Digitimes Research estimates that China's tablet AP shipments will reach 24.3 million units, staying flat from a quarter ago and down 29.6% on year, as related chip makers are not able to further cut their costs or achieve breakthroughs in product design and therefore, are seeing demand weakening.MediaTek's orders from Amazon and Best Buy for the third quarter will not last into the fourth quarter and the chipmaker will see a sharp drop in shipments in the fourth quarter, with the share in China's overall tablet AP shipments dropping to 20.6%.Intel is gradually replacing its previous-generation Bay Trail platform with Cherry Trail for the high-end segment, and the inexpensive SoFIA for the entry-level segment for the fourth quarter. However, Intel will still see an obvious decline in related shipments because the CPU giant has dramatically cut its subsidies on the APs.Starting the fourth quarter, Digitimes Research will count Rockchip and Spreadtrum's SoFIA-based AP shipments as Intel's volume. Since SoFIA's shipments are not large enough to cover the gap created by Bay Trail's absence, Intel's share in China's overall tablet AP shipments will slide to 18.7% in the fourth quarter.Rockchip will continue to ship ARM-based APs in the fourth quarter, but its SoFIA-based AP shipments will be the main growth driver for the chipmaker's fourth-quarter shipments.Although Intel's tablet AP shipments in China will slump in the fourth quarter, the company will still be the second-largest supplier, while Rockchip will beat Allwinner by 2pp in market share and stayed third.Qualcomm's partnership with Allwinner is expected to help slightly increase the adoption of Qualcomm's solutions in China; however, despite having an advantage in baseband solutions, Qualcomm's high costs are putting the company at a disadvantage to account for a large market share.

There will be 58.7 million tablets, including 2-in-1 and screen-detachable hybrid models, shipped globally in the fourth quarter of 2015, increasing 15.9% on quarter but decreasing 22.6% on year.Shipments will consist of 14 million iPads, 24.5 million non-iPads and 20.2 million white-box units, according to Digitimes Research.Apple will account for 23.9% of shipments, followed by Samsung Electronics 14.5%, Lenovo 5.3%, Amazon 4.8%, Asustek Computer 3%, Microsoft 2.3%, TCL 2.2%, Huawei Device 2%, LG Electronics 2% and Acer 1.3%, Digitimes Research indicated.Of 38.5 million tablets to be shipped by international vendors (except white-box) in the fourth quarter, 30.3% will be 7-inch models, 18.3% 7.9-inch, 5.3% 8.x-inch, 26.2% 9.x-inch, 10.6% 10.x-inch and 9.2% 11-inch and above. Android, iOS and Windows models will respectively take up 56.8%, 36.4% and 6.9% of the shipments.Taiwan-based ODMs/OEMs will ship 20.5 million tablets to international vendors, with Foxconn Electronics to account for 59.8% of shipments, Compal Electronics 18.3%, Pegatron 10.6%, Quanta Computer 6.0% and Wistron 1.1%.

Worldwide tablet shipments reached only 50.64 million units in the third quarter, up 9% from the second quarter, but still down sharply by 18% on year, despite the fact that Europe and US retailers were aggressively preparing for the year-end holiday shopping season and demand from Russia and Eastern Europe started recovering.Apple's tablet shipments dropped to only 9.9 million units in the third quarter since the vendor only launched one new model - the new iPad mini 4 - in the quarter for 2015 and has been focusing more on digesting existing inventory instead of promoting the new one. Apple did not cut the prices of its tablet products, which also undermined its shipments in the quarter, according to Digitimes Research's latest report about tablets.White-box tablet vendors performed better than expected in the third quarter due to a number of reason: There were stable orders from their Europe and North America clients for the year-end holidays; demand from emerging markets started to recover; and the China currency devalued slightly. White-box vendors together shipped 20.1 million tablets in the third quarter, up more than 20% from a quarter ago.Samsung Electronics, which ranked the second largest worldwide in the third quarter, turned its focus to above 7-inch products, but the strategy caused the company's share in worldwide shipments to drop in the quarter despite a boost in the product ASP.Third-place Lenovo achieved strong shipments in the third quarter with its products' cost-performance ratio better than competitors'.Asustek's shipments in the quarter saw weaker growth than those of the previous years, partly impacted by the fact its ZenPad quality issue remained unresolved. Asustek was the fourth largest in the third quarter.Microsoft dropped to the eighth place in the quarter as the company was ready to launch its new Surface products in October.Overly relying on orders for iPads, Taiwan's tablet shipments only reached 15.09 million units in the third quarter. Foxconn received Apple's new orders for the iPad mini 4, but Compal had to share with China makers orders from Amazon. Inventec received orders from Asustek and started mass production in the third quarter.

