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.

Taiwan startup GranDen, devoted to integrating AR, VR and MR technologies into interactive services since its inception in 2018, is heading towards the next XR generation by offering interactive content in O2O marketing, according to company co-founder and CEO Dochin Lai.Lai said currently entertainment products, trade fair events, training simulations, museum exhibitions, and new retail O2O integrated solutions can leverage innovative interactive services by integrating virtual and physical realities to allow consumers to enjoy diverse IT application experiences in a relaxing and entertaining style.Lai said many of Taiwan's AR and VR businesses, mostly operating on a small to medium scale, have failed over the past few years, and only a few have survived after having successfully tapped into specific application segments.Osense Technology, for instance, performs well in the niche segments of indoor navigation and smart stadium; ARPlanet embraces AR marketing solutions; and Shadoworks Studio excels in digital education programs, according to Lai.Lai revealed that GranDen now mainly focuses on Internet celebrity economy, entertainment, and new retail O2O. He said that after 5G and 8K technologies and applications become mature, consumers will be able to enjoy many more diverse tech experiences, and that in the future digital ecosystem, offline retail will have to be upgraded and transformed from merely selling merchandises.The company has obtained US$500,000 during its Pre A round of fundraising to support the expansion of its Aligala mobile game platform.GranDen co-founder and CEO Dochin LaiPhoto: Mark Tsai, Digitimes, July 2019

Quanta is looking for components that are not made in China to avoid issues concerning country of origin for its server shipments to the US in the wake of the US-China trade war. But most of Taiwan's components makers have shown little interest in reestablishing their local production capacity. Meanwhile, DRAM and NAND flash memory chips' spot market prices have been rising since the start of July, while their contract prices are expected to rebound at the end of the month.Quanta seeking more non-China-made component sources: Quanta Computer has started seeking more non-China-made server components to avoid the possibility of being accused of using transshipments to avoid US tariffs, according to industry sources.Most Taiwan components makers unmotivated about reestablishing local capacity: Taiwan-based components makers are mostly uninterested in reestablishing local production capacity despite server ODMs' wish they did so, as their business scales are not large enough to afford the costs of splitting manufacturing resources in different places, according to sources from the upstream supply chain.Memory spot prices rebounding, contract quotes to rise in August: Spot market prices for DRAM and NAND flash memory chips have been on the rise since the beginning of July, and their contract prices may bottom out by the end of the month, according to industry sources.

The trade tensions between Japan and Korea are expected to drive up memory prices, prompting the chip and module vendors to accelerate inventory adjustments, after which they will increase orders for their supply chain partners, including backend service providers. But NAND flash makers are not being carried away by the price rally, focusing efforts on advancing their technologies to capture opportunities from the datacenter and high-end enterprise market segments. in Taiwan, specialty DRAM and flash memory chipmaker Winbond Electronics is building a new fab that is scheduled to start volume production by 2021.Memory backend firms see clear order visibility throughout 4Q19: Taiwan-based memory backend specialists have seen clear order visibility through the fourth quarter of 2019, as they have directly or indirectly tapped into the supply chains of major non-Korea memory suppliers including Toshiba Memory (TMC) and Micron unaffected by Japan's tighter control on exports of key semiconductor chemical materials to Korea, according to industry sources.NAND flash vendors gearing up for datacenter market boom: NAND flash vendors are gearing up to roll out their high-end solutions for datacenter and high-end enterprise products while stepping up their pace of technology transitions. Competition among them is set to be fierce in 2020, according to industry sources.Winbond on track to open new memory fab by 2021: Specialty DRAM and flash memory chipmaker Winbond Electronics on July 22 held a beam-raising ceremony for its new 12-inch wafer plant in Kaohsiung, southern Taiwan. The new facility is on track to have Winbond's in-house developed 20nm process technology ready for commercial production by 2021.

Taiwan-based startup BlockChain Security has launched Blockchain Witness app for preserving digital data as evidences for legal purposes, according company CEO Po Huang.While digital files are easy to be lost and falsified, Blockchain technology can preserve digital data to make them non-repudiable and tamper-proof, and matched with digital fingerprinting technology it can ensure the authenticity and validity of evidences, Huang said.Blockchain Witness can take photos, record video or voice, take screen shots and then upload them in virtual blocks for digital evidence preservation, Huang noted, adding the app is equipped with GPS to track the time and location of the uploaded digital data. For uploading and preservation, BlockChain Security adopts both private and public blockchain, Huang said.

