Thursday, June 30, 2011

Asustek optimistic about performance in China

Asustek Computer, at a product launch conference in China, pointed out that notebook demand in the China market was weak in the second quarter, but as the IT market will enter the peak season in the third quarter, demand is expected to rise, but inflation problems in China may still have some impact on demand, according to company CFO David Chang.

Asustek's share in China's notebook market in 2010 was about 13% and will reach 15% in 2011. After 2011, the company expects its market share will rise 1pp per year, Chang noted.

Although market watchers are turning conservative toward notebook demand in the second half, Chang pointed out that the company has no plans to reduce its shipment target. Asustek shipped about 5.9 million notebooks in the first half and should have no problem achieving its goal of shipping 14 million units in 2011. The company also shipped more than 400,000 tablet PCs in the first half and should be able to reach its goal of two million units for 2011.

After July, Asustek is set to launch its low-price Eee PC X101 netbook, pairing Intel's Atom 435 processor with MeeGo operating system for a price of US$199, while Windows 7 models will be priced at US$310-350. In September, Asustek will also launch netbooks using Intel's latest Cedar Trail-M platform with its annual netbook shipments target still set at six million units.

In September, Asustek will also launch its UX21 with two screen size options, 11.6-inch and 13-inch, using Intel's Ultrabook concept. Intel estimates that its Ultrabook concept will be adopted for 40% of global consumer notebooks at the end of 2012, with Asustek also estimating that its UX series will account for 3-5% of its total notebook shipments in 2012.

In additional news, Acer's action of dumping notebook inventory in Europe has already caused a drop of 5% in the ASP of notebooks in Europe and Acer is still able to maintain its lead with its strong push in volumes.

Acer reportedly planning to launch slide tablet PC in 4Q11

Acer reportedly plans to launch a slide tablet PC in the fourth quarter of 2011, targeting the year-end holiday season, according to sources from the upstream supply chain.

Acer's new slide tablet PC will adopt a 10-inch touch screen, ARM-based processor and will be manufactured by Compal Electronics, which declined to comment about its clients, noted the sources, adding that estimated shipments for the device are still not available as Acer is currently still in the middle of clearing its notebook inventory and is taking a conservative attitude toward its orders.

Acer has recently reduced its 2011 tablet PC shipment forecast from 5-7 million units to only 2.5-3 million units, and with more Android-based tablet PCs to start appearing in the second half of 2011, most of non-Apple tablet PC vendors' estimated shipments are overoptimistic, the sources added

Wednesday, June 29, 2011

Marvell TD-SCDMA single-chip solution adopted by ZTE for smartphones and tablet

Marvell has announced that the four new TD-SCDMA devices by ZTE, including two smartphones, a mobile tablet and a mobile hot spot device, all feature its TD-SCDMA single chip solutions designed to deliver high performance processing, dynamic multimedia for mobile TV, live video, 3D gaming and many exciting new mobile applications.

The ZTE Blade U880, one of the company's flagship smartphones, Light Tab T9, a 7-inch tablet and A6, a mobile hot spot device customized for TD-SCDMA networks, are powered by the Marvell PXA920, Marvell said. In addition, the sub-CNY1,000 (US$154.70) U802 smartphone is equipped with Marvell's PXA918.

"The ZTE launch is the latest validation of our long-standing strategy to make TD-SCDMA a world-class standard for very affordable smart devices," said Weili Dai, Marvell's co-founder, in a statement. "These exciting new products from ZTE demonstrate the performance advantages and versatility of Marvell's TD-SCDMA solutions and point to a growing momentum for the TD standard in China."

"ZTE aims to ship 12 million units this year, a goal that will make us one of the top three global tablet providers, one of the top five global providers of Android smartphones and the largest provider of smart devices in China," said He Shiyou, executive VP of ZTE, in the same statement.

Tuesday, June 28, 2011

Compal Communications smartphone shipments to be boosted by Nokia orders

Taiwan-based ODM maker Compal Communications shipped only 3.91 million smartphones in 2010 and has downward adjusted 2011 target shipment volume from 6.0 million smartphones to 4.5 million, but stands a chance of shipping 10-15 million smartphones through reliance on Nokia, according to industry sources in Taiwan.

Compal's shipments of Android, WebOS and Windows Phone 7 (WP7) smartphones to Nokia, Motorola, Hewlett-Packard (HP)and Acer in the first quarter of 2011 accounted for 70% of total shipments and 85% of total revenues, the sources indicated.

Compal has relatively strong R&D capabilities among Taiwan-based handset ODM makers as well as supporting resources from the Compal Group, but many ODM orders for smartphones are in too small volumes to reach an economy of scale, the sources said.

As Compal will begin shipping Mango (an update edition of WP7) smartphones to Nokia in the fourth quarter of 2011, Compal is likely to see a large increase in ODM orders from Nokia in 2012 if Mango smartphone models sell well in the global market and Nokia keeps downsizing its in-house R&D staff and strengthen ODM partnership with Compal, the sources analyzed. If so, Compal is expected to obtain orders for Mango smartphones from other vendors as well, such as Acer and LG Electronics, the sources indicated.

Compal has signed with Microsoft for licensed use of the Mango platform and Tango, a platform to succeed Mango, the sources noted.

Intel to continue working on MeeGo, despite Nokia exit

As Nokia's CEO Stephen Elop has recently confirmed that the company will quit its involvement in its co-developed MeeGo software platform with Intel, market watchers are becoming pessimistic toward MeeGo's future, but Intel, on the other hand, is set to continue working on MeeGo with plans already set through to the second quarter of 2012, according to market watchers.

