Shipments of Oculus' first virtual reality (VR) device, the Rift CV1, will be delayed to August due to a shortage of parts. While Oculus is reluctant to reveal which components are in short supply, Digitimes Research's sources indicate that there is a shortage of its customized Fresnel lenses.Additionally, digital games running on the Rift have been cracked. Impeded by both hardware and software issues, the Rift CV1 may find it difficult to compete with the HTC Vive for the title of the best-selling HMD (head-mounted display) VR device in 2016. Sophisticated optical design for the lenses and an unsmooth manufacturing process at a new supplier have resulted in a low yield rate of Fresnel lenses, affecting shipments of the Rift. The issue is unlikely to be solved promptly as the optical features, display and chassis of the VR device may have to be re-designed, Digitimes Research commented.While the optical designs, including the use of AMOLED panels and Fresnel lenses, for the Vive and the Rift are comparable, HTC has managed to maintain a smooth and sufficient supply of parts and components at its supply chain, optimizing its expertise gained from the manufacture of smartphones, said the sources.The shipment ratio of the Rift CV 1 and HTC Vive in the global PC market in 2016 is expected to stand at 3:7, and the situation could turn worse for Oculus if it fails to address the supply issue fast enough, Digitimes Research believes.

SoC-based graphics cards were the most widely adopted GPU product in 2015 with a market share over 70%. CPU with integrated GPU was the second-largest GPU products, but its market share has been dropping every year because of the PC market's weakening demand. Shipments of discrete graphics cards have also been dropping along with the weakening PC shipments, but AMD's and Nvidia's new GPU architectures are expected to help heat up related shipments in 2016. AMD's new architecture, which has advantages in supporting DirectX 12, will give AMD a chance to narrow its gap with Nvidia.Although AMD's GPU product types and shipments are both far higher than those of Nvidia, AMD is only seeing thin profits from product lines such as semi-custom and APU products, while its discrete graphics card business has been seriously suppressed by Nvidia. However, in 2016, with better control in graphics technology standards and a product schedule that catches up with competitors, Digitimes Research believes AMD will be able to gain market share from Nvidia.Nvidia has high shares in high-end and professional graphics card markets. Although the company has withdrawn from the mobile communication chip market, its operation in high-end embedded applications such as car electronics products will continue to contribute strong profits. However, the company is expected to face rising pressure in the discrete graphics card market in 2016.For the SoC-based GPU, mobile communication chips, which are mainly application processor (AP), account for the largest share in the product sector and ARM is the largest player in the AP GPU market with an over 50% market share in 2015.GPU IP player Imagination is losing market to ARM as it is seeing issues pushing its mid-range products, causing demand for its products in China to drop and it only had a market share of 18.3% in 2015.Qualcomm also saw its market share in the AP GPU market decline in 2015 because its high-end products achieved weaker-than-expected sales. However, Qualcomm's share is expected to rise in 2016.

There were an estimated 371.360 million handset-use touch panels and 48.849 million touch panels used in smaller-than 11-inch tablets shipped globally during the first quarter of 2016, decreasing 15.0% and 29.0% respectively on quarter, while the global shipments of 6.836 million notebook-use touch panels in the period increased 0.8%, according to Digitimes Research.Taiwan-based makers shipped 17.424 million handset-use touch panels, 8.209 million units used in the smaller-than 11-inch tablets and 2.755 million units used in notebooks and 11-inch or larger tablets in the first quarter, respectively slipping 38.3%, 31.3% and 11.9% on quarter, Digitimes Research indicated.On-Cell models accounted for 36.6% of handset-use touch panels shipped by Taiwan-based makers, film-based capacitive ones for 33.1%, OGS (one glass solution) ones for 21.7% and GG (glass/glass) ones for 8.6%.Of Taiwan-based makers' shipments of touch panels used in smaller-than 11-inch tablets, 57.3% were of film-based capacitive models, 32.1% of GG ones, 7.9% of On-Cell ones and 2.7% of OGS ones.Glass-based models took up 96.4% of Taiwan-based makers' shipments of touch panels used in notebooks and 11-inch or larger tablets, with the remaining 3.6% being of film-based ones.

Taiwan server players' revenues from products including server motherboards, servers, storage and related network equipment, continued to enjoy growth on year to surpass NT$500 billion in 2015, according to Digitimes Research.Thanks to a strong performance in the fourth quarter of 2015, worldwide sever shipment volumes rose 9.8% on year to reach 11.08 million motherboards in 2015. Datacenter server shipments will continue to grow strongly on year in 2016 thanks to rising demand from the cloud computing market.Shipments from traditional server brand vendors are expected to increase slightly on year in 2016, helping overall worldwide server shipments to grow 5.9% on year. Digitimes Research believes server shipments have a chance to grow significantly after Intel releases its next-generation Purley platform in the second quarter of 2017.With growing demand from the cloud computing market, Taiwan's server shipments grew 12.5% on year to break 10 million units in 2015, accounting for 90.7% of worldwide shipments and the percentage is expected to grow to 91.1% in 2016. Inventec, Foxconn Electronics (Hon Hai Precision Industry), Wistron and Quanta Computer are the top-four server ODMs in Taiwan, but their combined share of Taiwan's server shipments dropped on year in 2015 as major brand vendors such as Dell, distributed their orders to other ODMs to reduce risks. However, the share is expected to rise in 2016.

