Amazon announced its first own-brand smartphone, the Fire on June 18, 2014. Digitimes Research has commented that Amazon has not set the smartphone's price low to boost competition, and the device's hardware specifications are also not considered very high-end. Some special features of the smartphone are Dynamic Perspective and Firefly. Through the combination of Firefly and Amazon's Prime member services, Digitimes Research believes Amazon is trying to change user habits and drive more online shopping.The strategy is expected to help expand Amazon's e-commerce business and eventually reach a goal that users are able to purchase anything through Amazon's e-commerce platform, but such a move could impact channel retailers, which still rely on physical stores.The Fire adopts Qualcomm's quad-core Snapdragon 800 processors, a 4.7-inch HD display, 2GB of RAM, and a 13-megapixel rear and 2-megapixel front camera. The smartphone also has four ultra-low power specialized cameras and four infrared LEDs at the front to detect motion and provide information for the Dynamic Perspective function.Compared to Amazon's previously released Kindle products, which mainly push their entry-level pricing, the Fire smartphone's price after bundling with telecom services, is still at a very similar range to Apple, Samsung and HTC's high-end smartphones, which implies that the Fire smartphone's hardware price-performance ratio is not very strong.The Dynamic Perspective feature that the Fire smartphone is pushing is expected to bring a visual effect and usage experience that is completely different from before, but for most consumers, the feature is not compelling enough to replace their existing smartphone.Since Amazon's digital content services are also available on other platforms and other vendors' devices, Digitimes Research said the Fire smartphone will have limited attraction to most existing smartphone users, and will have trouble achieving outstanding sales in the US, a market that has already been highly penetrated by smartphones.Digitimes Research believes Amazon's release of the Fire smartphone is not meant to compete against other vendors' flagship products in the market, and its initial targets are customer groups that have a high reliance on Amazon's website.To change consumers' offline shopping habits, the smartphone's free US$99-value one-year Prime membership, free 2-day shipping and Firefly function, which allows users to identify products via the camera, are expected to build up the habit of quickly connecting to Amazon's e-commerce platform with their Fire smartphone to shop online, promoting an offline-to-online business model, and snatching business opportunities away from physical retailers.

Qualcomm, a leading player in terms of LTE technologies, started supplying LTE solutions to markets worldwide including China in 2013. But because of regulations and issues over licensing issues, China's LTE service started later than most of the developed countries. At the same time, restrictions from the China-dedveloped TD-SCDMA standard and policies over multi-mode support also limited the number of chipmakers who were able to enter China's LTE chip supply chain initially. Qualcomm is the biggest supplier of China's LTE chip market, of which it is expected to take over 80% in the first half of 2014. Qualcomm is currently pushing its Snapdragon 400 series as the mainstream platform for the LTE market and because of the series' friendly pricing and strong performance/function balance, the platform has achieved high popularity in the market. Qualcomm is set to release its entry-level 64-bit Snapdragon 410 series in the third quarter of 2014, looking to accelerate shipment growths. As for Marvell, the company released its LTE solutions at the same time as Qualcomm, but limited by its business scale and supporting personnel, Marvell has been unable to offer a technology support as competitive as Qualcomm's, while component costs for its solutions are also higher. It has a lot less clients than Qualcomm. Despite the fact that Marvell and Qualcomm both released their LTE solutions at about the same time, Marvell's LTE chip shipments have been a lot weaker than those of Qualcomm. Meanwhile, MediaTek continues to achieve growth in 3G-related chip markets. The chipmaker's quad-core and eight-core products are achieving rapid growth in the second quarter and have become the main revenue contributors. Although MediaTek has already developed independent LTE baseband chips and released related solutions to the market, demand for the solutions is limited and significant shipments are unlikely until the third quarter. However, by then, the entry-level market, where MediaTek has a strong presence, may have already been occupied by Qualcomm's 32-bit and 64-bit solutions and MediaTek is likely to be forced to offer same-spec-but-cheaper solutions to compete for orders, Digitimes Research believes. As for the high-end segment, MediaTek currently still lacks plans for 64-bit products. MediaTek's high-end 32-bit MT6595 is able to outrace Qualcomm's Snapdragon 801/805 in terms of performance, but for the 64-bit product line, MediaTek currently still has nothing to compete against Qualcomm's upcoming 64-bit 808/810 series.