In addition to netbooks and tablet PCs, Intel is ready to launch MeeGo v1.3 with support for smart TVs, car infotainment and multimedia handset devices in the fourth quarter and is set to launch v1.4 in the second quarter of 2012.

Intel will also launch a solution pairing its Atom processor with Google's latest Android system codenamed Ice Cream Sandwich in the first quarter of 2012, while the pairing with Windows 8 will come out as soon as the third quarter of 2012.

Intel has also been expanding its AppUp Center with over one million consumers already having downloaded applications from the store. IT players including Acer, India-based telecom carrier Reliance Communications, Indonesia-based telecom carrier SpeedUp, retailer Evernew, Malaysia-based retailer FOSA, and US-based retailers Awaken and Datavision have all recently announced they will join Intel's AppUp Center shortly.

White-box players supply close to 20% of global tablet PC shipments in 1Q11

White-box tablet PC players are rising quickly in the tablet PC industry with related shipments already accounting for close to 20% of global tablet PC shipments in the first quarter of 2011, according to sources from the upstream supply chain.

The sources pointed out that the white-box players are expanding quickly in emerging markets with their advantage in price. As they are showing an aggressive attitude for cutting into the tablet PC market, the sources believe their existence will become a big threat toward first-tier tablet PC players in the second half of the year.

The sources noted that white-box tablet PC players have been aggressively cutting into the North America market with several brands, such as Zenithink and Anhub, already having their tablet PC products listed under the top-20 besting selling products on Amazon.

Currently, most white-box tablet PCs are adopting 7-inch resistive touch screen panel with VIA Technologies' VIA8650 processor and the Android 2.2 operating system for a price as low as only NT$2,000 (US$69), compared to High Tech Computer's (HTC's) 7-inch Android 2.3-based Flyer tablet PC at NT$17,900. The large price gap allows the white-box models to attract demand from consumers.

Even for the white-box models using thin-film capacitive touch screens, the price only goes as high as NT$5,000, the sources noted.

There are already several Taiwan-based component suppliers aggressively competing in the new market; such as VIA Technologies for CPUs; Transtouch Technology, Emerging Display Technologies (EDT) and Mutto Optronics for touch panels; and First International Computer (FIC), Gigabyte Technology, Elitegroup Computer System (ECS) for assembly, the sources added.

Upstream touch screen IC suppliers such as Egalax-empia Technology (EETI) also plans to cut into white-box tablet PC market in the third quarter with MediaTek and Elan Microelectronics also set to hit the market.

However, since white-box players normally do not send their tablet PC for safety testing, the products can be easily damaged or have a defect, while their safety also raises concerns among consumers.

Acer reducing 3Q11 shipment forecast; company founder optimistic about inventory clearing progress

Upstream component suppliers of Acer have recently been notified by Acer to reduce their inventory preparation for the third quarter as Acer has reduced its notebook shipment forecast from originally 6.4 million units to 5.4 million units, indicating that Acer is still working on digesting its inventories, according to sources at upstream component players.

Commenting on the report, Acer founder Stan Shih pointed out that the company still need some times to get used to the state after the reorganization and he believes that Acer's executives are heading in the right direction. He also asked market watchers and investors to give Acer more time.

Although Acer has reduced its shipment forecast by about 15%, the sources pointed out that the reduced orders are mainly netbooks, accounting for about 80% of the volume.

The sources noted that Acer is expected to ship 1.45-1.5 million notebooks in July and 1.9-2 million units in August with shipments in September to drop only slightly from August, helping the company to complete its inventory clearing by the end of the third quarter.

In addition to the inventory, Acer is also adjusting its operation model from pushing volume to profitability. For netbooks, which is no longer a mainstream product in the IT market, the company will only maintain a certain shipment volume, but will turn its focus toward cloud computing.

Acer shipped a total of 800,000 tablet PCs from the launch of its tablet PC to the end of June, and its new 7-inch model will show up in the third quarter. Acer forecasts it will ship 800,000 tablet PCs in the third quarter, helping it to achieve annual shipments of 2.5-3 million units in 2011.

Monday, June 27, 2011

Asustek to start marketing Atom N435-based Eee PC X101 netbook in July

Asustek Computer will start marketing its low-priced netbook, the Eee PC X101, in July with models running on MeeGo available at US$199 and those running on Windows 7 available at US$310-350, according to industry sources.

The Eee PC X101 is powered by an Intel low-power Atom N435 1.33GHz single-core CPU, the sources noted.

Other branded notebook vendors including Acer, Lenovo and Samsung Electronics also plan to launch Atom N435/MeeGo-based netbooks soon, said the sources, noting that the Atom 435 netbooks released by Asustek and Acer will also support Intel's AppUp Center technology.

Compal lands Dell orders for 10 million business-use notebooks for 2012

aiwan-based ODM Compal Electronics has obtained orders for 10 million business-use notebooks to be delivered in 2012 from Dell, according to industry sources. Compal declined to comment.

Dell placed 2011 orders for 7-8 million business-use notebooks with Compal and 2-3 million units with Foxconn (Hon Hai Precision Industry), but has decided to shift 2012 orders from Foxconn to Compal, the sources said. Compal is expected to account for 90% of Dell's total shipments of business-use notebooks in 2012, the sources indicated.

Compal's main notebook ODM clients will be Acer, Dell, Lenovo and Toshiba, in 2012, the sources noted, adding orders released from Hewlett-Packard and Asustek Computer to Compal are expected to increase from 2011 levels.

Business-use models will be a main source of growth in global notebook demand in the second half of 2011, the sources said, adding Compal expects to ship 48 million notebooks, 3.8 million tablet PCs and eight million LCD TVs in 2011.

