Metal mesh technology has entered mass production at some China-based touch panel makers, such as O-film, since the second half of 2013. It helped O-film become the largest notebook touch panel supplier in the world in the fourth quarter of 2013, thanks to its pricing advantages. Lenovo was one of the early adopters of metal mesh touch panels for its notebooks.Following its sucess in the notebook market, O-film is looking to expand into the 8- to 10-inch medium-size segment in 2014. But Digitimes Research believes the metal mesh sector will have to step up efforts defending its stronghold at the 13- to 15.6-inch segment against traditional GFF applications starting from the second quarter of 2014, as ITO films' pricing has been dropping and resistance issues have also been improving.ITO film's high resistance has prevented GFF touch panels from entering the 13-inch and above segment, while costs of OGS touch panels are too high.The major drawback of metal mesh touch panels is that users are able to see the internal touch sensor on screen, but such an issue is not much of a problem for larger-size applications and therefore the technology has been considered the most suitable solution for large-size applications, such as touchscreen notebooks and all-in-one PCs.China-based makers, such as O-film, started mass producing related touch panels in the second half of 2013 and have been gradually expanding their shares in the notebook touch panel market. However, Taiwan players, such as TPK, which originally expected demand for OGS-based notebook touch panels to pick up, have suffered losses and reduced the related capacity to minimize the damage.Having resolved the problem with touch sensor visibility of metal mesh technology, O-film is looking to expand into the 8- to 10-inch tablet touch panel market in 2014 and enter Samsung Electronics' supply chain. However, initially, O-film will mainly supply touch panels for Intel-based white-box tablets.Meanwhile, Japan-based Fujifilm has been reducing the price of its metal mesh touch sensors, which are shipped mainly to touch panel makers, such as Taiwan-based Young Fast and China-based Eely, for their production catering to first-tier vendors including NEC and Dell. In the future, the Japan-based maker may become a strong competitor of O-film vying for Samsung's orders.ITO film makers, such as Japan-based Nitto Denko, have cut their ITO film prices down from an average of CNY300 per square meter originally to only CNY200 recently, with films' resistance values having also been reduced from 150-200Ohm/square to 100Ohm/square. The improvements have enabled ITO films specifically for 13- to 15.6-inch notebook touch panels and the films are already available in the market.Although GFF technology is still unable to match metal mesh technology in the 13- to 15.6-inch large-size touch panel segment in terms of material costs, limited metal mesh-based touch panel supplies and GFF technology's high yield rate thanks to its relatively mature manufacturing process may turn some downstream vendors to adopt GFF technology instead.For the medium-size segment, where ITO films' resistance is almost not an issue, GFF technology has advantages over metal mesh technology in terms of material costs, hindering metal mesh's expansion into the medium-size segment.

The production value of Taiwan's IC testing and packaging industry is expected to grow 5.9% in 2014, higher than the 4.9% growth posted a year earlier, as well as the 4.2% growth projected for the global IC backend industry in 2014, according to Digitimes Research.The production value generated by Taiwan's IC backend service companies reached US$14.01 billion in 2013 compared to NT$13.36 billion a year earlier, said Digitimes Research. In 2013, the global IC testing and packaging industry grew by 3.5%.Efforts by Advanced Semiconductor Engineering (ASE) and Siliconware Precision Industries (SPIL) to ramp up their bumping, flip chip (FC), wafer-level package (WLP) and SiP packaging capacity have allowed them to cash in on the fast growth of the global smartphone and tablet markets, commented Digitimes Research.With the global IC inventory having already dropped to an 8-quarter low of US$15.88 billion in the fourth quarter of 2013 and falling further in the first quarter of 2014, major chipset suppliers are likely to begin to replenish their inventories in the second quarter of 2014, which will fuel the growth of Taiwan's IC backend service companies.

Global leaders in the sapphire industry, in attempts to return to profits from losses incurred in 2012-2013, will focus on increasing utilization rates rather than expand capacities in 2014. Therefore, the global sapphire capacity in 2014 will be approximately the same as that in 2013, Digitimes Research estimates.Korea-based STC is the globally largest sapphire maker with a monthly capacity of 1.37 million mm, followed by US-based Rubicon Technology and Russia-based Monocrystal (each with one million mm), China-based Harbin Aurora Optoelectronics Technology (500,000-600,000mm), Taiwan-based USI Optronics (400,000-500,000mm) and Taiwan-based Tera Xtal Technology (200,000mm), according to Digitimes Research.