Global SSD sales are expected to grow 60% on year in 2014 after nearly doubling a year earlier, buoyed by continually declining NAND flash prices, slimming-down of notebooks, and the rise of convertible tablets, according to Digitimes Research.SSD products with a storage capacity of 60GB were the mainstream in 2012, but shipments of 120GB and 240GB models began gaining momentum in 2013, buoyed by falling prices. By 2014, 240GB models have become the mainstream, while the roll-out of 480GB devices is likely to drive a new round of shipment growth, said Digitimes Research.Prices of TB-grade SSDs in 2014 are comparable to 480/512GB SSDs available in 2013. But the quotes for TB-grade SSDs are expected to drop further using TLC NAND flash.Marvell Technology and JMicron both have launched new SSD controller chips for 2014 featuring improved performance and reliability, while SandForce is ready to release its new SSD controller chips.Intel has recently launched its new series of chipsets that feature native support for M.2 SSDs, which is likely to encourage other memory storage firms to roll out related SSDs in the second half of 2014. M.2 SSDs support both PCIe and SATA interfaces and have a strong possibility of replacing 2.5-inch SATA SSDs, Digitimes Research commented.

Semiconductor capital spending by Samsung Electronics has topped the world's semiconductor companies for the fourth straight year since 2010. In 2014, Samsung's semiconductor capex is expected to stay flat at US$11.5 billion as compared to the previous year. However, since Samsung plans to begin install production equipment at its Line-17 fab in Hwaseong, Gyeonggi Province, its semiconductor capex in the second half of 2014 will be higher than that in the first half, according to Digitimes Research.Having already set up seven semiconductor production lines in its plants in Hwaseong and Xian, China, the Hwaseong plant will aim to migrate to more advanced process nodes in 2014, while the Xian plant will focus on ramping up its vertical-NAND (V-NAND) flash capacity. The Line-17 fab, which is slated for completion in the second half of 2014, will focus on offering wafer foundry services using 20nm and below processes, Digitimes Research said.Meanwhile, SK Hynix's capex for 2014 is expected to reach US$3.3-3.8 billion, up from US$3.3 billion a year earlier. SK Hynix' main capex for 2014 will be used to build its M14 fab. Construction of the M14 line is expected to begin in mid-2014.Capital spending of other semiconductor companies, including Micron Technology, Toshiba and SanDisk will also top US$1.0 billion each in 2014. Micron is expected to accelerate the migration of its DRAM production to 20nm process, while also ramping up its NAND flash capacity.Toshiba will team up with SanDisk to expand the production capacity of V-NAND flash at its plant in Yokkaichi.For non-memory chips, the 2014 capex of Intel, Taiwan Semiconductor Manufacturing Company (TSMC), Globalfoundries and United Microelectronics Corporation (UMC) will also exceed US$1 billion each. While Intel will deepen its development of 14nm and below processes, TSMC will focus on 16nm FinFET process. Globalfoundries and UMC will raise the ratios of their 28nm production,while beginning to develop 20nm and below technologies.Combined 2014 capital spending of these semiconductor firms with a capex budget of over US$1 billion in the year is expected to amount to US$49.3 billion, Digitimes Research estimates.The top-three DRAM chipmakers will move to upgrade their processes to 25-21nm, while the NAND flash industry will stress on ramping V-NAND flash production as well as to migrate to 19-16nm processes.