A main motivation of Foxconn Electronics' investment in Sharp is to develop AMOLED panels mainly for use in smartphones, for Foxconn is a global leader in the smartphone OEM sector, according to Digitimes Research.Following Samsung Electronics' adoption of AMOLED panels for smartphones, Apple and other vendors will do so for mid-range and high-end smartphone models. Global shipments of smartphone-use AMOLED panels will increase from 3.45 million units in 2016 to 10.24 million units in 2020 and further to 13.57 million units in 2025, Digitimes Research estimates.Sharp will set up one 4.5G and two 6G AMOLED production lines with monthly capacity of 13,000, 11,500 and 34,500 glass substrates respectively, with total monthly capacity of 9.85 million 5.5-inch equivalent panels.Thanks to financial support from Foxconn, Sharp's global market share for smartphone-use AMOLED shipments(including flexible models) will rise from 1.1% in 2018, 6.2% in 2020, 10.0% in 2023 and 13.2% in 2025.

Having taken control of Sharp, Foxconn Electronics will obtain Sharp-developed panel technologies including Oxide TFT-LCD, IGZO TFT-LCD, LTPS TFT-LCD and AMOLED. It is also expected to strengthen Sharp's global competitiveness against Samsung Display and LG Display in OLED smartphone and TV applications, according to Digitimes Research.Foxconn and three other members of the Foxconn Group will together invest JPY388.812 billion (US$3.42 billion) in Sharp for a 66.00% stake, with JPY200 billion and JPY60 billion of the investment earmarked for developing OLED and TFT-LCD respectively, Digitimes Research indicated.Sharp will occupy 5.3% of global large-size panel production capacity in fourth-quarter 2016, ranking seventh after Samsung Display, LG Display, Innolux, AU Optronics (AUO), BOE Technology and China Star Optoelectronics Technology (CSOT).However, Sharp and Innolux, a member of the Foxconn Group, will have a combined global share of 21.9%, slightly less than 23.7% for Samsung Display and 22.7% for LG Display.

China-based makers will ship an estimated 167.294 million touch panels in the first quarter of 2016, decreasing 22.0% on quarter but increasing 17.2% on year, according to Digitimes Research.Shipments will consist of 142.794 million touch panels for smartphones, sequentially down 22.1%, 23.096 million for tablets, down 21.9%, and 1.405 million units used in notebooks, down 20.3%, Digitimes Research indicated.For smartphone touch panels, film-based capacitive models will account for 66.6% of shipments, glass-based capacitive models 27.1% and resistive models 6.3%. In contrast, glass-based capacitive models will account for 72.8% of tablet-use touch panels.

The development of sensor products will play a key role in Korea's plans to ramp up the production value of related IoT (Internet of Things) products from KRW1.6 trillion (US$14.5 billion) in 2014 to KRW7 trillion in 2020, according to Digitimes Research.Led by Korea's Ministry of Trade, Industry and Energy (MOTIE), the Korea government will push for self-sufficiency in production of sensor products, including smart sensors, sensor hubs and sensor fusion solutions and other niche/innovative sensors for IoT applications.Korea's self-assessed its overall sensor technology rating at 64.7 (on a scale where the US rated 95, Europe 98 and Japan 97) in 2015, and therefore it still has to rely on imports of a number of sensor products, including accelerometers, gyroscopes, pressure sensors and other MEMS sensor products.Under MOTIE's plans, Korea will inject a total of KRW150.8 billion to assist its small and medium enterprises to develop advanced sensor products, focusing on 10 sensor items, which include those related to imaging, inertial forces and pressure. The plans also call for the development of smart sensors integrated with logic, communications, signal processing ICs.Meanwhile, Samsung Electronics will also play an important role for the development of niche and innovative sensor products for IoT applications, said Digitimes Research, noting that Samsung already acquired or committed investments in a number of hardware and software companies engaged in the development of IoT products in 2014-2015.

Server brand vendors and ODMs are mainly purchasing their components in three business styles: buy and sell, direct sourcing and direct buying and Taiwan-based component makers are a key part of the server supply chain and have acquired an important position in the industry.For key components such as the CPU and baseboard management controller (BMC), brand vendors usually assign a specific supplier, while suppliers of passive components can be decided by ODMs themselves, according to Digitimes Research's latest report about servers.Other key server components include power ICs, connectors, hard disk drives (HDD), cooling modules, power supplies, chassis, PCBs and slide rails. Except for CPUs, power ICs and HDDs, Taiwan-based suppliers hold a significant influence in all of these component industries.

Observing the launches of consumer digital still cameras (DSC) scheduled in spring 2016, the number of models is 30% less than the same period a year ago. The top-two vendors, Nikon and Canon, each have three models fewer, while Sony and Samsung Electronics will not release any new models for the season, according to Digitimes Research.To differentiate from smartphones, DSC vendors will mainly target their consumer DSCs for spring 2016 at high-specification-and-high-price, raising the proportion of new models with prices above US$500 from 6% in spring 2015 to 36.4% in spring 2016.For spring, Nikon has launched three DL-series DSCs, adopting the Nikkor lenses, which were originally used only in its DSLR cameras, and a 1-inch CMOS image sensor, priced between US$630-950, pushing consumer DSCs to start featuring DSLR camera equipment, according to Digitimes Research's latest report.