The LCD TV panel surface area shipped in 2014 is expected to rise 8.7% on year as demand for TVs is expected to increase and the average TV panel-size increases, according to Digitimes Research.LCD TV panel demand was weak in the first quarter of 2014 as TV vendors aimed to clear out inventories, but is expected to grow 8% in the following quarter as vendors prepare to release new units.The increase in the second quarter will also help stabilize pricing for LCD TV panels, said Digitimes Research.Increased shipments of larger-size units will be the result of increased demand for Ultra HD TVs, most of which are expected to be 39.5-inch and above.

Depleting energy sources, climatic changes and rising power prices have highlighted the importance of energy savings and carbon reductions, and consequently, efforts have been made to optimize efficiency of energy use for buildings or factories. In line with the trend, the Tatung Group has been active in developing smart building/factory solutions to help users maintain an eco-friendly environment.Given growing expectations for factories and buildings to optimize energy efficiency through better monitoring of their facilities, demand for smart building/factory solutions is on the rise.Smart buildings/factories are crucial to corporation sustainable operations as well as overall environment. Pursuit of such goals will not seize until zero carbon emission is achieved, according to Liang Wen-jinn, general manager for SCADA Division under Tatung Co.Tatung, as former construction company, now is approaching centennial. Over the years, tremendous energy has been devoted to develop smart home appliances, energy-saving industrial applications, high-efficiency motors, and high-grade safety cables. Also, Tatung possesses comprehensive deployments in the solar and LED sectors, and boasts strong experience in providing automation services as well as undertaking massive projects. Moreover, software development resources has grown and become one of Tatung's strength as well. Its recent projects for the luxury property market have also been well-received, attesting to Tatung's achievements in the smart building/factory sector. Enabled by a strong integration of group resources and technologies, Tatung offers comprehensive solutions.The core of smart buildings/factories: The SCADA systemSCADA systems are crucial parts of smart building/factory solutions, Liang pointed out. Some users have equipped specific facilities with variable-frequency drives to save energy, but this is not sufficient because optimal energy-saving solutions rely on integrated energy consumption control based on data concerning power consumption of air conditioning, lighting, security control, etc., Liang explained. For example, control on valves of ventilation systems in addition to reducing load of air-conditioning chillers can enhance efficiency of energy use.Tatung has provided central monitoring services for state-run Taiwan Power Company, China Steel, water companies, food manufacturers, automakers, universities, colleges and public facilities for nearly 20 years. However, such previous services focused on maintaining regular operation and monitoring abnormal conditions. But Tatung has now integrated such monitoring services with smart energy-saving innovations to form smart SCADA systems.Smart energy saving enabled by Tatung Group synergyAn integration of its energy-saving equipment, safety materials and SCADA system software has allowed Tatung to provide smart building/factory solutions for various users in recent years.For example, Tatung helped an optoelectronics firm set up a rooftop PV system that also sheltered its facilities from the summer sun, which lowered indoor temperatures, as well as load for the chillers. In addition, based on analysis of production capacity and operation data on the four chillers collected by the SCADA system, it was found that three chillers were enough to attain the heat-dissipation target in fall and winter, and therefore a chiller was left idle to save energy by 25% during the colder months. Besides, the data enabled to the firm to determine the best time for running the manufacturing process, and its rescheduled production capitalized on off-peak power supply, saving its total electricity cost by 10%.Based on production data and information from the equipment monitoring, the optoelectronics firm was able to detect equipment wear and undertake precautionary maintenance to eliminate possible disruption to production. This allowed it to attain the goals of smart maintenance and smart manufacturing.According to Sun Yung-Fu, manager for SCADA Division under Tatung, a local courthouse has adopted a Tatung-developed SCADA system in combination with sensors to monitor air conditioning, lighting, power supply, fire prevention, entrance control and CCTV. The system automatically switches on and off facilities based on actual demand. It also forms a smart interconnected system to cope with emergency. For example, when a fire alarm sounds, the system swiftly locates the spot of the fire via the CCTV, and then switches on the emergency lights, eases all entrance control, and opens the gates to the parking lots.As the development of smart building/factory solutions is an endless pursuit, Tatung will keep optimizing its solutions in terms of content and design for different environments, Liang stressed. Most firms in the electronics sector have installed SCADA systems and some of them have begun collecting and analyzing data to enable the designs of energy-saving solutions, Liang indicated. In contrast, although some in the conventional manufacturing industries have adopted energy-saving measures, their efficacies are limited due to a lack of energy consumption data. Customized SCADA systems can help them significantly increase energy savings, Liang said.Taiwan and other parts of the world have been increasingly keen to track carbon footprints. Companies have to rely on SCADA systems to obtain objective data on carbon emissions so that they devise ways to meet stringent government rules and regulations, as well as strict requirements of their clients. Tatung is ready to do its utmost to help clients overcome these challenges.Liang Wen-jinn, general manager for SCADA Division, indicates that Tatung has developed various smart building/factory solutions by integrating its energy-saving equipment, safety materials and SCADA system software.