Photoimageable ink is not easy to process; issues over through hole filling result in extra processing time and low yield rates. The biggest problem that has been troubling flexible printed circuit board (FPCB) makers for many years concerns through hole filling. The technological issue has hindered Taiwan FPCB makers' advancement to the high-end precision FPCB market segment.If Taiwan-based FPCB makers want to enter this market segment - which is dominated by Japan-based FPCB makers and covers applications ranging from hard disk drives (HDDs), printers, precision medical instruments and aerospace control devices - they must overcome the technological challenge of through hole filling.There are several keys to achieving success in the process. First, FPCB ink must be high-quality and easy to coat over the FPCB, which will enhance its softness and flexibility. The mask also needs to seep into the through holes to form a protection layer there. Second, FPCB makers must have the expertise to employ either the screen printing or roller coating coverlay process; otherwise there will be a high chance of seeing products of poor quality. Third, production efficiency must be high; without an efficient production, the output scale and production schedule will both be stranded.Advanced material R&D companies in the US and Japan, which are pioneers in the FPCB industry and have a large portion of the global FPCB market, now use lamination to solve problems faced with the through-hole filling process. Using this type of solution can shorten the time for manufacturing FPCBs, reduce material cost by one-third and significantly increase yield rates and production efficiency.Germany-based TMT GMBH specializes in making high-precision FPCBs used in high-end medical devices and equipment. As traditional photoimageable ink's manufacturing processes may cause solvent pollution and face low production yield rates, TMT, which had been eager to find an eco-friendly replacement, has already started using Taiwan-based TeamChem Material Company's photoimageable coverlay (PIC) to replace photoimageable ink.TeamChem develops PIC to replace traditional photoimageable inkFPC coverlays are meant to overlay and protect the fine circuits, giving them flexibility and sheltering them from damage by temperatures, humidity, pollutants and erosive substances. Coverlay development has so far resulted in three types: the dry-film coverlay, screen-printing coverlay and photoimageable coverlay (PIC).Dry-film and screen-printing coverlays generally involve low yield rates, high costs, imprecision and poor flexibility, and more importantly, these solutions do not thoroughly address the quality issue of through hole filling. PICs are technologically more advanced than the other types and can more precisely locate the position for soldering on FPCBs, making it a superior solution for precise soldering for the creation of fine-pitch circuits and an even coating thickness. PIC is used to fill through holes by lamination instead of a coating with ductile solder mask ink. Taiwan-based TeamChem Materials Company started investing in PIC production and R&D in 2012. Now the company has started mass production of PIC and sold them to Europe.The importance of PIC for the FPCB industryPICs are important because they can change the FPCB production model as well as the FPCB industry ecosystem by giving Taiwan-based FPCB makers the opportunity to compete against Japan- and US-based makers in the high-end precision FPCB market. TeamChem Materials Company, headquartered in Taoyuan, northern Taiwan, in early 2012 decided to step into development and production of PICs with a goal of resolving issues associated with Japan- and US-produced PICs, such as implementation difficulties, high equipment costs, time-consuming manufacturing processes, and high unit prices. TeamChem Materials chairman Todd Yeh points out that the company wants to provide a type of PIC that is based on a low-temperature manufacturing process utilizing FPCD makers' existing equipment, with a low level below NT$500 (US17.1) per square meter.TeamChem Materials Company is now able to mass produce and supply its PICs. R&D personnel at some FPCB makers in Shenzhen and Xiamen, China are already testing TeamChem's coverlays on their FPCBS for communication antennae and light bars used in tablets and smartphones. Commenting on PICs' future development, some R&D engineers at FPCB makers have pointed out that traditional FPCB production requires 11 steps - micro-etching the circuit, pre-tacking, lamination, baking, hole punching, sandblasting, applying photoimageable solder masks, pre-baking, exposure, developing and baking again. With TeamChem Materials' new PICs, the process can be reduced to only five steps - micro-etching the circuit, lamination, exposure, developing and baking – and can be quickly laminated through vacuum laminators to save time and personnel costs and greatly increase their competitiveness in obtaining OEM/ODM orders.TeamChem PIC R&D focuses on ease of useTeamChem Materials is the first Taiwan-based maker to have successfully developed ductile solder masks specifically for use in FPCBs and has been known for supplying the most flexible mask to FPCB makers. It has been working with various handset FPCB makers to develop specialty ink, and has also identified key problems FPCB makers face using PICs. PICs currently used by FPCB makers are usually expensive, and there are problems such as the coverlay's excessively high lamination temperatures, which could create excessive stress and deform the FPCB, or create bubbles during lamination when the material is not ductile enough. These problems form an obstacle to improving yield rates and reducing production costs.There are other problems, such as: poor image development, which could fail to leave a clear land pattern on the FPC; and material absorption during the back-end electroless nickel immersion gold (ENIG) and gold plating processes due to weak chemical resistance. These problems have prevented PIC use from becoming popular among Taiwan-based FPCB makers who are inexperienced in handling such processes. TeamChem Materials chairman Todd Yeh points out that the company has many years of experience working with major FPCB makers and has for many times developed special inks exclusively for certain FPCB clients. TeamChem believes that its initiative to start PIC R&D and production will create a win-win model for itself and FPCB makers. FPCB makers can provide specification requirements and product samples, and the FPCB solder mask expert TeamChem Materials will be happy to work with them.TeamChem PIC can replace PI coverlayTeamChem PIC comply with enviromental regulation

