China-based vendors shipped 101.7 million smartphones in the second quarter of 2014, increasing 24.6% on quarter, according to Digitimes Research.Xiaomi Technology, Huawei Device and Coolpad were the three largest vendors shipping 14.8 million, 13.5 million and 10.1 million units respectively, Digitimes Research indicated.Of the shipments, 37.8 million units were shipped in overseas markets, rising by 10.2 million units on quarter. TCL Communication Technology, Huawei and ZTE were the three largest vendors overseas.As many vendors have put off launching 4G smartphones from the second quarter to the third, large demand for smartphones in the China market is expected in the second half of 2014.In addition to TCL and ZTE, Huawei, Xiaomi and Lenovo have been enhancing overseas marketing, and overseas markets may account for 40% of China-based vendors' total smartphone shipments in the second half of 2014.China-based vendors will ship 412 million smartphones in 2014, growing 30.5% on year.

Taiwan-based makers together shipped 351.4 million small- to medium-size TFT-LCD panels in the second quarter of 2014, increasing 16.8% sequentially but decreasing 2.8% on year, according to Digitimes Research.In particular, shipments of panels for handsets rose 17.9% sequentially and took up 75.3% of total shipments, up 0.7ppt from the previous quarter, Digitimes Research indicated. Shipments of car-use panels also grew on quarter due to increased orders from Japan-based automakers.LTPS panels accounted for 11.5% of total shipments, up 0.5ppt on quarter.As Taiwan-based makers have modified large-size panel manufacturing equipment for producing small- to medium-size applications and have not added LTPS production capacities, they may face issues in making in mid-range and high-end panels.

There were 103 million smartphone APs (application processors) shipped in the China market in the second quarter of 2014, increasing 13.2% on quarter and 11.5% on year, according to Digitimes Research.Taiwan-based MediaTek was the largest IC design house accounting for 52.4% of the shipments, followed by Qualcomm with 21.4%, Spreadtrum Communications 9.7%, HiSilicon Technologies 5.3%, Marvell 4.4%, Leadcore Technology 2.9% and Nvidia 2.4%, Digitimes Research indicated.MediaTek and Qualcomm saw second-quarter shipments rise 8% and 18.9% sequentially, while Spreadtrum saw a drop of 4.8%.In terms of core architecture, Cortex-A7 accounted for 63% of shipments, Cortex-A9 for 17.5% and Cortex-A5 10%.

Ability Enterprise, Altek, Foxconn Electronics and Asia Optical together shipped 3.78 million digital cameras in the second quarter of 2014, hiking 43.3% on quarter, according to Digitimes Research.Ability was the largest ODM accounting for over 70% of the shipments,Digitimes Research's latest quarterly report on DSC shipments indicated. Of Ability's second-quarter shipments, 29.4% went to Sony.Among Taiwan-based ODMs' clients, orders from Samsung Electronics grew the largest on quarter, followed by Sony and Panasonic.Global digital camera shipments in 2014 are likely to drop on year by 24% and Taiwan-based ODMs' total shipments may slip by 34%.

There will be 107.6 million smartphone AP (application processor) shipped in the China market in the third quarter of 2014 and 113.5 million units in the fourth one, increasing on quarter by 4.5% and 5.5% respectively mainly due to increasing demand for LTE (4G) smartphones, according to Digitimes Research.Taiwan-based MediaTek will be the largest vendor, followed by Qualcomm, Spreadtrum Communications, HiSilicon Technologies, Leadcore Technology, Marvell and Nvidia, Digitimes Research indicated.

Taiwan-based makers shipped 67.518 million large-size (9-inch and above) TFT-LCD panels in the second quarter of 2014, increasing by 8.5% on quarter and by 0.9% on year, according to Digitimes Research.Most of the major application saw double-digit growth in shipmnts in the second-quarter, Digitimes Research indicated.Global Ultra HD TV panel shipments grew 154% sequentially in the second quarter. The top-two suppliers, Taiwan-based Innolux and Korea-based LG Display, both shipped about 1.5 million UHD TV panels during the quarter.