With most of the China-based panel makers aggressively eyeing the high-resolution small- to medium-size panel market but lacking experience, Digitimes Research believes that in 2014, China's LTPS small-to-medium-size panels will still mainly be on the HD level. However, in 2015, FHD shipments should start picking up. Whether China makers will be able to mass produce WQHD products in 2016 depends on their technological developments.China-based BOE, Tianma Microelectronics and China Star Optoelectronics Technology (CSOT) were the main players at the FPD China 2014 show in Shanghai, China. CSOT mainly showcased its large-size panel products, while BOE and Tianma had their emphases on small- to medium-size ones.Although BOE and Tianma have hown great ambition in developing high-resolution small- to medium-size panels, they still need to improve their immature mass production processes.BOE is mainly pushing the Ultra PPI feature for its small- to medium-size panels and the three panels it showcased at FPD China were: a 6-inch WQHD (2,560 by 1,440) panel, and two FHD (1,920 by 1,080) panels - one 5-inch and the 5.5-inch. They were all samples from pilot production and mass production for them have yet to begin.Tianma showcased its latest innovation in WQHD-based product lines: LTPS TFT-LCD, AMOLED and embedded touch panels. The maker has already started mass producing WQHD LTPS TFT LCD panels, but the volume remains low due to immature production technologies. Its AMOLED panels, which were also displayed at the show, are still at their lab development stage.China makers have started producing WQHD products, but a lack of related experience has resulted in low yield rates and unstable production, and it will take some time for them to overcome the issues, Digitimes Research believes.

March average retail price for 7W LED light bulbs (equivalent to 40W incandescent ones) in the China market slipped 11.0% sequentially to CNY33.9 (US$5.5), while 9W models (equivalent to 60W incandescent ones) saw a 2.9% decline to CNY44.0, according to Digitimes Research.Average retail prices for 40W- and 60W-equivalent LED light bulbs in the Japan market in March stood at JPY1,643 (US$16) and JPY2,596 respectively, with the former rising on month by 0.6% and the latter by 6.1%, Digitimes Research indicated.March average retail prices for 40W- and 60W-equivalent LED light bulbs in other markets are: KRW14,540 (US$13.6, flat on month) and KRW16,124 (down 0.3%) in South Korea; US$21.8 (up 8.5%) and US$22.0 (down 1.3%) in the US; EUR13.4 (US$18.5, down 2.9%) and EUR15.2 (down 13.1%) in Europe.Osram 40W- and 60W-equivalent LED light bulbs available in South Korea had the highest average lumen-price ratios of 69.6lm/US$ and 113.1lm/US$ respectively in March. In terms of luminous efficiency, Toshiba 40W- and 60W-equivalent LED light bulbs for sale in Japan had the highest average levels of 74.6lm/W and 97.4lm/W respectively.

In March, global top-5 notebook brand vendors and top-3 ODMs both achieved an over 25% on-month shipment growth due to February's weak shipments caused by inventory adjustments, orders for new products and end of support of Windows XP in early April, according to Digitimes Research's figures.Toshiba, Hewlett-Packard (HP), Lenovo and Acer all achieved over 30% on-month notebook shipment growth in March. Toshiba had over 40% on-month growth for its notebook shipments in March because of new product launches and extra orders for trying to fill in the gap created by Sony's leaving that market.HP shipped over three million notebooks in March, while Dell's shipments in the past three months were all weaker than those in the previous year. Lenovo was the second-largest vendor, trailing HP by 300,000-500,000 units in February and March.Wistron enjoyed an almost 40% on-month growth in March, while Quanta Computer and Compal Electronics both had over 25% on-month growth.As for Samsung Electronics, which has turned conservative about the notebook industry, the company is planning to ship 6.3 million notebooks in 2014 with three million units being Chromebooks. Samsung will see a 70% on-year growth for its Chromebooks in 2014.

