Combined revenues of Taiwan's top-3 foundries - Taiwan Semiconductor Manufacturing Company (TSMC), United Microelectronics (UMC) and Vanguard International Semiconductor (VIS) - are estimated at US$9.61 billion in the third quarter of 2017, up 13.3% sequentially but down 0.1% on year, according to Digitimes Research.A pick-up in demand from China's smartphone market will lead to the sequential growth, accordig to Digitimes Research. Meanwhile, demand for 10nm chips for use in high-end mobile devices has been robust during the third quarter.Revenues generated from the communications sector are expected to increase 17.8% sequentially to US$5.55 billion in the third quarter, Digitimes Research indicated. Revenues from the car electronics and industrial segments also played another growth driver in the third quarter rising 15.1% sequentially to US$2.22 billion.TSMC's 10nm FinFET technology will start generating revenues substantially in the third quarter of 2017, Digitimes Research noted. Revenues generated from the process will top US$900 million in the third quarter from only US$70 million in the second quarter.UMC's newer 14nm process began bringing in new revenues in the second quarter, but demand for the process has been disappointing with monthly capacity reaching only 2,000 12-inch wafers, Digitimes Research said. UMC has no plans to expand production capacity for the process.In addition, demand for 8-inch wafer fabs has been growing robustly since 2017 thanks to strong demand for fingerprint sensors and power management chips, according to Digitimes Research. Taiwan's major foundries, which saw their 8-inch fabs run at full capacity, plan to expand production capacity at their 8-inch fabs.

Taiwan's first indigenously produced Earth observation satellite Formosat-5 was successfully launched August 25 from California, the US, into a low Earth orbit, about 720 kilometers high, and will undergo one month of testing before starting a five-year observation mission to collect data and images for natural disaster evaluation, national security and environmental monitoring. This marks a new milestone in Taiwan's space technology development, announcing to the world its entry into the space satellite industry.Formosat-5 is Taiwan's first ultra-high resolution remote observation satellite designed, manufactured, assembled and tested domestically, shedding dawning gleams to the nation's space industry. In addition, the satellite was carried into the Earth orbit by Space X's Falcon 9 rocket, indicating the advent of the "Space 2.0" era, with the global aerospace field, once dominated by NASA of the US, the EU and Russia, is gradually opening up for commercial operations by other countries in the world.Over the past four decades, Taiwan has had many well-developed industries, but some of them have become stagnant or started falling following years of prosperity. Some newly emerging industries are struggling to survive intense price-cutting competition from counterparts in China. Some other industries with high entry thresholds are enjoying booming orders from customers, but they are plagued by shortages in the supply of water, electricity and talent.Sound attitude toward innovative industries requiredAccordingly, it is not impossible for Taiwan to develop space satellite as a new industry and pursue commercial innovations in the sector, but what really matter are: whether satellite-related companies will still exist 10-20 years from now and whether the value of the industry will increase or decrease progressively? The Taiwan government is actively encouraging industrial upgrades and innovation startups with a series of fostering programs, but the key point rests with if the government and private sectors have developed a sound attitude toward the development of innovative industries. Taiwan could continue to introduce innovative product ideas from the Silicon Valley for trial or mass production by taking advantage of its manufacturing capability and lower production cost, but that would only be a repeat of what Taiwan has been doing, which is neither a "disruptive" innovation nor a new commercial mode that the country should be looking for. Taiwan would only be continue earning from the "hard labor" without creating new value or future value. If Taiwan makers cannot move to create their own values and increase profit margins, then the government efforts would eventually amount to nothing.The government has spent NT$5.7 billion (US$188.95 million) on the design, production, delivery, launch and insurance of the 450kg Formosat-5 satellite. And Cheng Liang-gee, Taiwan's minister of science and technology, said that the government will expand its budget to support more aerospace-related projects, such as nurturing the space industry and developing new satellites and technologies. It seems satellite design talent at government-funded research organizations may not have to worry about their jobs. But the problem is that Chen will not always stay on his post, and the government is also unlikely to keep rendering budgets to support the R&D on space satellites. It means such satellite design talent should seek to set up startups or join private enterprises to explore new business opportunities associated with space satellites.Based on related studies, satellite technologies will be widely applied in many areas, including telecommunications, homeland security, autonomous driving and other commercial activities, in addition to the military field, with these applications likely to flourish in the next 20-30 years. Taiwan now boasts very good academic performance in artificial intelligence (AI), but it counts more for these academic achievements to be industrialized and commercialized for maximum economic benefits. Likewise, both the Ministry of Science and Technology and the Ministry of Economic Affairs, should move to work out policy analyses on the space and satellite industries, introduce strategies to nurture new development teams and startups, and help private enterprises find proper positioning in the sectors, so as to make space and satellite become newly emerging industries with great development potentials and niche markets over the next 20-30 years, eventually winning Taiwan a solid presence in global space and satellite sectors.

