Worldwide top-5 notebook brands saw their combined shipments (not including detachable models) drop 24% on month in July as they had already completed inventory preparations for back-to-school demand in May and June. Compared to the same month a year ago, the July volume rose 11%, the highest on-year growth in 17 months.Hewlett-Packard (HP) saw its July shipments slip nearly 30% on month, but they still represent a 5% on-year rise. Lenovo experienced an over 30% on-month decline in the month, the worst of the top-5, due to trade tensions between the US and China and the depreciation of China's currency, which has put pressure on the vendor's components purchases, according to Digitimes Reseach's latest monthly notebook data updates.Dell witnessed a shipment drop of 16% on month in July primarily due to a deceleration in its Chromebook procurement orders.The top-3 ODMs' combined shipments decreased nearly 20% on month in July. Compal Electronics remained the largest maker in the month and had an on-year shipment growth of more than 10% thanks to Dell's increased orders.

LuxNet chairman, Hsing Kung, has founded three companies. Among them, SDL was established in 1983, specializing in manufacturing optical communication devices. It was sold for US$41.1 billion 16 years later, awarding early investors a 10,000 times return on their investment. Then, Kung soon started Pine Photonics in 2000, which was acquired four years later. During the same time, Kung also founded LuxNet. Both his own companies and those that Kung had stake in underwent the burst of the Internet and optical communication industry bubble in 2000 and sustained great impact. Kung has tasted both the sweetness of success and the bitterness of failure.Now as a partner of Acorn Campus Ventures, Kung enjoys sharing his experiences on entrepreneurship. He thinks with a good foundation and system, Taiwan should encourage investors to make early-stage investments in startups to spur a burgeoning startup scene.Focus on core business and build up corporate value before burning all the cashThe dotcom boom in late 1990s attracted many people to invest in Internet and optical communication businesses. The bubble finally burst in 2000, causing many companies to go out of business. The venture capital community was busy picking up the pieces and stopped making investments. A firm supplying microelectromechanical systems (MEMS) that Kung funded in 1999 was among those that went belly up. The team that started the MEMS firm actually had quite extensive experiences. The firm was even named by a magazine as the private company with the most potential. Kung also held very optimistic outlook for the firm. However, after the startup team received investment from a large venture capital fund, they asked the team to hire an outside CEO. Both the fund and the CEO were eager to prepare the firm for IPO. Unfortunately, with the dotcom bubble bursting, the firm didn't get to go public and couldn't find a buyer, so closure was inevitable in the end.LuxNet, which Kung established on his own, faced a similar situation at that time. After LuxNet finished the final round of funding in 2001, it encountered the dotcom bubble burst. The startup team decided to move back to Taiwan in 2003 to start all over again. Combining Silicon Valley's R&D strength and Taiwan's manufacturing advantage, not only did LuxNet manage to pull through but it also generated impressive results. Kung said in retrospect that the MEMS firm should have tried to cut down expenses and focus on making core products before it burned all the cash. When a startup gets caught in a difficult situation and the CEO and venture capitalist have different opinions, only the startup team that won't give up can save the day.Having experienced the bubble burst himself, Kung remarked in earnest that a business must focus on what it does best, rather than follow what others are doing. In the startup stage, it must try its best to build up its value - make the product or find the customer before it uses up all the venture capitalist'smoney or else it won't be able to carry on.Competence and a little bit of luck will add up to startup success. After Pine Photonics was acquired, Kung chose to retire and join Acorn Campus Ventures to begin angel investing. Some Chinese engineers on the original Pine Photonics team wanted to start their own business and approached Kung. Kung and Acorn Campus Ventures then helped them found InnoLight, specializing in high-speed optical transceivers, in 2008. As there were already firms producing high-speed optical transceivers in the US but not in China, which mostly imported the products from the US, they decided to set up the company in Suzhou, China.InnoLight got off to a good start. China not only has tremendous market demand but also plenty of engineering talent as well as high-quality and hard-working labor. When Google raised demand for 40Gb/s optical communication devices for its datacenters in 2012, InnoLight was able to beat a dozen competitors and got the project. InnoLight has made itself the world's No. 3 optical communication device supplier in as short as 10 years, with annual revenue reaching US$750 million.Taiwan should leverage its advantages and encourage entrepreneurshipDrawing on past experiences, Kung thinks entrepreneurs should have a clear idea about his company's competitive edge, which may be certain differentiating technologies or intellectual property. This is also the first question that venture capitalists ask. It is not enough for a startup to succeed if it is only targeting an untapped country or market. If a startup team has extensive experiences in a certain field or specific know-how to solve certain problems, then it has a shot at success. Furthermore, the entrepreneur must be willing to share the fruit of success with his team and angel investors, who have taken risks to help bring dreams to reality. Everyone will be keen to fund an entrepreneur with a competitive edge and willingness to share.Amid global competition, Kung suggests that Taiwan-based firms should have a clear understanding of their own strength. Taiwan still has many advantages including the business climate and mature governing system. In Taiwan, you don't need government connections to be able to operate a business. The Taiwan government also places importance on intellectual property (IP) and institutes laws for IP protection, which favors the development of high-tech businesses. Moreover, its stock market is open and healthy, where share prices mostly reflect earnings and profitability in the long run, rather than market speculation. As such, the Taiwan government should leverage these advantages to attract investments and particularly make active efforts toward encouraging entrepreneurship and early-stage investments in startups. Most of Taiwan's venture capital firms are rather conservative. However, only investments during early-stage development can drive a burgeoning startup scene. In addition, academic institutions can also provide more entrepreneurship courses to help students bring startup ideas to reality.With regard to startup ideas, Kung suggests that biotechnologies and medical equipment are suitable areas for Taiwan. Taiwan has many good medical colleges, educating abundant professional talent. Acorn Campus Ventures has stakes in several startups endeavoring in healthcare technologies. Kung, however, focuses his investments in startups specializing in optical communication technology, which is more in line with his own expertise.According to Kung, widespread popularity of cloud computing and large-scale datacenters in recent years has created a great influence on the development of the optical communication industry. Telecom operators and network companies, such as Cisco, generally require optical networks to provide reliable connection. Datacenters, on the other hand, look to speed up data access and thus have higher demand for bandwidth than before. When market demand changes from reliability to speed, opportunities arise. Optical network data rate has evolved from 2.5Gb/s in 2000, 10Gb/s in 2010 to 100Gb/s at present, possibly reaching 400Gb/s in 2019. Kung thinks the optical communication industry still has plenty of opportunities and a great number of startups will keep endeavoring in innovative R&D of related technologies in this area.In addition to technological startups, with compassion for humanity, Kung has been investing in social enterprises in recent years. By fueling energy into the development of social entrepreneurship, Kung hopes to engage more efforts to help change the world.(Editor's note: This is part of a series of interviews focusing on the problems and opportunities that Taiwan-based startups face. The interviewees are venture capitalists and angel investors from Silicon Valley and Taiwan.)Hsing Kung, LuxNet chairmanPhoto: Joseph Tsai, Digitimes, May 2018

