The production value of Taiwan's IC design industry is forecast to rise 14.4% sequentially in the third quarter of 2015, thanks to peak seasonal effects, as well as rollouts of new smartphones and other mobile devices, according to Digitimes Research.Combined revenues of Taiwan-based IC design houses are forecast to reach NT$141.06 billion (US$4.46 billion) in the third quarter, down 3.5% from the same period in 2014, however, said Digitimes Research.Taiwan's IC design houses generated a combined NT$123.29 billion in the second quarter of 2015, representing a slight 0.7% sequential increase but a decline of 10.6% from a year ago, Digitimes Research indicated. Due to continued weakness in the PC market as well as slower-than-expected growth in smartphone shipments worldwide, device manufacturers have been engaged in inventory adjustments, Digitimes Research observed.In the second quarter, MediaTek generated revenues of NT$47.04 billion leading Taiwan's IC design industry. MediaTek's revenues for the quarter showed decreases of 1% sequentially and 13.1% on year.MediaTek with its new Helio X10 and X20 SoC series has put increased focus on the high-end smartphone market segment. Shipments for MediaTek's high-ASP solutions will buoy the overall production value of Taiwan's IC design industry in the third quarter, Digitimes Research said.

Taiwan's LCD monitor shipments reached only 19.42 million units in the second quarter of 2015, down 10.3% from the same quarter a year ago, showing that the industry is still in a downturn, according to Digitimes Research's new report on LCD monitors.Within those shipment figures, 20-inch and above size products held a 65.4% proportion. Due to a decline in upstream pricing for LCD panels, the ASP for monitors only increased slightly, bringing about a quarterly increase in output value at US$2.27 billion.Qisda was the second largest provider of LCD monitors during the second quarter due to orders from Dell, holding a 15.6% share, Digitimes Research found.Taiwan makers' shipments are expected to increase 4.7% sequentially in the third quarter to around 20 million but the shipment figure will still represent an on-year decline of 8.2%.Global LCD monitor shipments are expected to reach 130 million in 2015, down 4.8% on year, with Taiwan makers accounting for 79.05 million.

Smartphone shipments by China-based handset vendors totaled 114.3 million units in the second quarter of 2015, up 18.4% sequentially and 7.4% on year, according to the latest data compiled by Digitimes Research. The pace of rebound in the second quarter was slower than expected due to an increasingly mature domestic market and decreased orders from emerging markets such as Russia and Brazil which have affected shipments of independent design houses and ODMs. While the number of 4G subscribers increased significantly in the second quarter, growth in the total number of smartphone subscribers was limited as most mobile phone users were simply switching from 3G to 4G services, said Digitimes Research. Huawei Device, Xiaomi Technology and BBK Electronics, which operates smartphone brands Oppo and Vivo, were the top three local smartphone vendors in China in the second quarter, each shipping over 10 million units in the quarter. Huawei led all vendors with its shipments reaching 23 million units in the second quarter, but shipments from Lenovo and Coolpad remained flat due to their over reliance on telecom retail channels. Lenovo even saw its shipments decline to 7.5 million units in the second quarter. Smartphone shipments by China-based vendors are expected to grow at a pace below 20% sequentially and on year in the third and fourth quarters of 2015 as domestic demand is unlikely to stage a strong rebound in the second half of the year, Digitimes Research estimated.

The adoption of Wi-Fi technology by Apple Watch and Android Wear devices are expected to motivate other smartwatch and wearable device vendors to follow suit, according to Digitimes Research.While Apple's adoption of Wi-Fi for Apple Watch was influenced by a number of factors, the use of Wi-Fi will enhance the convenience of Apple Watch and allow the smart device to work independently in case there are no backups from any smartphone.Google has also decided to use Wi-Fi technology in Android Wear devices reflecting the feedbacks from production partners and end-market users over the past year, Digitimes Research noted.Previously, most smartwatches were incorporated with Bluetooth technology, serving as a connection between smartwatches and smartphones, without the need for long-distance or high-speed transmission.The support by Apple and Google over the use of Wi-Fi technology in wearable devices will encourage other vendors to also adopt the technology, making Wi-Fi a standard for smartwatches, Digitimes Research commented.

