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.

Software as a Medical Device (SaMD) is emerging as a new smart healthcare application, but what counts most for software developers to successfully tap into the medical AI domain is that they must know first what problems their solutions can address for the healthcare industry, according to Mishal Patel, head of health informatics at AstraZeneca (AZ), a UK-based biopharmaceutical company.Patel said the value of innovative healthcare software products lies in their ability to solve problems seen in the medical treatment process, such as those seen in consumables management and analysis of medical records. Image or text algorithms can also be applied to help hospitals more accurately monitor the volumes of drugs and intravenous drips used and the life of surgery instruments in use, thus allowing hospitals to make timely replenishments, maintenances and replacements.Patel said the healthcare industry hopes AI can help analyze patients' medical histories to enhance development of new drugs, but drug development is highly complicated. Not only better clinical trials must be designed, but traits of the new drugs and the conditions of the patients should also be more precisely monitored by incorporating tech elements.He said the accuracy and accessibility of data is also crucial in building effective algorithms, stressing the concept of "FAIR" (findable, available, interpretable and researchable) and the need to unify data formats.

Taiwan-based IC designer house MediaTek reportedly is on track to roll out its first 5G SoC series, codenamed MT6885, in fourth-quarter 2019, ready for commercial production in first-quarter 2020. The 5G market may see explosive growths starting next year, but until then, the US-China trade war remains a crucial factor, plaguing markets and industries with uncertainty and disrupting seasonal patterns. Sales of smartphones in China surged 22.4% sequentially in the second quarter, but are expected to drop 7.1% in the third quarter. In China's semiconductor sector, foundry house HSMC CEO Shang-yi Chiang has told Digitimes why chiplets promise to be a solution in post-Moore's Law era.MediaTek 5G SoC launches on track: With support from its partners including TSMC, and backend houses such as ASE Technology Holding, MediaTek's development of SoC chips designed for 5G-enabled smartphones is on schedule with volume production to kick off in the first quarter of 2020, according to industry sources.China smartphone sales up 22.4% on quarter in 2Q19, says Digitimes Research: Sales of smartphone in the China market increased 22.4% sequentially to 93.4 million units in the second quarter of 2019 as local brands were keen to roll out new models after inventories in the channels had been partly cleared out in the previous quarter, according to Digitimes Research. On a yearly basis, second-quarter shipments were still down 1.6% from a year earlier.China foundry HSMC to push chiplet standard formulation, says CEO Shang-yi Chiang: While Moore's Law is approaching its physical limits, only a few could still afford the expensive game of process shrink. And when the post-Moore's Law era comes, semiconductor firms, though lost in Moore's Law, may realize that there is another solution: chiplets, according to Shang-yi Chiang, CEO of China-based foundry Hongxin Semiconductor Manufacturing Corp (HSMC).

Sales of smartphone in the China market increased 22.4% sequentially to 93.4 million units in the second quarter of 2019 as local brands were keen to roll out new models after inventories in the channels had been partly cleared out in the previous quarter, according to Digitimes Research. On a yearly basis, second-quarter shipments were still down 1.6% from a year earlier.The top-five smartphone vendors in China in the second quarter were Huawei, Vivo, Oppo, Xiaomi and Apple, with their combined share reaching as high as 95%. Separately, Huawei, Vivo and Oppo saw their respective shares improve in the second quarter compared to a year earlier, and Xiaomi and Apple experienced setbacks, according to Digitimes Research's latest China smartphone report.Looking into the second half of 2019, smartphone sales in China are expected to suffer double-digit declines on year in both the third and fourth quarters, as US-China trade disputes have again intensified since August and consumer confidence in China is unlikely to recover significantly amid a weak economy.Huawei is expected to see its shipments growth slow down on year in the second half, and other local brands will brace for double-digit declines. Foreign brands will see shipments improve sequentially in the second half but will drop over 10% on year.

Chinese smartphone vendors, particularly Huawei, scrambled to stock up components in the second-quarter of 2019 amid escalating US-China trade tensions. Such precautionary orders sharply boosted second-quarter smartphone AP shipments, but are set to undermine shipments in the third quarter, according to Digitimes Research's latest China Smartphone AP quarterly report. In the IT sector, new products from Nvidia, AMD and Intel are expected to generate some growth momentum for the motherboard and graphics card vendors in the second half of 2019, but extent of growth will be limited by uncertainty of the trade war. In the memory sector, a seasonal pick-up in demand amid supply constraints has rallied NAND flash wafer pricing.China smartphone AP shipments to drop 7.6% in 3Q19, says Digitimes Research: Smartphone application processor (AP) shipments to China vendors registered a larger-than-expected increase sequentially in the second quarter of 2019, thanks to deliveries made in advance to avoid the burden of potential tariffs from the US, according to Digitimes Research.Motherboard, graphics card vendors to see shipments grow in 2H19: Thanks to seasonality and new products from Nvidia, AMD and Intel, motherboard and graphics card vendors, particularly Asustek Computer and Micro-Star International (MSI), are expected to see rising shipments in the second half of 2019 though the extent of growth will be restrained by the US-China trade tensions, according to sources from the upstream supply chain.NAND flash wafer prices rise above cash cost levels: NAND flash wafer prices have been rising in the third quarter of 2019, and have exceeded manufacturers' cash cost levels, according to industry sources.