China-based solar poly-Si wafer makers, facing intensifying pressure from mono-Si wafer suppliers and sharp drops in demand from the domestic market in the wake of a China plan to impsoe stricter control on PV installations, have generally taken measures to cope with adverse conditions. However, Taiwan-based poly-Si wafer makers are much worse-eqipped to handle them.The China makers basically have four alternatives: upgrade to production of special diamond wire-sliced poly-Si wafers that enable downstream makers to produce polycrystalline black silicon solar cells; use existing polycrystal-growing furnaces to produce quasi-mono-Si ingots; invest in production of mono-Si wafers; or withdraw from the market.Since use of special poly-Si wafers to produce polycrystalline black silicon solar cells entails MCCE (metal-catalyzed chemical etching), a wet-chemical technique in surface texturing process, and MCCE will result in serious water pollution, few China-based solar cell makers have adopted such wafers. As Taiwan's environmental protection standards are generally higher than China's, Taiwan-based solar cell makers are reluctant to use MCCE, which is infeasible for Taiwan's poly-Si wafer makers.Quasi-mono-Si ingot production has not reached attractive performance-cost ratios, and no Taiwan-based poly-Si wafer makers have stepped into such production.A few China-based poly-Si wafer makers have decided to invest in production of mono-Si wafers, with GCL-Poly Energy Holdings - the largest in China - being the most active. Since Taiwan-based poly-Si wafer makers have mostly remained in the red for a long time, almost none of them have considered the alternative due to financial difficulties.Withdrawal from market seems the last choice for Taiwan's makers, but none of them have decided to to so. They hope the government can extend help.