Chinesegamer to replace 2/2.5D online games with web games

Chinesegamer International, a developer/operator of online games in Taiwan, will replace 2D and 2.5D online games to be developed in the future with web versions based on cloud computing and concentrate operating resources on 3D online games, according to company president Leu Shyue-sen.

While users of online games have to download software and purchase in-game items to play, web games do not have this requirement, Leu said. Chinesegamer is developing technology to enhance audio and visuals and the performance of web games to make comparable with online games, Leu indicated. These are reasons for replacing 2D and 2.5D online games with web versions to make 2D and 2.5D games more accessible to entry-level players, Leu pointed out.

Chinesegamer will focus on 3D online games as its flagship product line, with web games and mobile games to be auxiliary lines, Leu indicated.

Orders for tablets to account for 3% of TSMC 2011 revenues, says paper

Orders for chips for tablet PCs are likely to contribute only a small percentage to Taiwan Semiconductor Manufacturing Company's (TSMC) consolidated revenues in 2011, and even 2012, the Chinese-language Commercial Times cited a Merrill Lynch analyst as reporting on June 24.

TSMC stands a good chance of winning orders for Apple's A6 processors, the paper quoted Dan Heyler, a semiconductor analyst with Merrill Lynch in Taipei, as indicating. But even if TSMC grabs all Apple's tablet chip orders for 2012, sales generated from the orders will account for only 2% of TSMC's overall sales for the year, Heyler was quoted as saying.

Orders for non-iPad tablet devices are expected to contribute only 3% to TSMC's consolidated revenues in 2011, and 4% in 2012, Heyler said, as cited by the paper.

Apple reportedly continues to contract Samsung Electronics to manufacture its A5 processors, using the foundry's 45nm process, the Commercial Times quoted industry sources as saying in a separate report. One thing for sure is that TSMC will not gain any orders from Apple in 2011, the paper observed.

Previous reports quoted industry estimates saying that orders for smartphones and tablets would generate sales of between US$900 million and US$1 billion in 2011, almost equal to the company's average revenues per month.

TSMC shares closed down 1.8% at NT$72.90 (US$2.52) on the Taiwan Stock Exchange (TSE) on June 24.

Asustek may have difficulty achieving shipments target for 2011, says paper

Asustek Computer, which estimated to ship 20 million notebooks and netbooks combined in 2011, may have difficulty achieving its goal since the company only shipped about 8.5 million units in the first half. Since the notebook industry is expected to only have a shipment proportion of 45:55 for the first and second halves of 2011, Asustek has internally admitted that achieving a shipment growth of 35% in the second half, will be a difficult challenge, according to a Chinese-language Commercial Times report citing sources from Asustek.

Asustek believes that the challenges are mainly coming from the Europe's bond crisis, which is affecting market demand, and Asustek is paying close attention to fluctuations of the euro and the affects on demand in the third quarter, added the paper.

Apple notebook upstream supply chain to run in full gear starting July

Makers in the upstream supply chain for Apple notebook products will run in full gear starting July preparing needed parts and components for the vendor's new MacBook Air models, according to sources in the supply chain. Apple is expected to take deliveries of over eight million MacBook Airs in the third quarter, nearly doubling from the previous quarter, the sources estimated.

Shipments of parts and components for MacBook lineups totaled an equivalent of 2.2-2.4 million MacBooks in June, and orders for July are likely to top 2.7-2.8 million units, said the sources, noting that the increase is in line with Apple's previous strategy to ramp up deliveries prior to the launch of new products.

The sources have also raised the projected shipments of MacBook notebooks for 2011 to 15 million units, compared to 13 million forecast previously.

The new MacBook Air is also expected to feature Apple's new Mac OS X, Lion, and support the Thunderbolt interface, the sources indicated.

Non-iPad tablet vendors likely to launch new Wintel-based models to compete with Apple in 2012

Intel and Microsoft are jointly touting a new Wintel-based platform for tablet PCs, raising hopes among non-iPad tablet PC vendors that they may be able to compete more effectively with Apple in the segment in 2012 with models other than ARM/Android-based products, according to industry sources.

Most non-iPad table PC vendors have been frustrated recently due to lower-than-expected performance of their tablet PCs built with ARM/Android. While attributing the slow sales to the instability of Android and the strong brand image that Apple enjoys, some vendors have also begun mulling new strategies to strengthen their competitiveness.

Knowing the demand from tablet PC vendors, Intel and Microsoft have recently revealed a roadmap for their Wintel platform to production partners, said the sources, noting that the new platform will come with a less than 5W low-power CPU from Intel paired with Microsoft's Windows 8 OS.

While Intel is also expected to lower prices for its new CPUs, tablet PC vendors also hope that the new Wintel platform will help them tackle the compatibility issues found between Android 3.0 and 3.1.

Quanta reportedly wins major mainstream notebook orders for 1H12 from Asustek

Asustek Computer reportedly has completed the distribution of its notebook orders for the first half of 2012, with Quanta Computer likely to win orders for 40% of mainstream notebook models, according to industry sources.

In terms of volume, Quanta and Pegatron Technology will retain 40% each of Asustek's total notebook orders for the first half of 2012, revealed the sources, noting that Compal will take up another 20% of Asustek's mainstream notebook orders for the period.

Asustek as well as Quanta and Compal all declined to comment on the orders.

Pegatron will remain the primary notebook production partner for Asustek in 2011, accounting for 45-50%, followed by Quanta with a 30-35% share, the sources estimated.

Thursday, June 23, 2011

Watch for double peak in semiconductor sales in 3Q12, says Information Network

The downturn in semiconductor sales over the past few months will lead to a double peak in revenues in the third quarter of 2012 before dropping again, according to The Information Network.