Panel makers are eyeing wearable device business opportunities, as the market for other panel applications continues to mature and demand remains limited, according to Digitimes Research.Display applications have become mature in the market but wearable device solutions such as smart watches are just emerging in addition to new demand for large-size products in niche markets.Glasses-free 3D display technology is continuing to slightly emerge as as Ultra HD solutions for TVs in addition to notebooks, but markets are currently limited, added Digitimes Research.

The ratio of 3G/4G subscribers to total mobile phone users in Southeast Asia remains relatively low despite the fact that most countries in the region have already set up their 3G networks, while some cities in Singapore and Malaysia have begun offering 4G services, according to Digitimes Research.In Singapore, Malaysia and Thailand, where the population totals 140 million, the penetration rate of 3G/4G handsets tops over 50%. But the penetration rate dips to below 20% in Indonesia, the Philippines and Vietnam where the combined population of the three countries totals 400 million.While 2G/3G models still dominate the entire Southeast Asia market, the growing number of 3G subscribers indicates that there will be a vast replacement demand for transitioning from feature phones to smartphones, said Digitimes Research.Singapore began to implement 4G services in 2012 and now enjoys a high penetration rate of 3G/4G phones in the region, with smartphones priced at over US$500 accounting for the majority of models available in the market. Although Thailand just began to offer commercial 3G services in May 2013, the 3G penetration rate in the country is currently the second-highest in the region. Shipments of smartphones in Thailand are expected to grow 30% in 2014 despite the impact of the recent political upheaval.Malaysia developed its 3G networks quite early, with some cities beginning to offer 4G services in 2013. Entry-level and mid-range smartphones priced at US$100-500 are the main models available currently, said Digitimes Research.