Japan's Ministry of Economy, Trade and Industry has been boosting the development of service robots, with a target production value of JPY2.65 trillion (US$26.1 billion) and target production of 9.4 million robots specifically for use in health and medical care in 2025, according to Digitimes Research.The robots will meet demand in Japan where the birth rate remains low and the elderly population is increasing, which is expected to result in a lack of personnel in the nursing segment.Robots are currently used mainly in Japan's industrial segment but by 2025 the service market will surpass it to represent a JPY2.65 trillion market compared to the JPY1.58 trillion of the industrial segment, according to statistics from Japan's New Energy and Industrial Technology Development Organization.The robots will primarily be used for for logistics, security, health and medical care, added Digitimes Research.

Since the implementation of China's 12th Five Year Plan in 2011, the country's semiconductor industry has shown a steady yearly revenue growth from CNY179.61 billion (US$29 billion) in 2010 to CNY240.8 billion in 2013, representing a compound annual growth rate (CAGR) of 10.2%, thanks to a steep rise in sales of entry-level and mid-range smartphones, in addition to the continued expansion in foundry and assembly house production capacity.This growth rate compares favorably with the global semiconductor industry annual growth rate of less than 5% each year from 2011 to 2013, with 2012 even registering a negative growth rate of -2.7%, due to lower-than-expected end market demand and inventory adjustments.Based on the assumption that 2014 will see better global economic prospects than 2013 and the shipment of mobile devices including entry-level and mid-range smartphones and tablets will be able to maintain a momentum of double-digit percentage growth, Digitimes Research estimates that revenues of the China semiconductor industry are likely to increase to CNY267.37 billion in 2014, an annual growth rate of 11% from 2013 and a compound annual growth rate of 10.5% from 2010, which far surpasses the CAGR of 1.7% of the global semiconductor industry in the same period.However, the goal of CNY350 billion for the China semiconductor industry in 2015, laid out by China's State Council in the "National Semiconductor Industry Development Guidelines" promulgated on June 24, 2014, may be out of reach.In response to this challenge, the State Council published guidelines to strengthen government support for China's semiconductor industry, including expanding tax benefits mentioned in the State Council Document 4 (2011) for IC design houses and foundries to testing firms. The central government also plans to set up a national industry investment fund of CNY120 billion. The fund will mainly focus on investing in the construction of advanced process capacity, semiconductor firm reorganization, and mergers.About DIGITIMES ResearchDIGITIMES 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.

Xiaomi Technology ranked first in smartphone shipments in the China market among China-based vendors in the first half of 2014, but will see growth in shipments gradually slow down mainly because other vendors started using online marketing in the second quarter and have launched or will launch models with high performance-price ratios for sale at CNY799-999 (US$129-161), according to Digitimes Research.Hongmi and Xiaomi smartphones both use MIUI operating system, so consumers feel no difference in terms of usage experience and prefer Hongmi, which is cheaper, as a result. This will cause an imbalance in Xiaomi's high-end and entry-level smartphone shipments.With other China-based smartphone vendors also joining the online channel competition in the second quarter and pricing their models at CNY799-999, Xiaomi will maintain its shipments in the short terms because of its strong brand recognition, but will see its shipments weakening in the long term as their products all share similar specificitons, added Digitimes Research.

Following its aggressive investments in 8.5G production lines, China Star Optoelectronics Technology (CSOT) has become the largest supplier of 32-inch panels worldwide. The company has also established a joint venture with the government of Wuhan, China, through which CSOT will officially enter the small-to-medium-size panel application market using the joint venture's 6G LTPS/AMOLED production lines.CSOT has already begun trial production of AMOLED panels, and by 2016 is expected to start mass producing the technology. The company's AMOLED production facilities will contribute to a total of 10 overall AMOLED production lines in China that will go into production or have already begun production from 2014-2016.China panel makers continue to receive financial assistance both from the central government in China as well as from many local governments to develop AMOLED panel facilities. The makers are also receiving various bank loans, subsidies and plentiful access to state property in China, and are making efforts to use talent from Taiwan and Korea to develop the AMOLED panel industry.Despite China makers' efforts to establish AMOLED facilities through 2016, Digitimes Research believes they will face high production costs and low yields, making the technology less competitive in terms of pricing compared to TFT LCD technology, and limiting the influence China makers will have in the segment in the short term.