Among global top-7 PC brand vendors, only Apple (sixth place) still outsources its tablet orders mainly to Taiwan-based EMS providers and ODMs, while the rest - Lenovo, Hewlett-Packard (HP), Dell, Acer, Asustek Computer and Toshiba - have gradually shifted their entry-level tablet design and manufacturing to China-based makers. Their actions are expected to impact Taiwan-based makers' share in global tablet shipments in 2014.Lenovo and HP were the earliest vendors that started cooperating with China-based ODMs. In 2013, Lenovo manufactured most of its tablets in house, but the China-based vendor's entry-level A1000 was outsourced to China-based smartphone ODM Shenzhen Huaqin Technology and accounted for almost one third of Lenovo's tablet shipments in the year.However, because Lenovo's mid-range and high-end Yoga tablets have been enjoying strong demand in 2014, Digitimes Research expects production of these Yoga tablets to occupy the company's in-house capacities for entry-level tablets and force Lenovo to outsource more to China-based ODMs.In early 2013, through its white-box application processor (AP) partner Rockchip, HP cooperated with China-based ODM BYD for its tablet devices. Although initially BYD had several issues such as a lack of system integration abilities, poor quality of components from upstream partners and unstable shipping schedules, most of the issues have already been improved with supprt from HP and Rockchip. The improvements also have attracted orders from Toshiba.Although HP has not placed orders with Rockchip in 2014, its partnership with BYD has grown tighter with outsourcing of its new Nvidia and Marvell-based tablets.On the other hand, starting in the second half of 2013, Intel has treated BYD as an important partner for the tablet market and has been helping it build up its manpower and technology strength. Intel is also offering price cuts for its processors and marketing subsidies to attract brand vendors to use solutions from China players and has successfully attracted Dell and HP to develop Android on x86 tablets.Dell's new Android tablets for 2014 are expected to adopt Intel processors and be outsourced to BYD for production.Seeing entry-level tablets' ASP dropping constantly, Taiwan-based brand vendors, which did not consider outsourcing their tablet production to China makers in 2013, started evaluating the option in early 2014 with Acer being the most aggressive. In January, Acer outsourced its 7-inch Iconia One 7 to China-based 3NOD for both the manufacturing and design. Although Acer only placed limited orders and is selling the device mainly in China, the move has shown the vendor the feasibility of outsourcing to China makers. Acer has now also outsourced its new mainstream 7-inch and 7.85-inch tablets to China makers.After losing its chance to cooperate with Google for next-generation Nexus tablets, Asustek, to make up for losses in shipments to the mid-range and high-end market segments, reportedly may partner with China-based makers to strengthen its competitiveness in the entry-level market.Samsung Electronics and Lenovo, which mainly manufacture their tablets in house, were expanding their presence in the tablet market during 2013, reducing Taiwan ODMs' combined share in total tablet shipments from over 80% in 2012 to only 66.3%.Since the top-6 PC brand vendors' shipments account for 17.5% of the global tablet shipments (including the Nexus 7), Taiwan's shipment share may drop below 60% if the vendors give all their entry-level tablet orders to China makers.

The China government has lowered its rare earths export quotas for 2014 by 30% compared to 2013 after the actual export volume last year was lower than its original estimates. Prices of cerium, yttrium and terbium oxide (rare earths used in LED production) dropped 38.1%, 0% and 41.3% on year, respectively, in March and even more compared to their peaks in 2012, indicating that the pricing pressure for LED-use fluorescent powders have already started to ease. The US, the EU and Japan together filed an appeal to World Trade Organization (WTO) in 2012 claiming China's restrictions for rare earths exports violated WTO's regulations. WTO's ruled in favor of the complainants on March 26, 2014. Despite the victory in the WTO ruling, the complainants have been seeking ways to reduce their reliance on China's rare earths, since China has tried to use rate earths as bargaining chips in its military and diplomatic negotiations with other countries. Japan, which has been the biggest importer of China's rare earths, has been seeking alternative sources, such as imports from Australia. Japan has invested in India's rare earth production and has been looking for materials that can replace rare earths. With China's dominance in the rare earths market starting to wane, rare earths prices have also been affected, Digitimes Research has observed.