch up with the aging of the population, and therefore the medical sector agrees that homecare services will see increasingly important development. Yu said call centers and cloud systems can be integrated to have nurses and care staffers render services to the needy within one square kilometer. Bolstered by the ICT technology, any given care center can build a community medical and care ecosystem while also addressing part of the shortages of homecare forces.Long-term care institutions differ from general businesses in profit-gaining models and smart healthcare devices will entail higher prices during the R&D stage and initial market penetration. Accordingly, to secure smooth development of the smart long-term care industry, sales of services and renting of the devices will become a more feasible practice. In addition, based on the top-down model, superintendents and board of directors at hospitals will determine what smart software and hardware solutions to incorporate so as to boost the performance and efficiency of doctors, examiners, nurses, and treatments for patients, according to Yu.

The semiconductor supply chain is eyeing the robust demand from 5G commercialization. IC designers are designing chips supporting 5G, and in turn their backend partners are also gearing up development of AiP packaging process to suppor their new offerings. And for 5G smartphones, vendors upgrading camera functionalities is good news for both lens makers and CMOS image sensor suppliers, such as Sony and Omnivision, both of which reportedly see strong demand from Huawei, which is expected to see robust smartphone shipments next year despite the US trade sanctions. And others in China's IC supply chain are also stepping up efforts to improve the country's semiconductor self-sufficiency. YMTC is looking to improve its 64-layer 3D NAND flash memory production yield rate to facilitate commericial production.IC backend service providers gearing up for AiP packaging: TSMC and other major Taiwanese IC backend service providers including ASE Technology and Powertech Technology (PTI) are ready to offer, or have exerted efforts to develop, AiP (antenna-in-package) packaging process for the manufacture of mmWave 5G devices, according to industry sources.Sony, OmniVision enjoy robust demand from Huawei: CMOS image sensor suppliers Sony and OmniVision have both enjoyed robust demand for multi-camera smartphones from Huawei, with their regional distributors and backend suppliers being among the beneficiaries of Huawei's strong demand, according to industry sources.Yangtze Memory to ship 64-layer NAND chips for SSD: Yangtze Memory Technology (YMTC) is aggressively improving its 64-layer 3D NAND flash memory production yield rate, gearing up to ship the chips for SSD applications in the first quarter of 2020, according to industry sources.

For biomedical startups, solving industry issues and integrating cross-domain connections will be their two core values, and they will have a chance of enjoying unlimited growth if they start with broad industry perspectives and move to build cross-nation, cross-industry linkages, according to Ken Yu, CEO of smart healthcare startup iMedtac.In the smart healthcare field many professors and physicians have joined forces to work out innovative service solutions step by step, Yu said, and such innovations will see higher clinical acceptability thanks to their integration of domain knowledge and technologies applicable to diverse medical departments.But from the perspective of commercial development, Yu stressed, the technical services presented by startups must be able to solve biomedical industry issues rather than address issues at individual medical departments, in order to support the integration of the R&D teams for both service product lines and software/hardware.Integrating resources and building connections are highly crucial for developing regional markets. Taiwan boasts strong R&D power and good pilot areas for experiments, but when startup teams extend their services to China, Southeast Asia, the US and Europe, they may encounter different industry cultures and have to adjust their business models. Also, their medical service contents have to be slightly adjusted in line with different races and genes, according to Yu.Medical devices need support of cross-domain integrationPhoto: Mark Tsai, Digitimes, August 2019

Notebook brand vendors who hesitated about moving production out of the China in the wake of the trade war are now determined that they need to do so, as the disputes between the two superpowers are unlikely to end anytime soon. The vendors are now asking their ODMs to accelerate the relocation of their production out of the world's factory. While the notebook market is unlikely to see any major growths next year, the smartphone market is expected to see strong stimulation from 5G commericalization. MediaTek has become more upbeat about 5G smartphone shipments in 2020, and has increased its orders for 5G SoCs to be manufactured at TSMC.Notebook brand vendors accelerating production relocation out of China: The ongoing trade tensions between the US and China is prompting notebook brand vendors to have their ODMs accelerate production relocation out of China, with Compal Electronics to expand capacity in both Taiwan and Vietnam, according to sources from the upstream supply chain.MediaTek increases wafer start orders for 5G chips at TSMC: MediaTek reportedly has increased its wafer start orders for 5G chips at TSMC as more of its handset clients in China have taped out 5G-focused smartphones using its SoC solutions, according to industry sources.

Despite the US trade sanctions, Huawei has never stopped foraying into the 5G market, neither on the equipment side nor the mobile device segment. Its 5G smartphones with major camera function upgrades are expected to see impressive shipments next year. Taiwan-based suppliers of camera lenses can expect a fruitful year in 2020. Chip vendors are also gearing up development of optical in-display fingerprint sensors for smartphone applications, and their backend service partners are ready to provide full support. Huawei camera lens orders may reach 1.5 billion units in 2020: Huawei's procurement of smartphone camera lenses for 2020 may reach as high as 1.5 billion units, according to sources from the upstream supply chain.Optical fingerprint sensors shipments to ramp up in 1Q20: Taiwan's IC designers are set to ramp up shipments of diverse optical in-display fingerprint sensors for smartphone application starting in the first quarter of 2020, and backend specialists such as ASE Technology Holdings and ChipMos Technologies are also ready to give full support with wafer-level and COF packaging processes, according to industry sources.