LiDAR sensors, whose use had been previously limited to surveillance in tunnels and at factories due to prohibitive pricing, will see growing adoption for self-driving, drone and home-use robotic applications, as vendors have been developing solid-state LiDAR sensors of smaller sizes at lower production cost.LiDAR sensors may be inferior to millimeter-wave radars under adverse weather conditions, but are much superior in ranging and recognizing objects under normal weather conditions.Due to reliance on mechanical swivels to change laser beam emitting angles for collecting 3D information on the shape of objects, LiDAR sensors were heavy and entailed high production cost in the past. Instead, solid-state LiDAR sensors can have varying laser beam emitting angles without using mechanical swivels.While US-based Velodyne LiDAR has launched hybrid sold-state LiDAR sensor models with matched mechanical swivels, US-based Quanergy Systems has unveiled a complete solid-state LiDAR sensor, S3, and plans to begin production for sale at US$250 in 2017. In addition to Velodyne and Quanergy, other vendors have been developing inexpensive solid-state LiDAR sensor models, including Israel-based Innoviz Technologies, US-based TriLumina, Canada-based LeddarTech and Phantom Intelligence.LiDAR technology can be used to enable robots to detect and range surrounding objects to avoid collision. US-based Neato Robotics and China-based Ecovacs Robotics have adopted LiDAR sensors for home-use cleaning robots.

Major players in the augmented reality (AR) industry have slowed down the development of consumer-end products, and instead have shifted their strategies to focus on developing AR platform products, according to Digitimes Research.The lackluster performance of AR/VR devices in the consumer market and end market is the main reason for this change, Digitimes Research said. Besides, the existing hand-held devices have been able to deliver AR applications and experiences effectively, making it less urgent for major players to develop other AR end-market devices.Among these major players, Google has been pioneering the development of AR platform for hand-held devices and has rolled out its Tango platform. On the other hand, Microsoft has been focusing on developing its integrated AR/VR platform, Windows Holographic, which can be utilized by AR/VR end-device users without changing platform.Facebook has continued to deepen its deployment in community platform, aiming to a build up a premium AR ecosystem with its "Camera Effects" AR platform. Meanwhile, Apple has come out with its ARKit platform, which allows all of iOS users to try on AR experiences without a hardware upgrade.