A team of Taiwan researchers and an IC design house have jointly unveiled a deep-learning image-recognition AI chip whose production cost could be as low as only US$1.The Mipy chip, conceived by three electrical engineering professors from the National Taiwan Normal University and designed by AVSdsp, enable large-quantity applications for home, car, advertising, education, secutiry, police, industrial and toy products.The university said Mipy is the smallest in size and lowest in cost so far available on the AI market.The developers said Mipy is a cooperative IC placed next to the main controller chip, and can be easily built into any PCB that has a primary audio-video processing function.

Taiwan players have unveiled their first set of self-discipline rules for virtual currency exchange houses, with the regulations mainly focusing on how to enhance regulatory compliances set by competent authorities concerning anti-money laundering practices and personal data protection, so as to help Taiwan boost its anti-laundering performance rating by the Asia/Pacific Group on Money Laundering (APG).The rules were jointly announced by Parliamentary Union on D-Nation, General Chamber of Commerce of the ROC, Apac Blockchain Development Association (ABDA) and several virtual currency exchange houses under the association including Bitfinex, BitoEX, BitPoint, Cobinhood, KTrade and Tide Global Exchange Technology.In her capacity as president of the Parliamentary Union on D-Nation, lawmaker Karen Yu said that with the rollout of the self-discipline rules governing the operations of virtual currency exchange platforms, operators of the platforms can build a solid basis for dialogues with the Financial Supervisory Commission to develop a new financial management model in the digital era.ABDA chairman SW Liao said that the rules will be updated and revised constantly based on opinions contributed by the government and the public, adding that blockchain governance, government supervision and self-regulation by firms can complement one another.Liao stressed that through the self-regulatory practices, virtual currency exchange houses and technology specialists under his association can help the government better enhance anti-money laundering and counter terrorist finance.

Worldwide server shipments - based on the number of motherboards delivered - reached 3.84 million units in the second quarter of 2018, rising 9.6% sequentially, according to Digitimes Research's latest updates to its findings.Digitimes Research originally estimated second-quarter 2018 worldwide server shipment growth at 8.8% sequentially, but latest information from the supply chain has resulted in an upward adjustment to 9.6%.As for the third quarter of 2018, global server shipments are now expected to pick up another 15.5% because of seasonality, according to Digitimes Research's latest quarterly report about the server industry.The top-3 server players worldwide - Dell, Hewlett-Packard Enterprise (HPE) and Super Micro - all enjoyed sequential shipment growths in the second quarter, while among datacenter players, Amazon had the strongest demand and the highest sequential shipment growth.In the second quarter, Taiwan-based server makers' combined share of worldwide server shipments increased slightly to 91.2% from a quarter ago. Inventec remained the largest supplier, accounting for over 20% of Taiwan's overall server shipments, which amounted to 3.5 million units in the second quarter.Inventec's performances and share in Taiwan's shipments are expected to continue to improve in the third quarter, Digitimes Research estimates.

Compal Electronics overtook Quanta Computer as the top notebook ODM in the second quarter of 2018, thanks to increases in orders from Dell and Acer, according to Digitimes Research.The difference between the top-two ODMs' shipments was less than 700,000 units in the second quarter, but the gap will widen in the third quarter when Compal's shipments are expected to break the 10 million mark, data from Digitimes Research's newly published quarterly report about the notebook industry show.Despite a cut in orders from Dell, Compal will see a dramatic ramp-up in orders from HP in the third quarter, the research report discloses.But Quanta's shipments are expected to also rise above 10 million units in the fourth quarter thanks to orders for Apple's new inexpensive notebooks. Quanta will remain in second place, but its race with Compal will be much tigheter in the fourth quarter, with the difference to naorrow to less than 100,000 units.After registering a flat volume of 38.12 million units in the second quarter of 2018, global notebook shipments are estimated to pick up gradually and resume a single-digit annual growth in the fourth quarter, with overall second-half 2018 shipment numbers to inch up 0.9% on year, according to Digitimes Research's latest report.

