Worldwide notebook shipments rose over 20% sequentially in the second quarter of 2019, but volumes in both the third and fourth quarters are expected to experience sequential declines, according to Digitimes Research's latest notebook tracker.The growth in the second quarter was primarily due to brand vendors building up extra inventory as a precaution against the possibility of the US imposing a 25% tariff on notebook imports.However, because of the high volume of the second quarter and the fact that Intel's new 14nm capacity will not become significantly available until September at the earliest, brand vendors' orders are expected to drop sequentially in the third quarter.For the fourth quarter, the worldwide shipments will slip further sequentially as a result of a number of factors: China's weak economy; PC replacement demand from the enterprise sector reaching an end; and a lack of innovations despite Intel having resolved its CPU shortages.With brand vendors stocking extra inventory in late May in response to the US-China trade tensions and Chromebooks' shipment expansion in the North America education market and their entry to the India market, worldwide notebook shipments performed much stronger than expected, growing by over 5% on year, Digitimes Research's figures show.The globally biggest vendor Hewlett-Packard (HP) is expected to see its shipments grow every quarter in 2019 to peak in the fourth quarter. Although Lenovo's large-scale procurement orders from India that had begun shipments in March have already reached an end, the company will continue enjoying on-year shipment growth in the second half of 2019.Dell's shipments will slip sequentially in both the third and fourth quarters as the replacement trend in the enterprise sector is approaching the end. Apple updated its MacBook Air and MacBook Pro in July, but the new 16-inch MacBook Pro that is set to be released in October is unlikely to stimulate significant demand due to its high pricing.Compal Electronics, which achieved a quarterly notebook shipment record in the second quarter, is expected to see volumes drop every quarter in the second half of the year due to the completion of some procurement orders and clients' order redistribution.Inventec, which also achieved a shipment record in the second quarter, will continue enjoying rising orders from HP and Acer in the second half and is expected to be the only Taiwan maker to see sequential growths in both third- and fourth-quarter shipments.

The US and China have restarted trade talks, but the cloud hanging over Chinese vendor Huawei remains. The latest news coming out of the supply chain is that Huawei has cut components orders for true wireless stereo (TWS) devices. But other IC designers, namely those supplying server chips, are upbeat about the second half of 2019. Digitimes Research estimates that global server shipments will grow almost 13% in the third quarter.Huawei slashes short-term IC orders for TWS devices: Huawei reportedly has reduced its short-term component orders for true wireless stereo (TWS) headsets amid the protracted US-China trade disputes, affecting sales of some Taiwan-based IC suppliers that provide related ICs to Huawei for production of TWS headsets and battery charging boxes, according to industry sources.Taiwan IC design houses expect pick-up in orders for servers: Taiwan-based IC design houses expect to enjoy a seasonal pick-up in orders for servers and data centers in the second half of 2019.Global server shipments to increase 12.8% in 3Q19, says Digitimes Research: Global server shipments are expected to increase 12.8% sequentially in the third quarter of 2019 with a flat on-year performance, but shipments for all of the year are likely to drop on year due to a sharp shipment decline in the first half, according to figures from Digitimes Research's latest server tracker.

Global server shipments are expected to increase 12.8% sequentially in the third quarter of 2019 with a flat on-year performance, but shipments for all of the year are likely to drop on year due to a sharp shipment decline in the first half, according to figures from Digitimes Research's latest server tracker.Worldwide server shipments rose 9% sequentially in the second quarter of 2019, but slipped 12.5% on year, Digitimes Research's number show.From 2017 to the first half of 2018, most server brands saw rising inventory levels as end demand was weaker than expected, resulting in the vendors spending the second half of 2018 and the first half of 2019 digesting their excess inventory.After leapfrogging Amazon in the first quarter of 2019, Facebook became the second-largest client of Taiwan's server sector in the second quarter, surpassing Hewlett Packard Enterprise (HPE), with Quanta Computer and Wiwynn both enjoying rising orders from Facebook, particularly Quanta.Quanta, Inventec and Wiwynn all saw sequential shipment growths in the second quarter of 2019 with Quanta having the biggest increase due to Google's order ramp-up, but Quanta's orders from Google still experienced an on-year drop in the quarter.Inventec's orders from major clients all picked up sequentially in the second quarter of 2019, but its orders from Dell and HPE both shrank on year. Wiwynn's orders from the two major clients also increased sequentially, but compared to those of the same quarter a year ago, one went up, but the other went down.China-based server brand Inspur began in-house server motherboard production at plants in Suzhou, China in June 2019 and its outsourcing to Taiwan makers are expected to drop and affect Taiwan's share of the worldwide server shipments.