Smartphone shipments in the China market stayed flat on quarter but fell 11.8% on year to 94.1 million units in the second quarter of 2017, accounting for 28.9% of total global smartphone shipments, according to Digitimes Research.Based on the information provided by supply chain makers, Digitimes Research believes that vendors including Huawei, Oppo and Vivo have increased their component orders for the third quarter, which is likely to result in an over 20% on-quarter growth in smartphone shipments in China in the third quarter.China's smartphone shipments will again drop slightly on a yearly basis in the fourth quarter of 2017 as vendors are expected to adjust their shipments appropriately as compared to an aggressive shipment strategy adopted a year earlier.There were two main reasons for the lackluster shipment performance in China in the second quarter, according to Digitimes Research's latest China smartphone report. Firstly, due to a lack of a clearly subsidy policy at operators, the number of new 4G service subscribers at the top-three telecom operators hit a low of 56 million in the quarter resulting a decline in demand as well as sales of the entry-level and mid-range 4G smartphones. Besides, some vendors adjusted downward their shipments for the second quarter to help digest the high inventory levels at channels.The top-five smartphone vendors in the China market in the second quarter were Huawei, Xiaomi Technology, Vivo, Oppo and Apple. Among them, Xiaomi saw its shipments more than double in the quarter as it has managed to clear out the inventories of old models, while demands for its Mi 4X and Note 4X models have been brisk.Meanwhile, Oppo and Vivo are ready to further ramp up their shipments in the third quarter as they also have effectively cleared out their inventories at channels in the first half of the year.

With inventory preparation for back-to-school demand reaching an end in June, first-tier notebook vendors' shipments slowed down in July with the top-5 brands' combined shipments dropping 31% on month and top-3 ODMs' combined volumes down 22%.But top vendor Hewlett-Packard (HP), which enjoyed strong sales in both the consumer and enterprise sectors in the first half of 2017, still produced impressive results on a yearly basis. It has been pushing its notebook shipments aggressively in the second half of the year, and its shipments in July rose 33% on year.Dell surpassed Lenovo for the second time in 2017 in July and went up to second place thanks to the expanding replacement trend in the enterprise sector, according to Digitimes Research's latest notebook shipment monthly update.Lenovo's July shipments slid 15% on year and are likely to see weak performances for the rest of the second half of 2017. Asustek Computer's shipments also slipped dramatically in the month because of its business reorganization.The top-2 ODMs' combined share of Taiwan's overall shipments went up in July. Compal Electronics and Quanta Computer both achieved around 20% on-year shipment growths in July because of orders from US-based clients, while Inventec and Pegatron Technology saw on-year shipment declines.First-tier notebook vendors' shipments slowed down in July.Photo: Digitimes file photo

The decision by Foxconn Electronics to invest US$10 billion in the US, which will include the establishment of a 10.5G TFT-LCD panel plant in Wisconsin in the initial stage, will help the company move closer to its clients and accelerate its corporate transformation, according to Digitimes Research.Including the planned LCD plant in Wisconsin, a total of five 10.5G flat panel fabs are expected to commence for commercial operations during the period from 2018-2021 signaling that there will be a risk of overproduction of large-sized TV panels. But Foxconn's decision still makes sense given the US is one of the world's two major high-end TV markets. The establishment of a streamlined production line covering from the panel production to the system assembly will help improve manufacturing efficiency and make prompt responses to market demand, while also reducing transportation costs, said Digitimes Research. The new US investment plans, if realized, will also help Foxconn transform itself from its current OEM business model into a conglomerate with powerful system integration and brand management ability.While Foxconn is likely to win a US$3 billion tax break from the State of Wisconsin, the capital efficiency and optimization of the 10.5G plant in the US still shows a significant difference as compared to a 10.5G line currently being built by China-based BOE Technology, which is required to put up a mere 5% of capital needed for the construction and operation of the plant.Leveraging its advantages of being close to the US market and able to deliver goods promptly, Foxconn is expected to further expand its investments in the US to include other products such as automotive panels, robots and other innovative products.

