Buoyed by back-to-school demand, global notebook shipments are expected to grow 4.3% sequentially in the third quarter of 2014 before taking a dive of 1.1% in the fourth quarter, according to Digitimes Research.In August and September 2014 vendors are expected to release new units and will hold promotional events to push sales which in addition to US$249 units from Microsoft will push up shipments during the third quarter.The 4.3% increase in the third quarter will bring the ratio of overall notebook shipments to 48.7 in the first half of the year and 51.3 in the second half, said Digitimes Research.Hewlett-Packard (HP) is expected to maintain a strong hold in the enterprise and education segments while Acer expects to see 30% on-year growth in the second half of 2014.In terms of ODMs, Compal Electronics is expected to surpass Quanta Computer in the second half and the two makers are expected to hold a combined 70% share in the fourth quarter, added Digitimes Research.

Facing a funding shortage for local IC manufacturers, the China State Council in June 2014 published guidelines to strengthen government support for China's semiconductor industry, while stating the short-, mid-, and long-term goals for the related industry supply chains through 2030. In order to examine and analyze these policy revisions, Digitimes Research has published a Special Report that examines how the revised central government guidelines and various local government policy implementations will affect China's semiconductor manufacturing, IC design, packaging & testing and materials industry. The new government guidelines, titled "National Integrated Circuit Industry Development Guidelines," continue to affirm the tax benefits mentioned in the State Council Document 4 (2011) for IC design houses and foundries, but the tax benefits have expanded to testing firms. This means testing firms will now also enjoy benefits on corporate income, value-added, and operation taxes. The central government also plans to set up a national industry investment fund of CNY120 billion (US$19.3 billion). The fund will mainly focus on investing in the construction of advanced process capacity, semiconductor firm reorganization, and mergers. Digitimes Research believes through the investment fund support, China will increase its capabilities for advanced processes on 12-inch wafers. In addition, there will be more China-based semiconductor firms merging and more acquisitions of international firms by China-based firms. The Special Report is priced at NT$42,750 (approx. US$1,500). Purchase the report Table of Contents Introduction     Current status of China semiconductor industry        Chart 1: China semiconductor industry output, 2009-2014 (CNYb)        Chart 2: China semiconductor self-sufficiency rate, 2009-2015 (CNYb)     IC design industry in China        Chart 3: China IC design industry output, 2009-2014 (CNYb)        Chart 4: Taiwan and China IC design industry output, 2009-2014 (US$m)        Table 1: Top-10 China IC design companies by revenues, 2010-2013     Consolidation and partnerships since 2012        Chart 5: Consolidation and joint ventures have become the trend in China's semi industry Central and local government support     Central government        Table 2: Government support in the second part of 12th Five-Year Plan        Chart 6: Central government support policies in the latter part of the 12th Five Year Plan     Local government        Chart 7: Local government support policies in the latter part of the 12th Five Year Plan Central Government policy analysis     Description and guidelines for 02 Project of 2014        Chart 8: In 2014, the 02 Project shifted IC fab subsidies upstream to the materials industry     Ministry of Industry and Information Technology's four major goals        Chart 9: Four major policy goals of MIIT to support semiconductor industry     National Integrated Circuit Industry Development Guidelines        Policy goals        Chart 10: NICIDG guidelines have goals laid out for semi industry through 2030        Key development goals        Table 3: China semiconductor industry sub-sector goals as planned out in NICIDG        Primary growth and support policies        Table 4: NICIDG growth and support policies for the semiconductor industry        CNY120 billion investment fund to be established        Chart 11: Semiconductor industry growth and support fund details Local government support     Beijing City Government        Chart 12: Beijing City Government policy-based support for the semiconductor industry     Shandong Provincial Government        Chart 13: Shandong Province policy-based support for the semiconductor industry     Wuhan City Government        Chart 14: Top-10 China cities for semiconductor output value, 2012-2013 (CNYb)        Chart 15: Wuhan City Government policy-based support for the semiconductor industry     Hefei City Government        Chart 16: Hefei City Government policy-based support for the semiconductor industry     Tianjin City Government        Chart 17: Tianjin City Government policy-based support for the semiconductor industry     Shenzhen City Government        Chart 18: Shenzhen City Government policy-based support for the semiconductor industry     Shanghai City Government        Chart 19: Shanghai City Government policy-based support for the semiconductor industry Conclusion     Chart 20: Supportive policies from NSID Summary for China's semiconductor industry     Industry development in the 12th Five Year Plan        Chart 21: Using equity funds to purchase shares become a major support policy for China        Chart 22: Development goals in the latter part of the 12th and the 13th Five-Year PlanAbout DIGITIMES Research DIGITIMES Research is the research arm of DIGITIMES Inc., Taiwan's leading high-tech media outlet. Operating as an independent business unit, DIGITIMES Research focuses on monitoring key high-tech industries, while also guiding clients toward suitable new businesses. Digitimes provides market intelligence and analysis to more than 1000 corporate customers worldwide. Research and consulting services including a full range of products, from in-depth Special Reports on industry trends in the flat panel display (FPD), LED, and semiconductor industries, to Tracker services that monitor the global mobile device supply chain on a quarterly basis. Media contact: Michael McManus (michael.mcmanus@digitimes.com)