Qualcomm aims to ramp up its penetration in the entry-level mobile device market by cooperating with Microsoft to launch low-cost Windows Mobile 10 products, while also cooperating with Allwinner Technology to launch 3G/4G solutions for connected tablets, according to Digitimes Research.Qualcomm accounted for about 80% of China's 4G LTE solution market in 2014, but has seen its share decline significantly since the beginning of 2015 due to the roll-outs of competitive models from MediaTek and Spreadtrum Communications, and also due to Qualcomm's own mishap in the deployment of mid-range and high-end solutions, Digitimes Research indicated.To maintain its market share, Qualcomm's cooperation with Microsoft aims to roll out Windows Mobile 10-based smartphones priced at about US$80 in the end-market, with the first wave of such models to be available in the fourth quarter of 2015.The low-cost Windows Mobile 10-based models will utilize Qualcomm's MSM8909 CPU, running on Windows Mobile platform but without the need of paying licensing fees to Microsoft, therefore, the overall cost of Windows Mobile10 smartphones will be comparable to entry-level Android phones.Meanwhile, Allwinner will develop and offer total system solutions to support the development of cost-effective 4G LTE-enabled connected tablets based on Qualcomm's Snapdragon family CPU products. Allwinner's 4G solutions are for production of high-end tablets for mature market in the US and Europe, while the 3G solutions are for tablets targeting emerging markets.

Taiwan large-size (9-inch and above) TFT LCD panel shipments totaled 57.93 million in the second quarter of 2015, down 3.7% on quarter and down 14.2% on year. The decline represents the third consecutive quarter where makers saw a sequential decline, according to Digitimes Research.The decline has been prompted by a decline in IT panel demand in addition to Korea makers increasing notebook panel shipments. The makers have also seen monitor panel demand drop due to weak end-market demand coupled with shifts in strategy to focus more on TV panel production.TV panel shipments were the only application that saw an on-quarter increase in the second quarter, rising 2.9%. The percentage is relatively low compared to before due to China makers strengthening TV panel production on 8.5G lines, said Digitimes Research.

Development of the smart lock market has become active in Japan recently. Led by the launch of the 'Akerun' smart lock by Japan-based Photosynth, other vendors including Sony and Denmark-based Poly-Control have also stepped into the segment. Since smart lock systems can also apply to commercial markets such as real estate and the household service sector, the smart lock market in Japan is expected to surpass JPY1 trillion (US$8.05 billion), according to Digitimes Research. Smart locks are automatic entrance/exit control systems utilizing smartphones or tablets to activate door locks. Most systems currently use Bluetooth for communications. The Akerun smart lock is gaining momentum since installation cost of the system is low, while its operation is simple, Digitimes Research noted. To cash in on the emerging trend, Sony has launched its 'Orio Smart Lock' system in cooperation with venture capital firm World Innovation Lab (WiL). The Orio will be more competitive than the Akerun in price since its price is only about half of the Akerun.

Panel makers in Greater China expect to see smartwatch panel shipments achieve a CAGR of 73.2% from 2014-2017 and a CAGR of 46.1% for smart wristbands as they further invest into developing the two applications, according to Digitimes Research.The makers' total shipments for the two segments will reach 52.89 million in 2017, up 287% compared with 2014, to represent a CAGR of 57% over the time period.The makers will benefit from new demand from the applications since they are relatively new to the market, but improvements related to technology and capacity expansion for technologies such as PMOLED and EPD will also make a difference.Digitimes Research also noted that Taiwan makers have plans to expand LTPS TFT LCD and AMOLED production but will remain relatively weak in the market in terms of flexible AMOLED display production, falling behind Korea makers at an estimated three years in developments.

