Japan's home entertainment segment saw several developments in the second quarter of 2015. Sharp introduced a mix of new Ultra HD (4K) TVs, including Aquos 4K Next that can upscale to 8K resolution, according to Digitimes Research.4K TV sales in Japan increased about 20% on year in May 2015. The penetration for 4K used in 50-inch and above size units increased to 47.2%, and Sony in particular expects 4K TV sales to most likely make up about half of its TV business in 2015.4K TVs in the Japan market have reached a 30% share of overall LCD TV sales during certain months, and the 50-inch and above size proportion has climbed from 40% in previous months. The nation is at the forefront of pushing 4K transmissions and is expected to be one of the first to make 8K readily available. 4K TVs are expected to hold a 13% share of global LCD TV sales in 2015.Panel makers aim to tackle the 8K market starting 2018 when Japan will offer various channel transmissions in 8K, and the World Cup is held in Russia. Demand will continue to grow around 2020 when major sporting events will be held in Japan, according to Digitimes Research.Sharp will play a major role in supplying 8K panels in the future and will use 10G facilities to produce the technology, while BOE aims to do so at its 10.5G fabs, with an emphasis on 98- and 82-inch units. LG Display meanwhile is currently looking to production of 55- and 98-inch units. Sharp's Aquos 4K Next featuring Aquos Quattron technology is part of Sharp's strategy to gain a foothold in both the 4K and 8K markets, Digitimes Research believes.Digitimes Research believes in addition to TV applications, 8K displays will also be used for public and industrial displays, art galleries and museums, public speaking areas, traffic control operations, specialized monitors and medical applications.

Despite Taiwan makers lagging behind Korea and Japan in TFT LCD and AMOLED panel technologies, the makers have advantages for producing PMOLED and EPD products used in wearable devices.According to Digitimes Research, Taiwan makers have a number of old fabs that have been converted to producing the two technologies, and have been strengthening their R&D efforts for use in smartwatches and smart wristbands.China makers on the other hand have focused on TFT LCD expansion while Korea makers are pushing AMOLED. Taiwan makers such as AU Optronics (AUO) are pushing LTPS TFT LCD and AMOLED efforts but are relatively behind, and need other technologies to compete in the wearables segment.Chunghwa Picture Tubes (CPT) and HannStar Display meanwhile are promoting Open Cell products to white-box wearable vendors in China in a bid to maintain their presence in the segment, Digitimes Research found.In terms of EPD solutions, these are mainly used in niche products and Hydis will continue to act as the main producer of the technology while also pushing PMOLED solutions.

An international LED forum held in Taiwan in mid-June showed that makers have extended development and production from general lighting to IR (infrared), UV (ultraviolet) chips, and high-end automotive lighting, according to Digitimes Research.Taiwan-based Epistar has become the globally largest IR LED maker, Digitimes Research indicated. Epistar-developed dual-junction high-power IR LED chips can increase recognizing distance at night and are mainly used in nighttime security surveillance. Epistar has developed low-power IR LED chips with wavelength of 1,550nm for use in measuring blood glucose. Low-power IR LED chips can be used in smartphones to recognize iris for personal identification.For development of UV LED, Taiwan-based makers currently focus on UV-A (320-410nm in wavelength) LED and lag behind international vendors in more advanced UV-C (200-275nm) LED.

Despite the fact that the design is complete and the chip is ready for mass production, Intel's 28nm SoFIA 4G application processor (AP) is still unlikely to be launched until the beginning of 2016 due to the adjustments over the software part that is still not yet mature. For 2015, Intel will still need to rely on its SoFIA 3G/3G-R APs to prop up is mobile device AP business and may miss the business opportunities from the 4G market, which is expected to grow rapidly in the second half of this year.Intel may face an even more problematic issue in 2016 as its 14nm SoFIA product line is already planned for late-2016 and could overlap with the 28nm one from early 2016 and affect each other's demand.Intel currently only has solutions that pair an independent XMM baseband with an Atom AP for its 4G product lineup, but the solutions are unattractive to players in China due to its high prices. Intel has been working on integrating two chips into an SoC for its SoFIA product line since the end of 2014 to improve the BOM, Digitimes Research noted.With the SoFIA 4G - which was originally scheduled for 2015 - being delayed until early 2016 and Intel only being able to provide baseband+AP solutions for 4G demand in 2015, the CPU giant may find it difficult to persuade clients to use its solutions for their 4G devices due to the high prices and its subsidies for using its solutions are unlikely to provide much persuasion.Intel's second-generation SoFIA 4G AP, based on a 14nm process, will become available in late-2016 and could put the first-generation SoFIA 4G AP based on a Taiwan Semiconductor Manufacturing Company's (TSMC) 28nm process, in an awkward position and cause the 28nm AP to have an over-short lifecycle. Although Intel may offer cheap prices for the 28nm SoFIA 4G AP and push the 14nm one to the high-end market sector to create a boundary, the CPU giant will still see its profit impacted and its marketing for the processors will also be limited.