Digital products are rapidly penetrating into the modern lifestyle, bringing various forms of convenience, but in a sense also increasing the distance between people because even when people are together, they are often respectively sliding their fingers on the mobile phones' touchscreens with their heads lowered. Behind our highly-efficient lifestyles, is there a hidden crisis of alienation between people? Elo Touch Solutions (Elo Touch Solutions Taiwan, hereinafter referred to as Elo) OEM Business Division Vice President Niklas Fallgren remarked during Computex that with touch-controlled products becoming more user-friendly, digital technologies will help tighten relationships between people and strengthen interaction between people as well. Very soon, we will see how touch-controlled products transform the face of traditional industries.According to Fallgren, Elo has been developing touch solutions for over 40 years. Before smartphones became widespread, touch technologies were already being applied in areas such as industrial automation and transportation logistics. With the rise of touch-controlled consumer products, high-end commercial touch-screen products are accelerating their penetration into traditional service industries, and consumers are experiencing the benefits of upgraded services in the banking, medical, healthcare, hotel and retail industries.Many people believe that the rise of the Internet will result in the decline of traditional industries. For example, online stores are backed up by rich online resources and it is extremely convenient for consumers to communicate with customer service personnel online. On the other hand, brick-and-mortar sales channels are restricted by the slow passing of information in traditional marketing models, and seem to be no match for the speed and convenience of online price comparisons. Furthermore, professional sales personnel are hard to find and even harder to keep. They require a great deal of training, which takes a long time. The quality of services is difficult to control, exposing these brick-and-mortar stores to threats from online stores. Fallgren, on the other hand, thinks that traditional industries should turn more active and use digital technologies to their advantage. Sales personnel should be given tablet computers that are connected to the Internet, giving them the ability to quickly obtain online information. That will bring the online shopping experience to brick-and-mortar channels, allowing further interaction and enhancing service quality.Fallgren picked up a tablet computer and threw it onto the ground! He noted that this is not only at gadget for entertainment, but also a mobile POS device with a comprehensive set of features. This seemingly clunky tablet computer includes features required by the general retail industry, such as the ability to scan product barcodes as well as process credit card transactions. By upgrading the equipment in retail stores, truly smart shopping experiences can be achieved.Fallgren stressed that touch-control is an extraordinary technology. In terms of the industrial application of touch-control products, most people may think of the built-in entertainment equipment and control systems in cars, or the various types of automation equipment at production lines. However, Elo's touch solutions also span across the banking, healthcare, hotel, and retail industries, making it even faster and even more convenient for patients to register at hospitals. X-ray images as well as image files from various other types of tests can be seamlessly transferred between different departments via touch-controlled devices and cloud databases.In order to meet the needs of our enterprise customers, Elo's zero-bezel touch solutions include surface acoustic wave, five-wire resistive, as well as the newly introduced PCAP touch screens, supporting Apple's Mac, Google's Android, Open Linux, as well as Microsoft's Windows operating systems, which is why this solution is already being widely used in POI systems for public navigational guide equipment, bank ATMs, gaming and gambling equipment, POS management systems, voting machines, medical equipment, as well as automation equipment in various industries. Its clients include Abbot Laboratories in the medical industry, Hong Kong Harbor City in the retail industry and MGM Macau in the casino industry.According to Fallgren, in medical devices alone, the incorporation of touch technologies is growing at an annual rate of 18%. It is anticipated that other touch-controlled equipment, such as interactive digital billboards and retail self-service machines, will also be widespreading. Touch-enabled life is not only a part of the plots in Iron Man movies; smart interactive technologies in touch-controlled systems are already surrounding us in our everyday lives.Elo Touch Solutions OEM Business Division Vice President Niklas Fallgren

As labor costs in China are gradually rising, IT players have started turning to establish production lines in Vietnam, increasing the country's demand for upstream semiconductors and components. The scale of South Korea's semiconductor and component exports to Vietnam has grown significantly recently, which is benefiting South Korea's overall exports to Vietnam.In 2012, Vietnam surpassed Indonesia and Taiwan and became South Korea's sixth-largest export country. For IT product exports, Vietnam was the fourth-largest in 2013, surpassing Japan and Singapore.Semiconductor products accounted for 40.6% of South Korea and Vietnam's IT product trades in 2013, and with the addition of passive components and LCD displays, 70.3% of South Korea's IT product exports to Vietnam were semiconductors and components. These exports were mainly supplied to local IT plants.South Korea's semiconductor exports to Vietnam have turned strong and have been growing since 2010 thanks to Samsung Electronics' handset plants in Vietnam, which started operations in 2009. With Samsung continuing to expand its capacity in Vietnam, export volume and value are both expected to grow higher each year in the future, according to Digitimes Research.

There were 1,917 MOCVD sets in operation globally in May 2014 and Taiwan-based LED makers accounted for 28.6% of the number, followed by Japan-based makers with 23.8%, China-based makers with 22.9%, and South Korea-based makers with 14.1%, according to Digitimes Research.Of the MOCVD sets, those used to produce sapphire wafers had a total monthly capacity of 888,290 4-inch wafers of which Taiwan-based makers accounted for 44.5%, China-based makers 34.2% and South Korea-based makers 19%, Digitimes Research indicated.Sapphire ingot makers will have a total monthly production capacity of 7.39 million mm in 2104, with 770,600mm suitable for being sliced into 4-inch wafers.International prices for 2-inch sapphire ingots stood at US$4.5/mm in the first quarter of 2014 and are expected to rise to US$4.5-5/mm in the second half of 2014, while those for 4-inch ingots will increase from over US$16/mm in the second quarter to over US$17/mm in the second half.