With demand for white-box tablets gradually shrinking and China's brand tablet shipments also performing weaker than expected, China-based touch panel and touch controller IC firms that used to focus on China's tablet market have mostly started shifting parts of their capacities to manufacturing smartphone touch applications or products for high-end industrial control and car electronics. However, it remains uncertain whether these players will be able to profit from the new product lines.Among these original white-box tablet supply chain players, DPT-Touch, after one year of transformation, is currently able to ship one million smartphone touch panels a month, almost the same as the volume for its monthly tablet touch panel shipments. The player's parent company Token Sciences also established a new subsidiary recently, looking to enter the before-market of the car electronics industry using the OGS technology.Silead, which used to focus on supplying touch panel ICs for white-box tablets, has seen its handset touch control IC shipments grow strongly from 3-4 million units a month in early 2015 to over five million units currently. Meanwhile, its tablet touch control IC shipments have slid from over eight million units a month previously to only about seven million units.With white-box tablets' production costs dropping sharply since the second quarter of 2014, most touch panel supply chain players that used to focus on the white-box tablet sector, such as DPT-Touch and Holitech, have stopped taking orders for tablet applications that offer overly low quotes and have turned to the higher-end brand and education tablet markets for orders.However, they have to compete against brand vendors' existing supply chain partners, and the education tablet market typically sees stable shipments but weak growth. This means these players also have to look for other touch panel applications with stronger growth potential.China's smartphone market is reaching saturation, with vendors facing rising pressure from the price competition. Their demand for touch panels has gradually turned from the mainstream GFF technology to the cheaper GG technology. This is prompting these touch panel suppliers to shift more of their capacities to producing smartphone touch applications, and white-box smartphone brand vendors have also become keener on adopting GG touch panels for their overseas shipments.As for the industrial control and car electronics application markets, clients typically have stringent requirements for the panels' durability in rough environments. Traditional resistive and GG touch panel are still competitive in these markets, giving incentives for these white-box touch panel suppliers.The handset, industrial control and car electronics markets may have their respective advantages in either economies of scale or potential for strong growth, but Digitimes Research believes these white-box supply chain players will see challenges trying to make profits quickly from these new product lines. After all, competition in the handset market is already fierce; the GG touch technology is only suitable for entry-level devices shipped to overseas markets; the car electronics market has a high entry barrier in terms of technology, and its suppliers also face high compensation costs for recalled products.

Industry rumors have stated Apple will go back to using G/G touch technology in iPhones due to ongoing production issues with In-Cell touch panels. If this were to occur, the earliest effect wound be in iPhones released in 2016, as the next iPhone, currently being referred to as iPhone 6S, will still use In-Cell technology, according to Digitimes Research.Market observers have recently noted that Apple is in discussions over whether to go back to G/G instead of In-Cell technology for future iPhone devices as the technology is currently struggling with various production bottlenecks that are preventing Apple from adding new features as well as increasing resolutions. As a result, touch panel makers are aiming to create G/G touch panels that would allow Apple to create smartphones similar in thickness to current iPhones equipped with In-Cell touch panels. G/G touch panels may also help Apple develop bezel-free smartphones as In-Cell touch panels reportedly are struggling with touch sensitivity on the edges. Additionally, In-cell touch panels also make it difficult for vendors to pursue higher resolutions including Ultra HD (4K) due to current bottlenecks, the observers said.Digitimes Research also found that TPK in particular is developing new solutions that use a G/G substrate and ITO thin film and has currently reached a thickness of 8.5mm. However, the company believes it can further decrease the size and bring it closer to a thickness of 7.1mm, making TPK a possible alternative candidate over current In-Cell provider Japan Display (JDI).If Apple were to make the move, JDI could potentially incur huge losses since it has been investing heavily into the technology. While it is still not 100% clear what Apple will decide, the company has been impressed with the AMOLED display and G/G touch panel sensitivity and features found in the Apple Watch. Supply chains also told Digitimes Research that Apple believes its supply chain could be more simplified if it were to use G/G panels, as it would cut down on overall production time.While Apple is now considering this new arrangement the company will not be able to use the G/G technology in the upcoming iPhone 6S since production plans for the device have already been established for quite some time, making 2016 a much more likely time-frame, added Digitimes Research.