The production value of Taiwan's IC design industry will rise 13.1% in 2015, thanks mainly to continued-strong demand coming from the smartphone sector, according to Digitimes Research.The output from MediaTek, Taiwan's largest IC design house, will remain a key contributor for the island's overall IC design industry output value in 2015, Digitimes Research suggested. MediaTek specializes in SoC designs for smartphones and tablets.Meanwhile, LCD driver IC specialists such as Novatek Microelectronics and Himax Technologies will enjoy brisk shipments buoyed mainly by growing demand for Ultra HD TVs, Digitimes Research indicated. As for small-size panel applications, the companies will also benefit from rising product ASPs as more smartphones feature higher resolution displays, Digitimes Research said.In addition, companies in the analog IC and niche memory sectors are expected to perform well in 2015 making a positive contribution to the overall industry's production value, Digitimes Research noted. The production value of Taiwan's IC design industry is forecast to reach NT$612.01 billion (US$19.5 billion) in 2015.

Tablet application processor (AP) shipments to China are estimated to decline 24.2% sequentially to reach 26.3 million units in the first quarter of 2015. Compared to the same period a year ago, the volume will drop 7.7% and be the first time China's tablet AP shipments experience an on-year decline because of excess inventory from the fourth quarter of 2014, fewer working days in the quarter due to the Lunar New Year holidays, and seasonal factors.In the fourth quarter of 2014, tablet AP shipments to China grew 4.7% from a quarter earlier to reach 34.7 million units, according to Digitimes Research's figures.As for tablet AP suppliers' performances in the first quarter, top-three suppliers of the fourth quarter of 2014, MediaTek, Rockchip and Allwinner Technology will all suffer significant declines sequentially, especially Allwinner. MediaTek will see a drop smaller than Allwinner, allowing MediaTek's market share to rise slightly by 1.1pp on quarter to reach 28.5%.Rockchip is also facing tough challenges from China's weak demand. Although the company's new tablet solutions launched at the end of 2014 were not able to achieve strong shipments, the supplier will still be able to raise its market share by 0.6pp from a quarter ago in the first quarter because of Allwinner.Allwinner's market share will slump from 17.6% in the fourth quarter of 2014 to 15.6% in the first quarter of 2015, being surpassed by Intel, which will see its market share rise from 15% to 16.3%.In terms of AP architecture, the Cortex-A7 will account for 53% of the overall volume in the first quarter, down slightly from 53.5% in the fourth quarter of 2014. Although more suppliers are developing 64-bit solutions, there will not be any obvious market share growth due to weak market demand.

Taiwan makers' shipments of touch panels used in handsets and tablets are expected to drop 10.8% and 22.3%, respectively, in the first quarter of 2015, according to Digitimes Research.During the fourth quarter of 2014 Wintek suffered financially and G/G orders from Apple were weak, which influenced the 8.1% sequential decline in handset touch panel orders the makers witnessed during the quarter despite the period traditionally being a strong time for orders.However, tablet touch panel orders during the fourth quarter rose 9.4% on quarter but the number was weaker than the 35.9% growth recorded from makers outside Greater China.Taiwan makers' shipments of notebook touch panels meanwhile declined 13.2% in the fourth quarter as demand strengthened in the previous quarter, and are expected to increase 56% in the first quarter of 2015 due to new orders including those for 2-in-1 notebook/tablet applications.In terms of technology, On-Cell is showing obvious signs of growth in the market, with Innolux targeting international vendors such as Motorola Mobility for handset applications and AU Optronics (AUO) notebook applications. Innolux is also pushing thin-film solutions.Digitimes Research also found that TPK is losing strength in orders for silver-nano-wire technology but is growing in OGS orders for higher-end smartphone and tablet applications from international vendors. The company is also expected to lead the way in orders for OGS applications used in notebooks and 2-in-1 units, which will push its notebook touch panel shipments up 79.7% on quarter in the first quarter of 2015.

Within the Internet of Things (IoT) market the smart home segment is one of the most talked about areas. However, there currently lacks a mainstream standard, and vendors, content providers and other service providers are still trying to solidify plans on how to tackle the market and create business opportunities in 2015, according to Digitimes Research.Multiple content platforms for TV applications have emerged from different vendors and content providers. In addition, other service-based and product-based companies are still assessing how to squeeze into relevant ecosystems and provide value.Connecting other smart appliances is currently a focus for vendors as well, but developing related services that hardware providers have yet to provide is still a factor many vendors are discussing going into 2015, added Digitimes Research.