Samsung Electronics recently launched the 8.4- and 10.5-inch AMOLED-based Galaxy Tab S flagship tablets. Although the new Galaxy Tab S tablets feature specifications exceeding those of Apple's iPads, the series is still unlikely to boost Samsung's sales in the second half of 2014 as demand in the high-end tablet market is gradually approaching saturation, according to Digitimes Research.Competition in the 8- and 10-ich segments has increased while the tablet market is maturing and becoming increasingly saturated. The recent Samsung tablets have also already made use of all the specialized features accessible from Android.Regardless, the Galaxy S 8.4-inch tablet is expected to outcompete the iPad mini in the second half of 2014 due to its advanced Super AMOLED panel technology, lighter weight as a result of no backlight unit as well as larger vieiwng area, added Digitimes Research.

In June 2014, the digital home industry saw several developments worth noting. Google-owned Nest Labs released a new smart home API that is open to iOS and Android developers. Digitimes Research believes the new platform will open up cross partnerships across the digital home industry as well as bring increased advantages to end-user products.Additionally, Aereo's over-the-air (OTA) TV services over the Internet was ruled illegal by the US Supreme Court. Aereo is trying to appeal the ruling with claims it is a traditional cable company and that such services are legitimate.Samsung Electronics meanwhile launched its Multi Power TV services geared towards Africa-based users in order to further establish its TV services and ecosystem throughout emerging economies in the continent, added Digitimes Research.

China's Ministry of Industry and Information Technology has issued two FD-LTE pilot operation licenses to China Unicom and China Telecom on June 27 for several cities in China. However, China Mobile, which is most aggressive about FD/TD-LTE dual-mode network technology was excluded, showing that the China government is trying to control the telecom market from being dominated by one player throgh the license distributing.By the end of May 2014, China Mobile had added 8.1 million users to its 4G services and China Unicom saw a 22% decrease in new 3G users. This follows developments in China during 2013 when China Mobile held 81% of profits out of the three major telecom providers in China, prompting concern that China Mobile's presence would dominate even further into the following year.Digitimes Research, however, believes the China ministry's move will help push forth the LTE standard into the market, which will cause changes in regards to how much providers dominate the market as well as vendor-telecom cooperation.

Google has recently announced its new wearable device platform, Google Fit, which is expected to change the business model for wearable devices to horizontal partnerships with different industries with its hardware/software integration and connectivity, according to Digitimes Research.Google Fit provides advantages for hardware makers because it will allow them to rely on third-party apps rather than having to develop their own in-house software. The technology however is not yet associated with the medical/health segments most likely due to safety/security concerns. But that is expected to change as improvements are made as Google extends its reach with partners within those segments.The medical/health segments are expected to be a major niche for Google to further tackle in the future. With increased safety coupled with connectivity through mobile devices, Google is expected to revamp its presence in those segments as well as similar services related to Google Health platform, which failed to take off and make a large presence in the market, leading to an end in services back in 2011.Developments in Android meanwhile are also a top priority for Google to ensure increased safety with Google Fit and therefore increased trust and expanded business opportunities in the medical/health segments, said Digitimes Research.