US-based Cree will spend US$85 million to restructure its LED device business through reducing total production capacity for LED chips. The move is mainly due to negative impact price competition from China-based LED makers, according to Digitimes Research.Cree will reduce LED production capacity by merging two LED factories in North Carolina, and two LED factories in China, and aims to hike its utilization rate to 80-90% in fiscal 2016 (July 2015-June 2016), Digitimes Research indicated.Cree focuses LED production on high-power LED chips used in LED street lamps and commercial LED lighting products. However, with capacity expansion by China-based LED makers, mid-power LED chips are increasingly being adopted for LED street lamps, and mid- and low-power chips for commercial LED lighting, resulting in shrinking demand for high-power LED chips. To cope with the situation, Cree will increase outsourcing of low- and mid-power LED chips.

During a survey of southern China's white-box tablet supply chain recently, Digitimes Research found that Intel will not be able to supply its Cherry Trail-based solutions to white-box players until the end of the third quarter. Most white-box players will only be able to use Bay Trail-T CR solutions for their Windows 10 tablets, reducing these devices' attractiveness to consumers.Digitimes Research believes only specific white-box players that have landed orders from US channel retailers for the holiday season, will be able to profit by releasing ultra-cheap Windows 10 tablets using their advantages in economies of scale.Overall tablet shipments continue to decline in the second quarter and Windows tablets, which had strong performance in the first quarter due to subsidies from Wintel and dual-operating system (OS) designs, started experiencing weakening sales in the second quarter. Only large-size Windows 2-in-1 devices (mostly 10.1-inch) still see good demand in the quarter.Inexpensive Wi-Fi-only tablets and tablets with phone functionality are also suffering from decreasing shipments in the second quarter due to seasonality and competition from inexpensive large-size smartphones.However, the 10.1-inch tablet has become a new favorite of white-box players because they are optimistic about demand for large-size 2-in-1 products; 10.1-inch display prices have been dropping rapidly since early 2015 and Microsoft's newest OEM licensing gives 10.1-inch products the most favorable pricing and the least specification restrictions.Digitimes Research estimates that 10.1-inch models currently account for almost 50% of overall white-box Windows tablet shipments, boosting the size's share in overall tablet shipments to 15%.Although the tablet market is expected to benefit from Windows 10's release in the third quarter, white-box players will only be able to release Windows 10 tablets using the existing Bay Trail-T CR solution in the quarter because Intel's Cherry Trail reference design will not become available until the end of September and its other cheaper Cherry Trail solutions will come even later.To compensate from drawbacks in the hardware, white-box players are planning to offer their Bay Trail-T CR-based Windows 10 tablets at a cheaper price level and will push them mainly for the year-end holidays in the retail channel of Western countries.In addition to a 7-inch Android tablet, Alco Electronics' orders from Walmart for the year-end holidays in 2015 are expected to include a 10.1-inch Windows 10 2-in-1 device, designed by China-based Yidong. The 2-in-1 device is expected to ship one million units and be priced below US$149.

Panel makers aim to tackle the 8K market starting 2018 when Japan will offer various channel transmissions in 8K, and the World Cup is held in Russia. Demand will continue to grow around 2020 when major sporting events will be held in Japan, according to Digitimes Research.Makers such as BOE and Sharp have so far shown some of the most active development in 8K panels, despite that 4K TVs are expected to hold over just a 13% share of global LCD TV sales in 2015.4K TVs in the Japan market, however, currently hold over a 30% share of overall LCD TV sales in the nation, with 50-inch and above size units accounting for over 40%. The nation is at the forefront of pushing 4K transmissions and is expected to be one of the first to make 8K readily available.Sharp will play a major role in supplying 8K panels in the future and will use 10G facilities to produce the technology, while BOE aims to do so at its 10.5G fabs, with an emphasis on 98- and 82-inch units. LG Display meanwhile is currently looking to production of 55- and 98-inch units.Digitimes Research believes in addition to TV applications, 8K displays will also be used for public and industrial displays, art galleries and museums, public speaking areas, traffic control operations, specialized monitors and medical applications.