While the mobile network infrastructure in most countries of the Association of Southeast Asian Nations (ASEAN) has reached above the global average, the 4G LTE mobile user market in the region, with the exception of Singapore, has been growing relatively slowly. Meanwhile, mobile Internet has served as a growth driver pushing the development of Internet networks in the region, and the use of community applications has played a key role to push up the demand for mobile applications.The number of network community users in Indonesia is growing rapidly, which has driven indirectly the development of mobile application service and e-commerce business in the country. With its enormous domestic consumption potential, Indonesia has become a major focus within the ASEAN market.As of the end of 2016, Indonesia had a total of 133 million Internet users, representing a penetration rate of 51% and making it the largest Internet user market among the 10-member ASEAN countries.Due to the preference for community application services by Internet users in Indonesia, the Special Capital Region of Jakarta has optimized this foundation to develop smart city applications. After extensive success, the central government of Indonesia has decided to adopt this operating model and plan to promote the smart city applications to the nation's top-100 cities. Local Internet service provider Telkomsel and application service provider Go-Jek both have also utilized the feature of high dissemination of community networks to rapidly promote their mobile services.E-commerce will also become a promising segment along with the growing popularity of Internet networks in Indonesia, Digitimes Research believes. While the penetration rate of e-commerce in Indonesia was below 10% in 2016, the average consumption per e-commerce user reached US$228, the second highest level in the e-commerce market in the ASEAN region trailing after Singapore.With on-line sales accounting for only 2.2% of total retail sales in Indonesia in 2016, the country's e-commerce market is full for growth potential. However, the segment still faces a number of challenges including government regulations and administration efficiency, payment tools, and immature logistics infrastructure.

US president Donald Trump revealed at a meeting with a group of small-business leaders August 1 that Foxconn chairman Terry Gou told him privately that his company could invest as much as US$30 billion in the US, three times the figure announced by Gou at a press conference held on July 27 at the White House. Trump's unexpected disclosure has sparked concerns over Gou's willingness to carry out the sharply-floated investment bid.At the press conference, Gou announced that Foxconn will spend US$10 billion over the next four years building a LCD panel manufacturing plant in Wisconsin.Foxconn issued a statement on August 2 that the Wisconsin plant "will be the first of a series of facilities we will be building in several states as part of the robust electronics ecosystem we will be creating in the US." It did not address Trump's statement about the total investment amount or Trump's claims that Gou told it to him in confidence."We have not yet announced our investment plans for other sites," Foxconn said in the statement. "We will provide an update as soon as we have finalized those plans."Some observers said Trump intentionally released the encouraging news about the US$30 billion investment simply to encourage the small-business leaders. Some other opined that he was trying to test the response of Foxconn to the claimed US$30 billion investment or leverage the matter to directly triple his administration's achievement in soliciting overseas foreign investments in the manufacturing industries in the US.Observers said that it's a sure decision for Gou to set the US as another major market beyond China's and it's foreseeable for Foxconn to make long-term investments in US. Whether Foxconn will duplicate his China success in the US remains to be seen. Neither is it clear how Gou can materialize his "8K+5G ecosystem" for the US. If the company can build a complete supply chain for the display panel industry in the US, it can benefit from lower tariffs and transportation costs, but how to maintain viable operations of the supply chains will be another issue to address, observers said.