Power supply product maker Mean Well is seeing steady growth in sales from the industrial power sector - a sector that it has been working in for over 30 years - as more factories switch to automated manufacturing. The company's LED drivers business has also witnessed staggering increases in orders from the consumer lighting, plant lighting and medical care equipment segments. The firm currently is staying firmly as one of the top-tier power supply makers worldwide.Digitimes recently visited Mean Well to talk to the company's executives: Yvonne Chen, marketing manager of Marketing Department; Alfie Yu, regional manager of Sales Department; and Alex Tsai, director of Marketing Department, to talk about the industrial power industry's current status and Mean Well's operations.Q: What products does Mean Well sell? What kind of business model does the company have?Chen: Mean Well was founded in 1982 and is a company primarily focusing on supplying own-brand standard LED drivers and power supply products for industrial applications. At the beginning, the company was an OEM/ODM service provider, helping to manufacture PC-use power supply devices for brand vendors, but it turned to the industrial power supply market after four years and created the Mean Well brand in 1986, as it expected better business potential in the area.Currently, Mean Well has around 500 licensed distributing partners worldwide and 70% of Mean Well's revenues are generated by these partners, while the remaining 30% are earned through the company's direct account.Yu: The LED driver is currently the largest product line of Mean Well, surpassing the industrial power supply, which was the company's main revenue contributor 10 years ago.Q: How is Mean Well's industrial power business performing? How is the business' outlook?Yu: Most of Mean Well's industrial power products are for automation applications and can be applied in places such as factories, equipment and power rooms. Unlike our LED driver business, which enjoys a rapid rise catching the tailwind of market's surging demand, Mean Well's reputation in the industrial power supply industry was slowly earned through clients' positive feedbacks.LED drivers currently contribute 40% of the company's revenues, while industrial power products account for 30% and emerging applications including gaming, Internet of Things (IoT) devices, occupy the rest of the 30%.Tsai: Demand for industrial automation and IoT devices is on the rise, and Mean Well will continue to benefit from the trend as these machines will require more sensors and communication modules to function, translating to more demand for power supply products for these components.Although Mean Well's industrial power supply business is not seeing a surging growth similar to that of the LED driver, the company will continue to experience stable revenue growth from the business since the industry is always seeing the emergence of new technologies such as automation and artificial intelligence (AI).Q: What is Mean Well's status in the LED driver market?Chen: According to a research firm's figures about 2017's LED driver market, Mean Well was the second largest LED driver supplier worldwide with a 6.6% market share, behind only Phillips.Yu: Mean Well's advantage in the LED driver business is at its medium-to-high-wattage product lines. Demand for our above-100W drivers is especially strong due to their competitive price/performance ratios. We are currently developing an above-1000W driver, which is scheduled to be released in the near future.We also cover small-wattage products, but the sector is not one of the priorities of our current operation as it has already become a battlefield of fierce price competition.Another advantage Mean Well has in the market is that we are able to provide LED drivers that meet the regulations of different markets as each market may have different rules on power products. Our products also feature in-house designed power efficiency technologies to help client save costs.Mean Well was one of the earliest players in the LED driver market, launching its first product in 2006. The years of experience in the development of the product line have given us a competitive edge.Tsai: The LED market has been growing rapidly for the past few years with demand initially coming from governments' infrastructure projects such as streetlight installment, and then gradually penetrating into the consumer lighting segment.Despite the fact that consumer LED lighting products have been enjoying strong sales, the growth will eventually slow down because of LED's slow replacement demand as a result of its long product life of at least five years. To avoid the risk, Mean Well has been actively pushing its products to non-consumer areas including automotive and biotechnology.For the biotechnology industry, Mean Well is seeing strong orders for plant lighting applications from North America and Europe and has seen our LED drivers being adopted in medical care applications.Since plant lighting systems are usually required to be in operation 24 hours a day to keep the plants under steady temperatures, related players need to have reliable LED drivers with high wattage output that can work steadily and are power efficient. Mean Well's expertise in the LED drivers is able to satisfy these players' demand in product quality and stability and we expect the business area to have a strong potential in the long run. We have already received many inquiries for our upcoming new high-wattage drivers from plant lighting clients.Q: What are Mean Well's main target regions? What new markets does Mean Well plan to expand into?Chen: China is currently our largest market, accounting for 45% of Mean Well's revenues, followed by the Europe, Middle East and Africa (EMEA) region with a revenue proportion of close to 30% and Pan America 13%. The rest is from Asia and Taiwan.However, around 50% of our power product shipments to China are later transported to Europe and North America in our clients' final products such as lighting devices or automation equipment.Because of the high revenue share from China, we have been pushing expansions, aiming to boost our sales from other markets to lower the risk. For 2018, we are targeting several emerging markets such as Brazil, Russia, India, as well as South Korea for the expansion plan and have increased our effort in these markets' operation.Tsai: Mean Well currently has distribution partners in all of the markets we have entered and is planning different business strategies for each region depending on their specific characteristics, to widen our reaches.Q: Is Mean Well developing products for any new applications?Yu: We have seen increasing orders for emerging applications such as IoT devices and gambling machines and also orders for power supplies used in arcade stores' claw machines and game consoles.However, Mean Well does not have a specific product line for these particular applications so the clients usually procure power supply devices from our existing industrial power series for their needs.Mean Well executives: Alfie Yu (left), Yvonne Chen (center) and Alex Tsai (right)Photo: Joseph Tsai, Digitimes, August 2018