The global LED lighting market value in 2015 is estimated at US$29.908 billion, increasing on year by 24.8% and accounting for 27.2% of the 2015 global market value for all lighting products, according to Digitimes Research.LED light bulbs, light tubes (T5), projection lamps and street lamps are the four main categories of LED lighting products, Digitimes Research indicated.There will be 1.81 billion LED light bulbs shipped globally in 2015, hiking on year by 59.9% and taking up 13.9% of all light bulbs shipped in the year.Global LED light tube shipments in 2015 will reach 520 million units, growing on year by 58.5% with a penetration rate of 13% of global shipments for all types of light tubes.There will be 1.035 billion LED projection lamps shipped globally in 2015, with on-year growth of 56.3% and penetration of 23%.Global LED street lamp shipments will rise on year by 30.1% to 9.43 million units in 2015, accounting for 11% of all street lamps shipped in the year.

China's government policies for supporting the local IC design industry have put less emphasis on intervention measures such as offering tax breaks, providing direct financial support, and making purchases of domestic products, while shifting their focus to the establishment of investment funds, according to a recent Digitimes Research Special Report.The report, titled 2015 China IC design market forecast, notes that investment funds will be set up by not only China's central government, but also local governments, aiming to foster the development of the local IC design industry. The government-led funds will play an important role in driving the industry growth during the nation's 13th Five-Year Plan period (2016-2020), Digitimes Research said.The No. 18 Document of China's State Council already gave strong support to IC companies with tax incentives, direct financial assistance and government purchases of domestic products, Digitimes Research suggested. Between 2001 and 2010, the number of China-based IC foundries grew to nine companies from four, while the number of IC design firms increased rapidly to 479 companies from 98.The No. 4 Document announced by China's State Council in 2011 showed that tax incentives awarded to the local IC companies have been narrowed significantly. The move indicates a change in government policies for supporting the local IC industry.

China's anti-trust investigation of Qualcomm has come to an end with the US chip vendor making concessions in order control damage to its operations in the country. The fine for the company and its agreement to adjust licensing fees are expected to only have a limited impact on Qualcomm's revenues and gross margins. However, the cancellation of Qualcomm's patent cross-licensing agreements will come as an advantage for China vendors looking to expand the licensing businesses of their own.Qualcomm previously demanded its clients sign an "umbrella" cross-licensing agreements that cover all of its clients. It was meant to protect small vendors from being sued by bigger ones over alleged patent infringement. The outcome of the antitrust probe means Qualcomm will be able to protect its share of the China market, which accounts for half of its revenues. Qualcomm can expect stable operations in China and strengthen its deployment of its own patents.But the setback in terms of the cross-licensing has cast doubt over the company's ability to continue such a practice elsewhere. In fact, South Korea has already ruled that Qualcomm will need to cut its licensing fees for Korea-based vendors to a level similar to that in China.Qualcomm will still be able to charge its clients licensing fees based on a percentage of the prices of their mobile devices, but the fees will be 35% lower than their previous levels, while the fees for 3G/4G hybrid and 4G standalone solutions will be separately calculated.Qualcomm is also expected to charge a fee for 3-mode LTE solutions, but will not be able to force its clients to sign a crossing licensing agreement. Such a move is expected to benefit vendors such as ZTE and Huawei who have large numbers of patents. Vendors who do not have too many patents, despite the benefit of reduced licensing fees charged by Qualcomm, may still need to spend big sums paying for the patents they license from other China vendors.Such a development may undermine Qualcomm's business. Without the protection from the cross-licensing agreement, device vendors may no longer see it necessary to choose Qualcomm solutions.To minimize the impact, Qualcomm has already worked out some other forms of protection to help clients avoid the threat of patent disputes. But China-based vendors may need to pay extra for the continuous protection. But such protection may not come cheap.On the other hand, both Huawei and ZTE are planning to release in-house developed solutions to replace those from Qualcomm. According to Digitimes Research's figures, annual shipments of Huawei's smartphones running on the vendor's own solutions amounted to almost 20 million units in 2014. This shows Huawei's reliability on Qualcomm has been dropping.For Qualcomm, it faces the possibility of more antitrust probes in other countries. And it is imperative for the chip vendor to maintain the competitiveness of its products.