"Our Proprietary Leading Indicators (PLLs) show a peak in January 2010 and again in January 2011, which will be mirrored by a rebound in semiconductor sales," said Robert Castellano, president of The Information Network. "Semiconductor sales, based on SIA's three month moving average, peaked in September 2010, and we anticipate the second peak in the third quarter of 2012 before revenues start to drop."

Looking closely at SIA's statistics, a drop in April's 3-month moving average is largely attributed to a slowdown in Japan, Castellano pointed out.

"Our PLLs suggest that the upturn in the industry should have occurred in April 2011, but because of the impact of the earthquake in Japan, semiconductor revenues dropped. Macroeconomic factors such as a drop in gasoline prices and subsequent increase in Consumer Confidence will get semiconductor sales back on track," added Castellano.

TSMC 2Q11 sales expected to meet guidance

Taiwan Semiconductor Manufacturing Company's (TSMC) consolidated revenues are expected to meet the company's guidance of NT$109-111 billion (US$3.8-3.9 billion), according to market watchers.

TSMC is expected to post another sequential drop in June consolidated revenues, the watchers said. The on-month decrease, however, is unlikely to stop the company from meeting its sales goal for the second quarter, the watchers indicated.

However, the watchers expressed caution about TSMC's business outlook for the third quarter, citing weaker-than-expected demand. Orders have slowed in part due to clients' inventory build-ups, the watchers observed.

TSMC may register single-digit sequential growth in sales for the third quarter of 2011, according to the watchers, adding that their previous estimates were more optimistic.

SPIL turning focus to SiP packaging, IDM orders

Siliconware Precision Industries (SPIL) is stepping up the development of system-in-package (SiP) specifically for use in handsets, and has been more actively expanding its IDM client portfolio, company chairman Bough Lin said on June 22.

SPIL's handset-use SiP solutions have entered the design-win stage with one to two clients, with volume shipments set to start soon, Lin revealed. SiP is a compact packaging type that supports multiple chips for portable consumer electronics devices.

In addition, SPIL has turned its focus to outsourcing orders from IDMs, Lin indicated. Component suppliers for Apple's devices, for example, are usually IDM companies, Lin noted. Acknowledging increasing IDM outsourcing would create more business opportunities, SPIL is putting a heavier emphasis on IDM orders and relationships with IDM customers, according to Lin.

Lin admitted that SPIL's IDM client portfolio is less competitive compared to that of fellow companies.

SPIL used to depend on fabless IC firms for revenue growth, with orders placed by IC design companies accounting for as high as more than 80% of SPIL's total revenues.

In other news, SPIL plans to expand capacity at its Suzhou, China plant by 50% in 2011, Lin said. The company will install an additional 500 sets of copper wirebonders at the facility between the second half of the year and early 2012, Lin added.

SPIL's planned capex budget for 2011 of US$10 billion remains unchanged, according to Lin.

Asustek takes shipment lead in non-Apple tablet PCs

Asustek Computer has become the largest tablet PC brand in the non-Apple tablet PC group with shipments of 400,000 units in the first half of 2011, according to sources from notebook component makers citing figures from notebook ODMs.

The sources pointed out that Asustek's US$399 entry-level tablet PC has successfully boosted its demand in the US and the company is already preparing for the second-generation Eee Pad Transformer, using Nvidia's quad-core Tegra 3 and Google's next-generation operating system (Ice Cream Sandwich), set for launch in October at the earliest.

Asustek will also take over Acer's position and become the largest client of Nvidia for ARM-based CPUs with Asustek estimated to place orders for 2.5 million Tegra 2/3 CPUs in 2011. In addition to tablet PCs, Asustek is also said to be planning to launch a notebook using Nvidia Tegra 3 with Google Chrome for launch at the end of 2011.


The sources pointed out that Asustek uses above-standard components for its Eee Pad Transformer and the price of US$399 is almost the same as the device's cost. The profit is mainly coming from Asustek's exclusive high-margin keyboard docking station, which consumers will normally purchase along with the device.

In addition to the second-generation Eee Pad Transformer, Asustek will also sell its Eee Pad Slider in July, priced between US$650-800, 7-inch Eee Pad MeMO 3D in the fourth quarter and Padfone, using Android (Ice Cream Sandwich) and Nvidia Tegra 3 with a price range between US$549-799. All Asustek's tablet PCs are manufactured by Pegatron Technology.

For 2011, the company is aiming to ship two million Eee Pad tablet PCs, accounting for 10% of total non-Apple tablet PC shipments.

Hard drive supply gap estimated to widen to 15-20 million units in 3Q11

Global hard drive demand in the third quarter is estimated to reach as high as 180 million units with the five major hard drive makers only capable of supplying 160-165 million units, increasing the supply gap from a shortage of 10 million units in the second quarter, according to sources from hard drive makers. The gap is unlikely to be filled before the end of 2011.

The strong demand in the third quarter will be mainly due to the IT product replacement trend in the enterprise market, as well as the increasing storage needs of cloud computing servers.

Although the supply shortage of hard drives will help maintain prices, hard drive shipments to enterprise servers, which were originally expected to strongly benefit makers, may face a decline. Currently, 50% of hard drive supply is used in desktops, notebooks and netbooks, with cloud computing servers only accounting for less than 10%. But since demand for Internet data storage is growing, hard drive makers are turning more aggressively toward the server hard drive market, which has higher profitability.

Currently, the top-10 notebook brand vendors have close to 80% of their models using either 320GB or 500GB hard drives, with the proportion at 5:5. In the third quarter, the proportion of 320GB and 500GB hard drive is expected to shift to 4:6 with 250GB models only having a very small percentage. 640GB and 750GB capacities will mainly be used in enterprise and gaming models and are unlikely to grow to become the mainstream specification in 2011.