Taiwan-based TUL, specializing in AMD graphics cards, has announced a move to team up with National Taiwan University of Science and Technology (NTUST) and regtech (regulation & technology) specialist venture platform QRC Japan to jointly develop blockchain and IoT technologies and applications and cultivate blochain talent.TUL president Ted Chen said Taiwan's IT industry boasts strong hardware manufacturing prowess and excellent R&D talent, and the integration of blockchain and IoT involves unlimited application potentials and technological coverage, providing the best turning point for Taiwan industries to carry out digital transformation in the big data era.Chen continued that as a top science and tech academy in Taiwan, NTUST has been dedicated to cultivating high-end tech engineering and management talent, having amassed abundant experiences in handling research projects in cooperation with top international tech colleges and enterprises. QRC Japan, Chen added, has been well experienced in developing blockchain technologies, offering blockchain training programs and providing regulatory advices.Chen stressed that through cooperating with NTUST and QRC, TUL hopes to effectively nurture blockchain-related talent, develop blokchain applications to image processing, biomedical and AI high-performance computing fields, and build connections with international blockchain stages. As crypto mining graphic cards will no longer serve as a main growth driver, TUL now focuses more on such product lines as high-end gaming graphic cards, industrial-control graphic cards, SoC motherboards and FPGA solutions, with its customized industrial-control graphic cards well adopted by major IPC makers, according to Chen.

Long noted for stringent computer system security management, Taiwan Semiconductor Manufacturing Company (TSMC) recently unexpectedly suffered a virus infection at part of its fab tools and computer systems, fueling concerns of how enterprises address similar network security problems in the era of Internet of Everything, particularly industrial IoT (IIoT) and smart manufacturing operations.TSMC has stressed that the virus infection incident was mainly caused by human errors seen in the process of software installation at new fab equipment. But for companies - whether the virus is spread to internal computer systems due to possible hacker attacks during system installation; or erroneous software installation at new tools; or whether the virus is spread to private cloud systems to various fabs due mainly to improper operation by internal engineers and their failure to fix it immediately - the key point is how to figure out effective ways to stall external hacker attacks and tackle possible internal network security problems.In a single machine operation environment, once any single machine malfunctions, only that particular machine has to be shut down, repaired or replaced. But in the IIoT world, whether in the open Internet environment, semi-closed or fully-closed intranet environments, any small virus can be immediately spread to all networks through any single machine, equipment or system connected to the networks, paralyzing the operation of the networks or generating new parameters to affect production. Such potential risks may arise from poor internal operation, usage and management practices, in addition to hacker attacks from outside networks.For most manufacturers, they would face much larger risks than TSMC from incorporating fully digitalized and networking IIoT environments, especially now that many IIoT platforms highlight open-type platform architectures in addition to networking and digitalization.TSMC's virus infection incident should be a lesson for manufacturers about security issues facing the future development of the IIoT industry - although that should not deter them from embracing that future.Nevertheless, if it is an irreversible trend for manufacturers to march toward the development of IIoT operations and the danger of hacker attacks or virus infection will not disappear at all, then how to prevent, stall, eliminate and tackle diverse hacker attacks and virus infections will actually create a new "blue ocean" market that one may want to invest in.