The on-cell touchscreen technology led by US-based touch control IC maker Synaptics and China-based Focaltech have accumulated total unit shipments of one million since the beginning of the technology's mass production in October 2013.Panel makers have gradually conquered low yield problems, but Digitimes Research believes that most vendors' unwillingness to try out new technology plus difficulties to significantly reduce thickness prior to the end of 2014, will limit the technology from becoming suitable for high-end smartphones.Chunghwa Picture Tubes (CPT) was the earliest maker to start mass producing on-cell touch panels. Its first client was China-based CoolPad with touch control ICs supplied by Focaltech. Meanwhile, Synaptics is cooperating with Innolux to supply panels to Nokia.Prior to the end of the first quarter 2014, only CPT had achieved shipments of one million on-cell touch panels and the volume was considered quite good an emerging technology.HannStar started mass production of on-cell touch panels in May 2014, using color filter production lines from its subsidiary HannsTouch Solution. HannStar supplies panels to ZTE with estimated shipments of 700,000 units per month.Although shipments are considered quite good for an emerging technology, compared to original expectations of on-cell touch panels seriously threatening traditional touch panel makers, in the second half of 2013, performance is still far from satisfactory.Despite panel makers' improvements in management of the on-cell technology's manufacturing process, most handset vendors still have barriers towards adopting emerging technology.More importantly, if an on-cell touch panel adopts single-layer multi-touch technology, the panel's size and resolution are both small, limiting its applications at sub-5-inch and WVGA-level products.At the same time, pinholes on the surface of the glass can easily expand during the glass thinning process and reduce yield rates; therefore most on-cell touch panels are not being thinned.As a result, lacking sufficient resolution and thinness, Digitimes Research estimates that on-cell touch panels are unlikely to be a match for traditional touchscreen technologies such as GFF prior to the end of 2014.

Global notebook shipments dropped 4.9% on year in the second quarter of 2014, according to Digitimes Research. Despite the end of Windows XP bringing about a surge of notebook orders, panels and some key components were in limited supply, and demand in China and South and Central America was down, resulting in the sequential decline.Despite the decline, Hewlett-Packard (HP) saw 19.1% on-year growth in the second quarter as it capped on business opportunities prior to the discontinuation of Windows XP coupled with aggressive strategies in gaining shipments in the education segment from as early as the second half of 2013. Acer meanwhile reported 31.3% sequential growth during the second quarter as retail partners adjusted their inventories and the vendor released new units.In terms of OEMs, the two largest makers held a 61% share in shipments. Additionally, Wistron saw 13.3% sequential growth while Inventec and Pegatron both saw less than three million units shipped each, added Digitimes Research.

Korea plans to invest KRW323 billion (US$320 million) in R&D to ramp up the production value of its power management ICs (PWM ICs) to US$10 billion by 2022 with a 14% global market share, according to Digitimes Research.Under Korea's Ministry of Trade, Industry and Energy (MOTIE), the government has mapped out a plan to develop high-efficiency power supplies and related technologies for PWM ICs, with participants including Samsung Electronics and LS Industrial Systems.The PWM IC development project will also focus on two major segments: market-oriented applications and core technologies, with a R&D budget of KRW195 billion and KRW100 billion, allocated for the two sectors respectively.Development of electric car applications under the market-oriented sector alone will account for KRW78 billion.For the core technologies, the project will call for developments of related technologies and components for insulated gate bipolar transistors (IGBT) and metal-oxide semiconductor field-effect transistors (MOSFET).

Japan's Ultra HD TV channel, Channel4K, started pilot broadcast on June 2, 2014 and Digitimes Research has found that sales of Ultra HD TV sets continue to enjoy stable growth despite a recent rise in the country's consumption tax. In May 2014, 2.4% of TVs sold in the Japan market were Ultra HD models, which also made up 12.3% of overall sales value, the first time that the percentage has surpassed 10%.In terms of sizes, 50-inch and above models accounted for 20.2% of Japan's overall TV shipments and 36.5% of overall TV sales value in May, growing significantly from the same month a year ago.Pricing is the key driver for Japan's Ultra HD TV sales. Japan's Ultra HD TV ASPs in May dropped 32.8% on year to only JPY330,000 (US$3,256).Among Japan-based TV vendors, Panasonic and Toshiba sell their TVs for prices lower than their competitions from Sony and Sharp in the Japan market. The difference in pricing strategies also meant a difference in market shares: Both Panasonic and Toshiba enjoyed increased shares in the Japan TV market while Sony and Sharp suffered decreased shares. It shows that pricing is a major factor behind Japan consumers' choosing Ultra HD TV models.So far, in Japan only Sharp's Aquos 4K TU-UD1000 TV recorder is natively equipped with an Ultra HD tuner and therefore, only a limited number of Japan families with Ultra HD TVs are able to view Ultra HD content and the broadcasting system will not be completed until players such as Sony starts investing in the Ultra HD tuner development.However, the production of Ultra HD content is a more serious issue.With cable TV content producers lacking interests in making Ultra HD programs, creating Ultra HD content has become a task for paid TV program providers such as J:COM. However, without cable TV content producers joining the industry, it remains to be seen whether the Ultra HD TV channel will be able to satisfy demand from consumers when it officially launches in 2016. In addition, the extra costs that Japan consumers need to pay TV program providers are also expected to reduce consumers' willingness to subscribe to the TV channel, Digitimes Research believes.