Wednesday, June 22, 2011

Elpida develops 4-layer DRAM package with 0.8mm thickness

Elpida Memory and its subsidiary, Akita Elpida Memory, have announced development of a four-layer 0.8mm DRAM package. The thin package consists of four low-power consumption 2Gb DDR2 mobile RAM chips, assembled using package-on-package (PoP) technology.

The four-layer 0.8mm package is an eco-friendly DRAM solution that will be used in smartphones and tablet PCs to make these and other mobile devices thinner and achieve a higher memory density, Elpida said. Volume production is expected to begin in the July-September quarter of 2011.

Elpida believes the four-layer package can respond to the need not only for greater memory chip thinness but also to customer demand for improvements in memory density and memory configuration.

PoP technology is used to assemble and test different kinds of semiconductor chips in individual packages. These packages are then stacked atop each other to form a PoP configuration. Since PoP technology enables reductions in mounting space and wire length, the technology is seeing rapidly expanding applications in the mobile device market.

Gartner cuts 2011 chip forecast

While IHS iSuppli has slightly raised its forecast for the global semiconductor industry this year, Gartner has revised downward its growth projection for the sector to 5.1% from 6.2% previously predicted.

Gartner said the earthquake and tsunami in Japan raised concerns about the supply of silicon wafers, batteries, crystal oscillators, packaging and other specialized materials, but the supply constraints have not derailed the electronics industry.

"In the last two weeks of March, vendors stepped up efforts to secure supply in the face of uncertainty and potential shortfalls - leading to some double ordering which continued into the second quarter. We think vendors were cautious with their second quarter guidance, and we expect the majority will exceed those estimates," said Peter Middleton, principal research analyst at Gartner.

Gartner now forecast that worldwide semiconductor revenues will total US$315 billion in 2011, up 5.1% from US$299 billion in 2010. This is down from the firm's previous projection in the first quarter for 6.2% growth this year.

"Although the impact is less than feared, we are anticipating some residual effects in the third quarter of 2011 as friction in the supply chain may impact some production and some surprises may occur," Middleton continued. "However, once third-quarter trends are established and supply chain participants are satisfied that all issues are understood and production is normalized, we expect an effort to draw down inventory, which will weaken the semiconductor market in late 2011 and early 2012."

Worldwide application-specific standard product (ASSP) revenues are projected to reach US$79.7 billion in 2011 and grow to US$99.4 billion by the end of 2015, Gartner said. Meanwhile, with Apple's application-specific integrated circuit (ASIC) investment and a commanding grip on popular mobile devices, the ASIC market will experience solid growth through 2015, Gartner indicated. The highest overall growth through 2015 is coming from nonoptical sensors, which are primarily driven by automotive applications, but high growth is coming from increased sensor use in applications outside automotive, especially smartphones, tablets and video game hardware.

Gartner's analysts are seeing rapid semiconductor growth in the smartphone and media tablet categories. Through 2013, two-thirds of semiconductor industry revenue growth will come from smartphones and tablets, Gartner noted.

IHS said that the semiconductor industry is showing "remarkable resilience in the face of the Japan disaster and uncertain economic conditions." Anticipated soaring sales of popular consumer products such as smartphones and tablets has prompted the firm to raise its growth forecast this year to 7.2%.

TSMC, UMC likely to lower capex budgets for 2011, says paper

Taiwan's two foundry giants are likely to revise downward their capex goals for 2011 due to worries that orders in the second half of the year may not be large enough to fill their expanded capacities, the Chinese-language Apple Daily cited sources at chip equipment suppliers as indicating on June 22.

TSMC is expected to lower its capex budget this year from US$7.8 billion to US$7 billion, while UMC may cut its 2011 budget to US$1.6 billion from US$1.8 billion, according to the paper.

UMC said last week that its planned capex budget for 2011 of US$1.8 billion remains unchanged. The foundry warned that wafer ASPs might come under downward pressure in the second half of the year due to particularly weak demand.

TSMC during its most recent investors conference reiterated its 2011 capex budget of US$7.8 billion, and added that only upward adjustments would be made thereafter.

TSMC, UMC likely to lower capex budgets for 2011, says paper

aiwan's two foundry giants are likely to revise downward their capex goals for 2011 due to worries that orders in the second half of the year may not be large enough to fill their expanded capacities, the Chinese-language Apple Daily cited sources at chip equipment suppliers as indicating on June 22.

TSMC is expected to lower its capex budget this year from US$7.8 billion to US$7 billion, while UMC may cut its 2011 budget to US$1.6 billion from US$1.8 billion, according to the paper.

UMC said last week that its planned capex budget for 2011 of US$1.8 billion remains unchanged. The foundry warned that wafer ASPs might come under downward pressure in the second half of the year due to particularly weak demand.

TSMC during its most recent investors conference reiterated its 2011 capex budget of US$7.8 billion, and added that only upward adjustments would be made thereafter.

International smartphone vendors face competition from local brands in Southeast Asia

With sales ratios of smartphones to total handset sales in some markets in the Southeast Asia region expecting to grow about from 10% currently to 40-50% in the next 3-5 years, the region is becoming a battle field for all smartphone vendors, according to sources at Taiwan handset makers.

Branded handset vendors such as Nokia, RIM, HTC and Samsung Electronics, which have the comparative advantage of already built up footholds in the region, are set to meet with strong competition from local brands in the area, commented the sources.

Although Nokia has seen its share in the global handset market continue to decline recently, the vendor remains the largest vendor of feature phones in the region and is expected to further strengthen its competitiveness after its switches to the Windows Phone platform, indicated the sources.