Taiwan-based BE Accelerator, with business focus on digital medical care, application of AI to medical care and development of medical devices, aims to become a gateway to Asian markets for local and foreign startups engaged in medical technology, according to company executive director Arthur Chen.BE Accelerator's digital medical care business covers remote medical care, precision medicine, next-generation genome sequencing and smart hospitals, medical application of AI, such as interpretation of medical images, assisted diagnosis, health management and R&D of pharmaceuticals. It is also developing surgical equipment and instruments, advanced biological materials, monitoring and therapeutic systems, and drug delivery platforms.Taiwan is suitable for developing digital medical care as because of its global leadership in developing and producing ICT products and its medical technology, Chen explained.BE Accelerator's strategic partners are Stanford University's Byers Center for Biodesign, a developer of innovative process for designing medical devices; US-based zero-equity accelerator MassChallenge; Taipei Medical University; Show Chwan Health Care System, which has has set up IRCAD Taiwan, an Asian training institute for minimal invasive surgery, via partnership with France-based IRCAD; Taiwan Startup Stadium (TSS) consulting firm; and BioIPSeeds, a platform for biomedical R&D results collected in Taiwan and abroad.BE Accelerator has cooperated with many hospitals in Taiwan including Show Chwan Hospitals, Mackay Memorial Hospital and Changhua Christian Hospital as well as Tohoku University Hospital in Japan, Chen noted.TermSheet Bootcamp, a program jointly operated by BE Accelerator and TSS, let accelerated start-ups know what terms are crucial for angel or venture capital investment, such as whether operating right will be diluted in the future and how to sell innovative technologies and share profits, Chen indicated.BE Accelerator executive director Arthur ChenPhoto: Company

Apple is said to be looking to boost its in-house IC design capability in a bid to stay competitive and its moves are expected to benefit TSMC. At the same time, the company is also set to release a new 16-inch MacBook Pro with an ultra-thin bezel design. Meanwhile, despite being banned by the US government, Huawei remains aggressive in development of 5G applications.Apple revving up in-house IC design capability; TSMC to benefit most: Apple has clinched a deal to acquire Intel's smartphone baseband (modem) chip business unit, and the US vendor is also expected to roll out MacBook models featuring its own ARM-based processors in the near future. And TSMC is expected to benefit the most, among Apple's supply chain partners, from the tech giant's efforts in strengthening its in-house chip design capability, according to industry sources.Apple set to release new MacBook Pro with narrow bezel in September: Apple is set to release in September 2019 new MacBook Pro featuring ultra-narrow bezel to accommodate a 16-inch screen, expanded from the original 15-inch one. And Taiwan's ODM Quanta Computer is expected to be the sole contract producer for the new model, according to supply chain sources.Huawei gearing up 5G deployments via 3-pronged approach: Despite suffering hiccups in obtaining advanced 5G base stations chips from US suppliers, Huawei is still aggressively taking a three-pronged approach in carrying out its 5G deployments, namely 5G base stations, 5G smartphones and 5G CPE (customer premise equipment) series devices, according to industry sources.