Korea panel makers aim to hold a 50% share in total display sales generated in 2017 through production of AMOLED, flexible, transparent and glasses-free 3D displays, according to Digitimes Research.Through high-end, value-added products coupled with advantages in vertically integrated supply chains the makers are expected to secure strong orders throughout the year. The makers have already begun pursuing many of these developments but plan to further increase flexible AMOLED production along with other applications such as EPD solutions in order to dominate the mid-range, high-end and specialized segments.Many of these developments are being put into action form 2015-2016 but are expected to fully unfold in 2017 in time when China makers are expected to unleash new capacity.In terms of supply chain developments, Korea makers will aim for high-profit applications and reduced costs through improved production management and logistics in addition to improved yields for advanced printing methods, said Digitimes Research.

Taiwan makers' shipments of large-size (9-inch and above) TFT LCD panel shipments reached 58.63 million in the third quarter of 2015, up 1.2% on quarter. The makers benefited from stable TV panel orders in addition to rush orders for PC panels near the end of the quarter, according to Digitimes Research.Heading into the fourth quarter of the year, the makers will see an 8.8% sequential decline due to weak demand coupled with oversupply in the market. The makers will see pricing decline and are aiming to reduce production in order to offset losses.In terms of market share for 2015, the makers have seen their total share for large-size applications decline each quarter, with accumulated share expected to reach 32.6% in the fourth quarter. For 2015 the makers are expected to hold a 34.2% global share for large-size TFT LCD applications.Global large-size LCD panel shipments are expected to reach 674 million in 2015, down 5.6% on year, with notebook, monitor and tablet applications all declining approximately 11-14% on year. TV panels are the only segment that will see an increase, at 4.7% on year, in 2015.Within the global shipments, Taiwan makers' large-size LCD panel shipments for 2015 will reach 230.2 million, down 13% on year, with Innolux expected to reach 101.8 million and AU Optronics (AUO) 120.8 million, said Digitimes Research.

Solid-state autofocus solutions developed by US-based LensVector have been applied in entry-level smartphones since October 2015 and, although at very small volumes currently, have considerable potential market due to advantages in durability, power consumption, thickness and production costs compared with current mainstream VCM (voice coil motor) solutions, according to Digitimes Research.Since Apple adopted a Sony-developed on-chip PDAF (phase-detection autofocus) solution for its iPhone 6 series to reduce autofocus time to 0.3 seconds or less, other smartphone vendors have followed suit by adopting similar solutions, Digitimes Research indicated. Meanwhile, other vendors have adopted dual-lens solutions to decrease autofocus delay.While both on-chip PDAF and dual-lens solutions work by increasing the mechanical operating efficiency of VCMs, solid-state autofocus solutions are based on differential refractive indexes of liquid crystal cells.China-based Sunny Optical Technology has become a partner for LensVector, but Taiwan-based CMOS image sensor designers, lens module developers and smartphone vendors have not yet tried other autofocus solutions. In view of increasing competition in production costs, it is worthwhile looking into VCM alternatives such as solid-state autofocus.