Combined revenues of South Korea's major display driver IC companies – Silicon Works, Lucid Display Technology (LDT), Technology Leaders and Innovators (TLI) and Clover Hitech – fell 6.1% to KRW313.7 billion (US$284 million) in 2014, down for a second straight year, according to Digitimes Research.Sales of Silicon Works' LCD driver IC (LDI) business also fell for the second straight year in 2014. Silicon Works' LDI revenues, which peaked at KRW378.9 billion in 2012, declined to KRW322.6 billion in 2013 and dropped further to KRW305.3 billion in 2014, said Digitimes Research. A slowdown in iPad sales growth led to the revenue decreases.Silicon Works' LDI revenues in 2014 lagged behind fellow Taiwan-based LCD driver IC firms Novatek Microelectronics and Himax Technologies, but were ahead of ILi Technology (Ilitek), FocalTech Systems and Raydium Semiconductor. In terms of operating margins, Silicon Works' ranking moved to the second position among the six vendors in 2014, Digitimes Research indicated.Silicon works may see its revenues expand as a result of its entry into the IC backend market, Digitimes Research noted. However, Silicon Works will likely suffer operating margin decreases despite the revenue growth.

The rapid expansion in demand for premium PC hardware from the enthusiast and overclocking segments has given hardware vendors a much needed opportunity to bolster declining sales in the mainstream consumer space. But while related players have all enjoyed some gains from their efforts to design and market products primarily for overclockers, the main winners so far have been the chip providers. In first-quarter 2015 the cost of the CPU and graphics card accounted for over 66% of the EUR1050 (US$1151) cost of a typical overclocking system, according to the latest quarterly report from HWinsights.In first-quarter 2015, the cost breakdown of a typical overclocking system was EUR330 (31%) for the CPU, EUR365 (35%) graphics card, EUR150 (14%) motherboard, EUR75 (7%) RAM, and EUR130 (12%) PSU, HWinsights noted.For high-end systems the cost of the CPU alone accounted for 42% of the total system price, making Intel, which enjoys an enthusiast PC market share of 78%, the major beneficiary of the overclocking boom."In the years we have been tracking the market, we have seen overclocking evolve from originally appealing to budget conscious consumers looking to squeeze out additional performance for their dollar, to the current situation where it represents a premium category that sits at the very top of vendors' price scales," said Pieter-Jan Plaisier, Director, HWBOT. "When leveraged effectively, targeting the overclocking market not only allows vendors to maximize their margins, it also has the effect of adjusting upwards consumer price expectations in other product segments, in particular gaming."A rising tide lifts all boatsThis effect of a premium product helping to push up prices for a vendor's other product lines was recently observed with the introduction of the GeForce GTX Titan series by Nvidia.With an MSRP of $999, the first Titan, released in February 2013, set a new benchmark for the most expensive single-GPU card on the market. As a result, Nvidia's next-generation high-end gaming product, the GeForce GTX 780 was generally regarded as offering a good price/performance ratio, despite the fact it was priced at US$649, compared to US$500 for the previous-generation GeForce GTX 680.HWinsights believes there is opportunity for vendors in other hardware categories to push the price envelope if they are willing to challenge consumer expectations with more value-added features and new innovations.However, to be successful vendors cannot simply expect the market to settle for higher numbers for existing features, HWinsights warned. Attempts by PSU vendors to woo enthusiasts with 1000W+ models have been largely ignored, the firm noted. Even at the top end of the charts where cost is typically not a concern, data still show a high number of users are still opting for more modestly priced 850W models, HWinsights said. HWinsights: NVIDIA single-GPU card pricing Series Launch MSRP (US$) Launch date GTX 280 649 Jun-08 GTX 285 399 Jan-09 GTX 480 499 Mar-10 GTX 580 499 Nov-10 GTX 680 500 Mar-12 Titan 999 Feb-13 GTX 780 649 May-13 GTX 780 Ti 699 Nov-13 Titan Black 999 Feb-14 GTX 980 549 Sep-14 Titan X 999 Mar-15 GTX 980 Ti 650 Jun-15 Source: HWinsights, compiled by Digitimes, June 2015

The Internet of Things (IoT) has brought multiple applications and new business models for the development of smart home, which in turn may also bring about a take-off for the smart home industry, according to Digitimes Research.Previously, most smart home applications, including audio/video entertainment, security surveillance or home automation, were implemented through vertically integrated business models. However, the rise of IoT applications will contribute to the formation of the DIY smart home market and expand the coverage to include energy saving and home care.Smart home services could also offer more value-added services by optimizing IoT applications at more affordable prices, Digitimes Research noted.However, current equipment, chips, operating platforms, wireless technology, and related services for smart homes vary from platform to platform, causing confusion among consumers when they are purchasing equipment, Digitimes Research commented.