Taiwan's makers shipped 7.16 million LCD TVs in the second quarter of 2019 increasing 14.4% from the previous quarter, as US-based clients required advanced shipments to avoid their products likely being subject to higher tariffs to be imposed by the US government, according to Digitimes Research.Due to a higher base built up by the sequential gain in the second quarter, Taiwan's TV shipments are likely to grow at a single-digit rate in the third quarter before seeing a seasonal uptick in the fourth quarter, Digitimes Research says.The short-term shipments also helped ramp up the ratio of US-bound shipments to 38.6% of combined TV shipments by Taiwan's makers in the second quarter compared to 25.4% a year earlier. The ratio was up due also to Vizio's release of more orders to Taiwan's makers.During the same period, those TVs shipped to the Asian and European markets accounted for 30.5% and 23.6%, respectively, of total TV shipments.With respect to TV sizes, the shipment share of over 60-inch models dropped to 11.7% in the second quarter as small-size models accounted for a majority of the short-term shipments to the US where importers can import large-size TVs from Mexico free of tariff charges.Models in sizes ranging from 50- to 59-inch accounted for 32.1%. Overall, over 50-inch models are expected to account for over 50% of total shipments in the fourth quarter, Digitimes Research estimates.The combined ratio of the top-two makers, TPV Technology and Foxconn Electronics, has dropped to 60% in the second quarter. Amtran Technology was third with shipments rebounding to over one million units in the quarter. But fourth-ranked Innolux could outrace Amtran in unit shipments in the fourth quarter as the company has been gearing up its TV assembling business.

Supermicro, a first-tier server vendor worldwide, has been aggressively developing gaming-related products with its experience from the server business. Supermicro is able to offer customers products with server quality.Digitimes recently talked with Supermicro's senior application system product manager Steve Lee and senior product manager Tony Fan about the company's gaming business.Q: How long has Supermicro been in the gaming motherboard business?Lee: We have been developing gaming motherboards for five years. In fact, Supermicro has been in the motherboard business for around 20 years already, but has mostly focused on consumer, server and embedded solutions.Recently, with gaming applications growing popular, Supermicro also crossed into the development of the related product lines. However, in addition to customers from the PC DIY market, we have seen growing demand from the enterprise sector as customers from the field are building desktops using Intel's top-end CPUs and need reliable motherboards to unleash the CPUs' full potential.All our gaming motherboards are equipped with server-grade components and designs to optimize the stability of the systems, making our gaming motherboards the top pick for our customers.We currently have several business models for selling our gaming motherboards including cooperating with system integrators, specific regional channel retailers and e-commerce platforms.In Taiwan, we work with a local channel retailer CoolPC to sell gaming and server motherboards, while in the US our motherboards can be found on both Amazon and Newegg. However, partnering with system integrators is still the main business direction for Supermicro's gaming business.Q: What direction is Supermicro planning to push its development to?Lee: We have seen many brand vendors in the gaming market shifting their development to features that make products more appealing to customers, such as adding support of RGB lights to hardware and peripherals.This is a growing trend in the gaming market, but Supermicro at the moment will still focus on maintaining products' high quality, performance and reliability, as these are what Supermicro's customers are mainly looking for.Q: Does Supermicro manufacture its gaming desktop in house?Lee: Supermicro is collaborating with peripheral makers including Thermaltake and Lian Li for desktop and chassis product lines.Supermicro has co-developed two liquid-cooling gaming desktops with Thermaltake that are currently available in the US channels. The company's chassis co-designed with Lian Li was showcased at Computex 2019.Q: Does Supermicro's gaming products have any advantages over competitors?Fang: Supermicro is designing its gaming motherboards with a concept 100% identical to designing server motherboards. Our gaming motherboards are all equipped with server-grade components that are provided by a sole supplier in order to keep quality stable.To make every gaming motherboard with the same quality is the goal that Supermicro has been looking to achieve and by choosing only one supplier, the company is looking to avoid the concern on the tolerance discrepancy of the components.For example, Supermicro's gaming motherboards use high-quality PCBs with extra layers, which are the same as those used in server motherboards. Although the such motherboards are pricier than regular ones with fewer layers, they provide better and more reliable electrons transmission via circuit.In addition, several of our gaming motherboards are also equipped with server-grade remote management chip from ASpeed Technology and Supermicro has a team of 300 software engineers to help customers manage their systems via the Intelligent Platform Management Interface (IPMI) feature. Customers can also obtain assistance via their smartphones.Thanks to Supermicro's expertise in server motherboard design, some of Supermicro's gaming motherboards can support up to a total of four graphics cards with the addition of a PCIe switches chip to expand the motherboard's Lane support.Supermicro senior application system product manager Steve Lee (left) and senior product manager Tony Fan (right)Photo: Joseph Tsai, Digitimes, July 2019