RIM, Samsung and HTC are expected to continue to expand their shares in the region as RIM has been successfully selling its QWERTY models in Indonesia, while Samsung and HTC both have strong product portfolios, the sources added.

However, some local brand vendors in the region, including Spice and Micromax of India, Nexian of Indonesia, i-Mobile of Thailand and G'Five of China, will serve as strong contenders to compete with international brand vendors as they are able to offer multiple models with special features at low prices, said the sources.

Sales ratios of smartphones in Indonesia, the Philippines, and Thailand are expected to top 50% in 2015, while the comparable ratio in Vietnam is likely to reach 36.7% during the period, according to market research firm Canalys.

Global HDD supply short by 10 million units in 2Q11

Global demand for hard disk drives (HDDs) in the second quarter is estimated at 160 million units while total supply by the five main international vendors is expected to be 150 million units, resulting in a supply gap of 10 million units, according to industry sources.

The gap may broaden in the third quarter as demand for PCs increases, the sources indicated.

Several vendors plan to offer ARM-architecture notebooks

Several vendors, including Samsung Electronics, Toshiba, Acer and Asustek Computer, plan to develop ARM architecture notebooks, with products possibly to be launched as early as the end of 2011, according to industry sources.

The sources pointed out that ARM-based systems using Android were already launched under the smartbook name two years ago with Toshiba and Lenovo both launching products in the retail channel. However, due to weaker than expected demand, the related products were soon phased out of the market.

Since ARM's CPU has already been upgraded from single-core two years ago to quad-core with a significant increase in performance, while the platform's storage capacity has also seen significant improvements, and an enhanced user interface, ARM is already capable of launching notebook products that are able to run for a long period of time, and if the price is attractive, there is a great chance for the products to create a brand new market segment in the IT industry.

Asustek has already made plans to launch a 13-inch ARM-based notebook adopting Nvidia's processor with Android.

The sources pointed out that there are already several brand vendors reportedly set to launch ARM-based notebooks with prices lower than US$299 to compete for market share and the vendors' processor choices include Nvidia's Tegra, Qualcomm's Snapdragon and processors from Texas Instruments.

RIM lowers internal 2Q11 sales target for PlayBook

RIM, viewing that only about 500,000 PlayBooks, its first tablet PC, were sold globally from its launch in mid-April to early June, has downward adjusted its internal sales target for the second quarter, from 2.4 million units originally to 800,000-900,000 units, according to sources from Taiwan-based supply chain makers.

The sources pointed out that the PlayBook achieved strong sales of 40,000-50,000 units on its launch day, but demand from then to mid-April was lower-than-expected. RIM originally set to ship 2.4-2.5 million PlayBooks three months after launch, but since the company was only able to sell about 500,000 units in total by early June, it will be difficult for the company to achieve its original goal, the sources explained.

However, since the three models of RIM's PlayBook that are currently available in the retail channel, only support Wi-Fi, market watchers are still optimistic about models with 3G, LTE and WiMAX support, which are set to launch after the third quarter, and believe PlayBook's sales will start picking up after these models are released.

Although PlayBook did not achieve its original shipment target, its shipment performance is still one of the front-end players within the non-Apple tablet PC group, especially for products mainly selling in the US and Europe.

Apple currently still has the strongest sales among tablet PC players with its orders to the supply chain expected to reach 8-10 million units in the second quarter. In addition to RIM, Acer has also recently reduced its Iconia tablet PC shipments target from 5-7 million units in 2011 to only 2.5-3 million units.

Currently, monthly shipments of Motorola's Xoom, Acer's Iconia, Asustek's Eee Pad Transformer and RIM's PlayBook average at about 100,000-200,000 units, and with Hewlett-Packard (HP) also set to launch its TouchPad in early July, these devices will still need to face a lot of challenges to boost their market demand in the future.

Amazon to launch tablet PCs in August-September, say Taiwan component makers

Amazon is poised to step into tablet PCs and will launch models as son as August-September, with targeted global sales of four million units for 2011, according to Taiwan-based component makers.

The timing of launch is to meet the peak sales period prior to Thanksgiving in the US and the year-end holidays in the US and Europe, the sources pointed out.

Amazon adopts processors developed by Texas Instruments, with Taiwan-based Wintek to supply touch panels, ILI Technology to supply LCD driver ICs and Quanta Computer responsible for assembly, the sources indicated. Monthly shipments are expected to be 700,000-800,000 units.

Amazon will provide streaming movie services for users of its tablet PCs, the sources noted.

Tuesday, June 21, 2011

Smartphones to boom in Southeast Asia, says Canalys

About 106 million mobile phones are expected to ship in Southeast Asia in 2011, up 19% from the 90 million units shipped last year, according to Canalys. Driveny primarily by smartphone growth, the number will increase to 163 million by 2015, said the market research firm.

Smartphone shipments will achieve a CAGR of 39% over the next four years, with particularly strong momentum anticipated in emerging markets such as Indonesia, the Philippines and Vietnam, Canalys said.

Canalys pointed to several key factors that will fuel the region's smartphone market expansion, including a positive economic outlook, local operators' eagerness to grow average revenue per user (ARPU) from increased data subscriptions, strong social media usage among end-users, robust demand for mobility products and competitively priced phones.

"Southeast Asia has a diverse but incredibly dynamic smartphone market right now," said Rachel Lashford, managing director of Canalys, Mobile & Asia Pacific."Consumers and vendors are in a win-win situation, thanks to a powerful combination of mobile-savvy end-users and a favorable economic landscape."