In an effort to secure TV panels in 2015 as supply will be limited, Korea-based TV vendors Samsung Electronics and LG Electronics are each planning to outsource TV production orders to makers in Taiwan and China such as Compal and BOE who have relations with supply chain makers that can guarantee supply, according to Digitimes Research.LCD TV panel supply is expected to be limited in 2015, particularly for sizes 32-inch, which means that competition to secure such panels has increased. TV vendors meanwhile are looking to get around the situation and believe they have an advantage through outsourcing TV production to ODMs that have continuing relationships with panel makers such as Compal and Taiwan-based panel makers.LG and Samsung are two of the vendors expected to take such measures in 2015, with each planning to outsource upwards of one million LCD TVs to ODMs. LG is expected to transfer orders to Compal and Samsung to China-based BOE, with LG's orders expected to pick up in the second quarter of 2015.Samsung meanwhile aims to reach 60 million in LCD TV sales for 2016, up about 10 million on year, and plans to secure 32-inch LCD TV panels from BOE to help meet demand. Samsung may receive as high as three million 32-inch TV panels from BOE in 2016 depending on the panel maker's developments during the year, said Digitimes Research.

Output value for the global IC foundry industry is forecast to reach US$54.8 billion in 2015, up 12% from US$49 billion in 2014, according to Digitimes Research.IC demand for 4G smartphones will fuel the foundry sector's 12% output value growth in 2015, despite several unfavorable factors such as decelerating tablet sales, the continued-slow growth in PC shipments, and an overall slowdown in the growth of smartphone shipments, said Digitimes Research.Leading pure-play foundry TSMC has budgeted a record US$12 billion in capex for 2015. During the year, the company is looking to expand its 16nm FinFET process production capacity while building manufacturing lines for its more-advanced 10nm technology, Digitimes Research indicated.In addition, TSMC is expected to see sales generated from 20nm process technology jump to US$6.34 billion in 2015 from US$2.15 billion in 2014. The foundry moved its 20nm node technology to commercial production in the third quarter of 2014, Digitimes Research said.Meanwhile, IDM foundry Samsung Electronics has been focusing on its 14nm FinFET development and time-to-market since 2014, Digitimes Research observed. By partnering with Globalfoundries, Samsung will also be able to make its offering more cost-competitive than rivals while achieving better production yield rates in the advanced 1Xnm process market segment in 2015, Digitimes Research said.Digitimes Research forecast that Samsung's share of the global IC foundry market will climb 1.5pp to 10% in 2015.

Google is planning to push 2-in-1 devices in 2015, according Digitimes Research's inquiries within the upstream supply chain. Google's 2-in-1 Chromebook designed by Quanta Computer is expected to be completed by the end of the first quarter.The device features a detachable form factor and runs Android in the tablet form and Chrome when attached to a keyboard. The product's availability shows that Google has achieved a dramatic advance in its progress integrating Android and Chrome OS.The 2-in-1 Chromebook is believed to be launched under the Google brand. Google announced plans to develop products and applications to seamlessly integrate Android with Chromebook at Google I/O in June 2014. In addition to Google, some brand vendors also plan to launch 2-in-1 Chromebook products in 2015, Digitimes Research's findings showed.In 2014, worldwide Chromebook shipments reached 6.5 million units, but over 85% of the volume was sold in the US, and over 80% of the sales were K12 and below education procurement orders, which was not healthy for Chromebook to expand its market presence.However, with the integration of the Android ecosystem, Chromebooks are expected to gain a better chance of expanding in the consumer market and countries outside the US.To defend from 2-in-1 Chromebooks' penetration, Microsoft is planning to offer new low-price projects for Windows 10 for the second half, and will provide low licensing fees for 10.1-inch and below 2-in-1 devices and models with display sizes between 10.1- and 12.5-inch.At the same time, Microsoft will also launch an own-brand 10.6-inch Surface detachable 2-in-1 to promote Windows-based 2-in-1 devices.