AUO expects its sales to remain flat sequentially in the third quarter despite the period being the traditional strong season as the US and China's trade tensions continue creating uncertainties to the market, but AUO has already started pushing for business diversification in a bid to keep up its revenue and profit performances. On the other hand, Taiwan's PCB makers have seen Huawei increasing its order pull-in for smartphones.AUO gives flat outlook for 3Q19: AU Optronics (AUO) expects its sales for the third quarter of 2019 to remain at the same levels as a quarter earlier because there is uncertainty about demand in the traditional high season due to the macroeconomic factors, according to company chairman Paul Peng.AUO looking to diversified operations: Despite incurring a loss of NT$2.68 billion (US$86.23 million) in the second quarter of 2019, AU Optronics (AUO) will continue to implement its value-creating policy by further diversifying its operations, according to company chairman Paul Peng.Taiwan PCB firms see pull in of Huawei smartphone orders: Taiwan-based PCB manufacturers have seen orders for Huawei's smartphones pull in rapidly, particularly those for high-end models, according to industry sources.

Preparations for production of this year's new iPhone devices have started, but component suppliers are bracing for weaker shipments to Apple compared to last year. But one of Apple's major competitors, Huawei, has turned upbeat about its shipments for 2019 now that the US and China have agreed to restart trade talks. But Huawei reportedly has seen changes in its ecosystem, with Flex stopping making phones for the Chinese vendor.Apple supply chain cautious about orders for new iPhones: Judging from the order visibility from Apple for the third quarter of 2019, the build-up of components for the production of new iPhone devices to be released later in the year could hardly exceed the 80 million units seen in the same period a year ago, according sources from Taiwan's handset supply chain.IC backend firms expanding capacities on strong demand from Huawei: Taiwan IC backend service firms are moving to carry out capacity expansions to meet increased shipment demand from Huawei and its chipmaking arm HiSilicon, which, coupled with growing demand for packaging crypto mining ASICs and niche DRAMs, is expected to significantly drive up their revenues for the second half of 2019, according to industry sources.Flex halts handset production for Huawei, says Chinese media: EMS provider Flex reportedly has stopped assembling Huawei's smartphones in China, with the client shifting contract production orders to BYD Electronics International and Foxconn Electronics, according to Chinese media reports.

Taiwan Mobile is aggressively expanding its domestic telecom ecosystem integrating equipment suppliers and terminal application service providers while seeking to export solutions created by the ecosystem through overseas partners, according to the firm's chief operating officer CH Wu.Wu said the Taiwan-based telecom carrier has so far built ecosystem partnerships with 70-80 firms engaged in diverse vertical application segments including industries, transportation and healthcare services, up from 40-50 partners when the company started to build its ecosystem in early 2018.Wu said Taiwan Mobile has also been keen to enter cooperation with international telecom operators, having joined the Bridge Alliance, made up 36 telecom operators in Asia, Australia, Africa and the Middle East.Besides offering international roaming services, Taiwan Mobile and other member firms of the alliance are actively moving to set up an IoT platform to cater to 5G, IoT, and IoV (Internet of Vehicles) applications.Wu stressed that the Bridge Alliance is also serving as a platform for promoting exports of related solutions from member firms. For instance, a city has to cooperate with local telecom firms in installing smart street lights, and the Bridge Alliance can help introduce related smart solutions.