Wafer foundry houses in China have stepped up efforts to develop Fully Depleted Silicon-on-Insulator (FD-SOI), or also called Ultra-Thin Body (UTB), processes for wafer production, compared to the Fin Field-Effect Transistor (FinFET) processes being adopted by Taiwan Semiconductor Manufacturing Company (TSMC) and Intel, according to Digitimes Research.FD-SOI is characterized by lower forward voltage and operating voltage requirements and also more power saving. Meanwhile, the operating cost of FD-SOI per circuit is lower than that of FinFET.However, the FD-SOI process has not been scaling down as well as FinFET, and the transistor density of FD-SOI is also lower than that of FinFET, Digitimes Research noted.Current advocates for the FD-SOI process include Globalfoundries, Samsung Semiconductor and STMicroelectronics. China-based HH Grace Semiconductor is also expected to join the FD-SOI camp.However, combined revenues of the FD-SOI camp are currently lower than those recorded by TSMC, a reflection of the foundry capacity of the different processes. This disparity in turn can affect chipset suppliers' choice of foundry services.At present, only chipmakers which have small foundry orders for low- and medium-priced chips that cannot receive priority foundry services at FinFET-based foundry houses, will likely seek FD-SOI production, commented Digitimes Research, adding that chip suppliers rolling out high-priced, high performance, high density chips at volume will incline to produce their devices at FinFET fabs.

Taiwan makers' shipments of LCD TVs reached 9.26 million in the third quarter of 2015, up 16.6% on quarter, according to Digitimes Research.The makers benefited from TV developments from Toshiba and Xiaomi, and also saw orders increase from various customers to meet peak demand.Shipments to customers in the US increased but orders to Mexico where makers were previously benefiting from government-sponsored orders were on the decline causing overall shipments to North America to remain flat in the third quarter. Approximately 45% of the makers' shipments went to North America during the quarter.Taiwan makers' shipments to Asia and Europe account for 28.8% and 22% respectively during the third quarter while 50-inch and above size units accounted for a 24.3% share. Due to the decline in Mexico, 32-inch and below size TVs held a 15% share.TPV and Foxconn Electronics held the top spots in terms of overall shipments while Compal fell to third place. Wistron saw its position move from third to fifth.Heading into the fourth quarter, Taiwan makers' shipments will increase 2.2% to 9.49 million, and shipments are expcted to reach 33.59 million for 2015, down 5% on year, added Digitimes Research.

Shanghai Huahong Grace Semiconductor Manufacturing Corporation (HHGrace) is currently the second largest foundry house in China in terms of booth revenues and production capacity, and Digitimes Research believes the company is an important indicator of China's development of technology and strategies for 8-inch fabs.HHGrace was formed by merging Shanghai Huahong NEC and Grace Semiconductor in 2013 and currently has three 8-inch fabs with a total production of 124,000 wafers a month.HHGrace offers foundry services for embedded flash, discrete components, logic, RF, analog and power management (PWM) chips, EEPROM and NOR flash chips.HHGrace's foundry applications also include smart cards, connected chips, MCUs, sensors and telematics devices. Based on its current platforms and technology, the foundry house will certainly look for business opportunities in the IoT and wearable device markets, according to Digitimes Research.During the period from 2015-2017, HHGrace is expected to commit more R&D efforts to scale-down its process nodes for providing general or specialty foundry services for logic, analog and PWM ICs, MEMS chips and embedded non-volatilememory (eNVM) solutions, specially for low-power consumption.HHGrace and other 8-inch fabs are also to focus on the development specialty process nodes in order to avoid direct competition with 12-inch fabs.However, production of analog and PWM ICs, discrete components and LCD driver ICs are likely to be the growth drivers for 8-inch fabs in China in the foreseeable future.

Mobile payments outside financial institutions in China expanded to CNY8.24 trillion (US$1.299 trillion) in 2014 from the CNY1.19 trillion a year earlier, with third-party e-payment service providers accounting for 90.9% of mobile transactions, according to Digitimes Research.China-based telecom carriers, which now account for less than 10% of the mobile payment market in China, will try to regain their leading market position in the segment by optimizing NFC payment chains available within telecom networks, Digitimes Research indicated.However, a lack of successful business model and the homogenization of services provided by telecom carriers have impeded the growth of carriers' mobile payment businesses, said Digitimes Research.On the other hand, Alipay under the Alibaba Group has seen the number of its mobile payment accounts and mobile payment revenues continue to hit new records. Alipay is expected to continue to serve as the top vendor in the mobile payment segment in China for the next few years as the vendor has continued to expand its business operations through acquisitions, offering subsidies to its users, and strengthening its mobile payment patent portfolio, Digitimes Research commented.