TSMC plans to increase its capex this year to support chipmaking on 7nm and 5nm processes, demand for which will be mainly driven by 5G applications. During TSMC's migration to even more advanced nodes, EUV will be crucial to cutting costs. As 5G is expected to be a major force driving growth for many industry sectors, PCB makers are also stepping up efforts upgrading products to support 5G smartphones.TSMC steps up investment in EUV processes: Pure-play foundry Taiwan Semiconductor Manufacturing Company (TSMC) is stepping up the construction of its new factory site in Tainan, southern Taiwan, while its application to set up another new site designed for processes beyond 3nm in Hsinchu, northern Taiwan has gained government approal, according to sources familiar with the matter.PCB supply chain upgrading tech specs for 5G smartphones: Taiwan PCB makers, boasting a significant presence in the supply chain of Apple, are quietly gearing up for specs upgrades on their products to support 5G smartphones, according to industry sources.

Osense Technology, founded in 2017, is a developer of artificial intelligence (AI) and augmented reality (AR) applications, mainly developing object recognition solutions for in-door space, according to company CEO Joseph Wang.A basic fact about AR is that an object must be designated in order for created content to show up in the AR environment and this makes object recognition a critical technology for in-door space AR development.Osense has developed a patented system called Vision Based Indoor Position (VBIP) that can help its AR platform recognize the whole in-door area without GPS signal. The technology also detects geomagnetic wave to position the user's location to minimize errors.Osense has used the technology to build a smart baseball stadium app that is able to offer a variety of services needed by fans visiting baseball stadiums, including transportation routes, parking information, lavatory locations, seat locations, souvenir and dining services, stadium facilities, game schedules, and updates on baseball teams, among others.Wang expects the app to help stadiums create new business flow and bring in additional values to stadium owners, fans, broadcasting crews and accessory vendors.Osense CEO Joseph Wang (center) and development crewPhoto: Company

AR can create brand-new gaming experience, but for industry applications, AR can help firms tackle their long-existing pain points, according to Roger Lu, founder and CEO of Mind & Idea Fly (Mifly), a Taiwan startup dedicated to multimedia AR/VR content development solutions.In an interview conducted by Digitimes, Lu stressed that real-time transmission will play a key role in determining the success in the AR domain in the 5G era, and that solid hardware support also counts greatly for AR applications in people's daily life.Q: Why did you migrate to the industry AR segment after 10 years in the gaming segment? What is the difference between gaming and industry AR?A: I witnessed the changes of the gaming sector during my 10 years in the sector. Mobile games started to emerge after Apple released its first 3G iPhone in 2008, but not until 2013 did large capital funds start to enter the sector, leading to the birth of large-size gaming enterprises such as Tencent and NetEase in China.The leading firms tended to acquire work teams and IPs of smaller firms that develolped gaming products with great sales potential. As a result, many independent gaming studios were acquired or failed.I found that AR can allow interactions whether it is applied to games or general industries. But for gamers, AR interactions can mainly bring them new gaming experiences, such as Pokémon GO. For industries, AR can help tackle their long-existing pain points. E-commerce operators, for instance, can use AR to develop visual apps for consumers to try shoes on via their smartphones.Q: How do you see B2C and B2B AR applications? What business model is adopted by your own platform?A: For AR glasses, B2B is the dominant business model, with such glasses having four main application scenarios including repair workshops, production plants, on-site inspection and security operation. I think future B2B AR applications will move closer toward large-size businesses and government units.As to the B2C business model, it can make an AR platform grow quickly, but the ratio of subscription payment by consumers will not necessarily rise with the platform usage growth.Our MakAR editing tool, designed to help enterprises create AR content to serve consumers, adopts the B2B2C model, meaning that businesses pay the cost for the services to consumers.Q: How will 5G affect the development of VR and AR application to industries?A: 5G will certainly have immediate influence on VR, as high-quality games will no longer be downloaded and can be directly played in the cloud, and high transmission performance of 5G can concretely match quality VR content.The influence of 5G on AR is not so clear for the moment. But when AR identification technology SLAM (simultaneous localization and mapping) is applied to process bigger data in shorter time before generating application content, 5G real-time transmission will be critical to supporting the application.Q: Besides the support of 5G transmission capability, what other crucial aspects will spur the development of the AR industry?A: In order for AR applications to be materialized in our daily lives, the popularity of hardware AR glasses also counts greatly. Though AR applications are operated via handsets, the most intuitive interface will remain AR glasses, which can also better integrate the virtual and physical realities.Mifly founder and CEO Roger Lu (center)Photo: Viki Liu, Digitimes, July 2019