Server demand may have been slow in 2019 with clients adjusting inventory, but orders are expected to pick up in 2020. Major suppliers are eyeing different segments for server shipment growth. The year 2020 is promising not just for the server supply chain; the semiconductor sector is also looking forward to strong growth, to be fueled particularly by 5G commercialization. MediaTek is expected to ship over 50 million 5G SoCs in 2020, supporting both sub-6GHz and mmWave. Apple is also expected to launch its first 5G iPhone next year, but for PCB makers, the next-generation iPhone ecosystem will still be dominated by a couple of SLP suppliers.Taiwan white-box server shipments to rebound in 2020: Taiwan's white-box server shipments are expected to rebound in 2020 after public cloud datacenter players finish adjusting their inventory levels in 2019, according to sources from the upstream supply chain.MediaTek 5G SoC shipments likely to top 50 million units in 2020: MediaTek is expected to ship over 50 million 5G SoC chips in 2020, during which it will roll out three to four 5G SoC series supporting both sub-6GHz and mmWave, according to industry sources.Two PCB makers expected to share bulk of SLP orders for next iPhone: Taiwanese PCB maker Zhen Ding Technology (ZDT) and Austrian peer AT&S are expected to together land at least 50-60% of substrate-like PCB orders for Apple's next iPhones to be launched in 2020, according to industry sources.

Semiconductor players including TSMC, UMC as well as GaAs foundries and backend firms are seeing their production utilization rates picking up as demand from clients and emerging applications has been rising. Meanwhile, demand for chips used in TWS earphones is also expected to soar in 2020.TSMC, UMC enjoy ramp-up in China fab utilization rates: Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics (UMC) have both seen their China-based wafer fab utilization rates pick up recently, driven by growing demand from China's local fabless chipmakers, according to industry sources.GaAs foundries, backend firms see capacity utilization rates climb: GaAs IC foundries including Advanced Wireless Semiconductor (AWSC) and Win Semiconductors have both seen their 6-inch fab capacity utilization rates ramp up, driven by robust demand for radio-frequency (RF) components and power amplifiers designed to support sub-6GHz 5G and Wi-Fi 6 (IEEE 802.11ax) wireless technologies, according to industry sources.Chip demand for TWS devices to surge sharply in 2020: Global shipments of TWS (true wireless stereo) earphones are expected to surge sharply to 150-200 million sets in 2020 from around 100 million sets estimated for 2019, providing strong revenue growth momentum for Taiwan's chips supply chain players next year, according to industry sources.

Sony and Samsung Electronics have been competing head to head in the CMOS image sensor (CIS) market in order to maintain their leadership, using their respective technology advantages, according to Digitimes Research.Sony currently accounts for over 50% of the global CIS market, buoyed by the launch of an array of 40-megapixel CIS products that have been adopted by a number of handset makers for flagship models.Sony is integrating CIS and edge AI processing technology utilizing stack architecture as it seeks to further expand its market share by exploring the applications for CIS products, Digitimes Research said.Meanwhile, Samsung has been focusing on specs upgrades of CIS devices, using higher levels of manufacturing processes that are capable to roll out CIS products with higher pixel sizes and pixel densities than comparable models from Sony.Samsung's efforts to roll out CMOS image sensors with 108-megapixel in cooperation with Xiaomi demonstrate its ambition to take the lead in the CIS industry, Digitimes Research said.Shipments to the handset segment accounted for 60% of global CIS revenues in 2018, and the handset sector will remain the largest application market for CIS products through 2023.Meanwhile, CIS devices for automotive applications are gaining momentum, expecting to grow at a CAGR of 29.7% from 2019-2023, Digitimes Research estimates.

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.