Both within the region and globally, Singapore particularly stands out as having one of the most advanced markets in terms of smartphone penetration, Canalys said. In 2010, smartphones accounted for 61% of all mobile phones shipped in the country, significantly higher than the global average of 23%. Phones priced at the premium end of the market found favor with local consumers, with more than 50% of smartphone sales priced over US$550. Canalys forecasts that this trend will continue through 2011, with high-end devices accounting for the majority of the 3.1 million smartphones expected to ship in Singapore.

"The three major operators in Singapore have successfully enticed consumers through their wide product portfolios, competitively priced bundled data contract plans, attractive subsidies and strong marketing campaigns to promote the latest smartphones," said Canalys principal analyst Daryl Chiam. "SingTel, for example, has worked closely with HTC for the exclusive launch of the ChaCha smartphone last week."

In contrast to Singapore, Canalys anticipates competitively priced mid- and lower-tier products to generate growth in other parts of Southeast Asia.

Meanwhile, on the vendor front, Nokia will continue to face pressure as a result of its ongoing strategy and platform transitions, according to Canalys. With its wide distribution network capable of pushing significant volumes, Canalys believes that the vendor is still well-placed and should not be underestimated.

"Once Nokia is through this transitional period and has delivered a Windows Phone-based product portfolio across several price points, it will re-establish itself as a formidable force in the smartphone market," Chiam noted. "Until then, other manufacturers will be looking to fill the gap."

Apple demands 10% quote cuts from component suppliers in 2Q11, says paper

Apple's suppliers of components such as PCBs, optical components, battery modules and touch panels are reportedly facing pressure from Apple, which has demanded quote cuts of 10% for the second quarter of 2011, according to a Chinese-language Economic Daily News (EDN) report.

Since Apple's tablet PC shipments are expected to grow 70% sequentially to eight million units in the second quarter, significantly benefiting related upstream component suppliers, Apple has demand its suppliers to provide cuts in return, the paper noted.

Since Apple's tablet PC shipments are expected to continue increasing in the third quarter, Apple is likely to demand for more cuts in the quarter, the paper added citing the component makers.

Component makers may suffer on poor Nokia, RIM outlook

Some Taiwan-based handset component makers including Merry Electronics, Ichia Technologies and Silitech Technology may see weak sales in the second half of 2011 as Nokia and Research in Motion (RIM), two of their major clients, have both revised their guidance for the second quarter or even for all of 2011, according to industry sources.

Nokia and RIM have been the largest buyers of handset keypads, and Nokia has been the most important client for acoustic components for local makers, the sources noted.

However, Nokia and RIM are expected to see their market shares dented by other brand vendors due to a weak portfolio of new high-end models to enable their competition in the smartphone market, the sources said.

Merry has managed to cut into the supply chain for Apple's iPhones, and therefore has minimized the impact resulting from reduced orders from other clients, indicated the sources.

Elpida, Micron reportedly in talks on DRAM partnership

High-level executives from Elpida Memory, Micron Technology and Nanya Technology reportedly have been holding frequent talks as a warm-up to some form of partnership in the future. They are discussing how they can cooperate to compete with Samsung Electronics, the long-time market leader for DRAM memory, according to industry observers.

Their latest talks have touched on the possibility of Inotera Memories, currently the joint venture between Micron and Nanya, being run as an integrated platform under the pair's planned partnership with Elpida, according to the sources. Elpida is also mulling plans to acquire some Inotera shares held by the Formosa Plastics Group (FPG).

FPG, the largest plastics manufacturing conglomerate in Taiwan, is the parent company of Nanya and Inotera. The parent and its affiliate companies have usually thrown full support behind the fundraisers initiated by Nanya and Inotera.

Elpida and Micron were in talks about DRAM technology co-development between late-2008 and early-2009, but no consensus was reached mainly due to capital issues, the sources observed. Cooperation talks were also hard to continue as DRAM prices began to rebound in mid-2009, the sources pointed out.

Elpida uses stack capacitor technology and has unveiled development of a new 25nm process with volume production expected to begin in July. Elpida has a production subsidiary in Taiwan, Rexchip Electronics, and has signed foundry deals with Taiwan-based Powerchip Technology and ProMOS Technologies.

Powerchip and ProMOS have both recently disclosed plans to place a heavy emphasis on contract manufacturing.

Micron has jointly developed stack process technologies for DRAM with Nanya. The pair announced in early 2010 their co-developed DDR3 chip using copper-based 42nm DRAM process technology.

Industry observers believe that if Elpida partners with Micron on technology, some form of consolidation among Taiwan-based DRAM companies is expected to carry out.

Intel to launch Ivy Bridge in March 2012

Intel has recently decided to launch its next-generation Ivy Bridge CPU in March of 2012, back from its original schedule at the end of 2011 to allow a better transition between the new and old platform, according to sources from notebook players.

The sources pointed out that the delay of the Ivy Bridge platform will give vendors more time to sell their Sandy Bridge-based notebook models.

Due to Intel Sandy Bridge's 6 series chipset design flaw, Intel recalled the products in January and launched a fixed chipset in April, leaving notebook players suffering from two months of lower demand. With the notebook market also experiencing an impact from the tablet PCs, Intel has decided to slow down its pace and re-organize its lineup by delaying the launch.

Ivy Bridge was originally expected to start mass production in November of 2011 and will be announced in January of 2012, but the delay is expected to move the official launch to after March 2012.

HP, Acer set eyes on the enterprise PC market

First-tier global PC brand vendors Hewlett-Packard (HP) and Acer are both placing their focus on the enterprise market in the second half of 2011 with HP recently launching 22 new enterprise-based PC models and Acer chairman JT Want declaring that the enterprise and cloud computing markets will be a key segment that the company will work in, according to sources from PC makers.