It's 2002, and the widgets come rolling down the factory's conveyor. Then it happens: a misfortune nobody anticipated. An equipment breakdown halts production dead in its tracks. Technicians swarm over the machinery to make the fix as swiftly as possible. Every minute of the production shutdown means lost revenue.Fast-forward to today's smart factory, where edge computing and solutions from the Industrial Internet of Things (IIoT) make predictive maintenance possible. This technology can closely monitor the conditions under which the equipment is apt to fail, and it alerts staff when a malfunction is impending. It also pinpoints the best time to perform proactive maintenance, when a lull in production minimizes any losses in time and money.All of this is part of the smart factory revolution.Edge computing transforms manufacturingSensors are everywhere in many of today's factories and fabrication plants, taking in reams of data. They measure any number of variables that affect the factory's performance or portend machinery breakdown. The processing of this data often occurs at the edge of the network, which affords a host of advantages over cloud-based systems. Information from the sensors is ingested by the software-driven smart gateways in real time for processing as near the device as possible. Edge computing cuts the latency that results when data goes to a remote cloud server and returns. The factory enjoys stronger performance, lower data costs, fewer network bottlenecks and greater security.This technology is erasing much of the uncertainty in manufacturing and other processes. Imagine a piece of equipment that tends to fail when the temperature climbs too high. As IIoT sensors monitor that equipment and keep track of the operational temperature, edge computing processes and interprets the data via complex algorithms. When conditions reach statistically dangerous levels, alerts go out to staffers so they can deal with the impending failure proactively. This is an enormous benefit, because forecasting an equipment failure is always better than scrambling after it occurs.Predictive maintenance, therefore, is one of the most transformative aspects of the smart factory.Integration challengesBut it's not as easy as it sounds. A factory owner does not walk into a local IIoT store to buy some one-size-fits-all computer products ready to plug in. That's because factories differ profoundly from one another. Part of the process is tailoring the predictive maintenance process to each facility's specific operations.Among the daunting challenges is the fact that so much legacy equipment exists in factories today, and the disparate pieces usually don't talk to one another. There's no universal protocol. In addition, the IIoT solutions have to work seamlessly with both operational technology (OT) and informational technology (IT) – two modes of technology that are often worlds apart.Stopping failures before they startMechanical failure is a costly issue that has bedeviled factories since the first Industrial Revolution. The related problem of product failure can be expensive, too. If conditions are inhibiting the proper manufacturing of a product, a factory ends up with a great deal of waste and lost productivity. Even worse, faulty products can end up in the hands of consumers. Apart from IIoT technology and the accompanying edge computing, all this might easily go undetected.In a smart factory, IIoT sensors monitor all kinds of conditions – for example, whether the ambient temperature is ideal for spray paint adhering to metal. Data processing at the edge determines when conditions become detrimental to normal manufacturing, and alerts go out to staffers who can respond accordingly.This technology also factors in history. Suppose there are certain times of day when temperatures tend to put product manufacturing out of compliance. Predictive maintenance can look at the history of manufacturing failures and educate employees on how to deal with an issue before it becomes a problem.Trimming unneeded maintenancePredictive maintenance also informs staff when costly, ongoing maintenance is unnecessary. It's a common scenario: Technicians shut down and service equipment at regular intervals, whether it actually requires that servicing or not. Sometimes they replace components that don't yet need replacing, or lubricate an idled machine that requires no such action. Predictive maintenance takes that guesswork out of the equation: The machine isn't lubricated until it needs to be, and the components aren't swapped out if they're still good. Production rolls on without interruption.When equipment does need servicing, these advanced edge analytics can reveal the best times to perform such maintenance, the times that least affect the production schedule.More benefitsIIoT analysis has another benefit: Determining the conditions that have led historically to the best product yield. This is important in the case of products sensitive to their surrounding conditions, such as semiconductors.In addition, IIoT sensors can determine when a piece of equipment is drawing too much current or operating in other ways that diminish energy efficiency. Staff can then recalibrate the equipment and save the factory even more money.What to look forThere are a number of predictive maintenance solutions on the market today. ADLINK, Intel, IBM and PrismTech (an ADLINK company) have pooled their expertise to introduce predictive maintenance solutions. These address the challenges of connecting the unconnected and creating communication efficiency through fog architecture. Each of these companies has IIoT solutions designed to address the distinct challenges that arise on the factory floor.These predictive maintenance solutions can analyze data from the cloud or from the network's edge, whichever is necessary in a given application. And because these solutions can operate at the edge of the network, results are more instantaneous. They are secure and integrate smoothly into the factory's OT and IT environments, with low IT management overhead. The solutions are also customizable and scalable, and offer predictive analytics and secure distribution of data, making the smart factory smarter. The result is less downtime, reduced costs, enhanced product quality and greater productivity.With all the inherent positives – better yield, less downtime, better-informed decisions – these solutions truly are part of the revolution. It's a revolution that's bound to grow as people increasingly discover the benefits of turning their factories into smart factories.(Jason Ng is a business development director for ADLINK in Singapore.)