The consumer notebook market has been seriously impacted by strong tablet PC demand in 2011, causing brand vendors to see lower-than-expected growth compared to previous years, while the enterprise PC market has been affected by the economic crisis, which delayed IT purchases. However, brand vendors expect enterprises to start replacing their IT equipment in the second half and therefore they have been working aggressively for the segment, the sources noted.

The sources pointed out that the enterprise PC market already started recovering in the second half of 2010 and is seeing a more obvious growth in 2011. Enterprise buyers normally take longer for their purchase evaluation, causing the enterprise market to see delayed growth from the consumer market, but the growth will be last longer.

The sources cited figures from IDC and pointed out that HP was the largest enterprise PC vendor in the first quarter of 2011 with a share of 22% for the desktop segment, while Dell was the second largest vendor in the quarter with a 4 percentage points behind HP, follow by Lenovo, Acer and Fujitsu. As for the enterprise notebook segment, HP was still the largest, follow by Lenovo, Dell, Acer and Toshiba.

Sunday, June 19, 2011

Battery maker AcBel to benefit from cloud computing opportunity

Taiwan-based battery maker AcBel expects its revenues to see a double-digit percentage growth in 2011, benefiting from cloud computing driving demand for server power supplies, according to the company.

Market watchers pointed out that AcBel has been cooperating with IBM for many years, while Dell, Hewlett-Packard (HP) and Foxconn Electronics (Hon Hai Precision Industry) are all clients of AcBel in the industrial-use battery business.

In addition to industrial-use batteries, AcBel expects consumer-use power devices and fuel cells to become sales drivers for 2011, while smart grid and LED streetlight businesses have the most growth potential in the future.

Although the company will see strong growth in revenues, due to Taiwan's exchange rate, the company's gross margin is expected to drop from 14-15% in 2010 to 13-14% in 2011

Acer reducing 2011 tablet PC shipment target by 50%

Acer, on June 15, announced that the company has reduced its annual tablet PC shipment forecast from originally 5-7 million units to only 2.5-3 million units, a drop close to 50% and with brand vendors such as Motorola, RIM and Samsung Electronics all reportedly having reduced their tablet PC sales targets for 2011, concerns about whether Android-based tablet PCs will be able to compete against Apple's iPad are starting to rise among market watchers.

At the company's investors meeting on June 15, Acer chairman JT Wang pointed out that the company is currently in the middle of a great transition and the company's current goal is to lower its retail channel inventory. The company expects to continue working on digesting its inventory throughout the third quarter with expectations to have an inventory level the same as 7-8 years ago. Although Acer will reduce its annual tablet PC shipments, Wang is still confident about the performance of Android-based tablet PCs.

Wang pointed out that all the things that the closed system can do will all be able to function in the open system, but if consumers use the former, they will need to follow everything the closed system designers says and have no choice for expansion, or run Flash, and will not be able to be their own master. Acer is trying to serve consumers who want to make their own decisions.

Wang noted that after taking a series of emergency measures, Acer is currently in a safer state than before and should reach its shipment goal for the second quarter of a sequential drop of 10%. For the future, Wang expects Acer's third-quarter shipments to share a similar volume as in the second with a chance to be better. Its performance will bounce out of the button after the third quarter.

In addition to reducing inventory, the company is also working on reorganizing its employee management and is set to lay off about 300 employees in Europe, Africa and the Middle-East, while the US, Greater China and Asia Pacific markets will see no changes.

Acer president Jim Wong pointed out that the company already shipped 800,000 tablet PCs before the end of June and with the launch of its new 7-inch tablet PC, Acer's tablet PC shipments in the third quarter will reach 800,000 units. Wong added that the estimated numbers are all retail channel sales and include no additional 'push'.

Notebook ODMs becoming conservative over 2H11 outlook

Notebook ODMs including Quanta Computer, Compal Electronics and Wistron have become more conservative about the business outlook for the second half of 2011 due to drastically changing market conditions in the US and Europe, and the deferred buying effect brought about by the planned launches of tablet PCs from brand vendors, according to industry sources.

Factors including debt problems in Europe, steep falls of stock prices in the US plus its high unemployment rate are likely to work to undermine consumer purchasing, the sources pointed out.

Although back-to-school demand in September, and the Thanksgiving and year-end buying seasons are highly anticipated, most ODMs are not very active in building up inventories of parts and components, indicated the sources.

Additionally, consumers are also waiting for the launches of tablet PCs from Amazon and Barnes & Noble as well as from Hewlett-Packard (HP), Dell and Lenovo in the second half of 2011, deferring their buying of new notebooks, the sources added.

The sales ratios of notebooks in the first and second halves of 2011 will be 50:50 instead of 40:60 as in previous years, Wistron chairman Simon Lin said earlier.

Quanta has also stated it does not think that the second half of 2011 will be an exciting peak season for notebook makers although sales in the latter-half will grow 10% from the first half.

Compal, which has already lowered its notebook shipment goal for the year to 48 million units, may see its shipments affected further by inventory adjustments at Acer, the sources pointed out.

Friday, June 10, 2011

Tablet DRAM demand explodes in 2011 as market expands beyond iPad, says IHS iSuppli

Demand for DRAM generated by tablets will rise by a factor of nine in 2011, fueled by booming sales of the iPad, combined with the arrival of more competitive alternative products, according to new IHS iSuppli research.

Tablets this year will consume 333.7 million Gb of DRAM, up from 37.3 million Gb in 2010. DRAM demand from tablets then will vault to 1.1 billion Gb in 2012 and continue to climb during the next four years, reaching 5.8 billion Gb by 2015.

Tablet shipments this year are projected to reach 63.2 million units, up from 17.5 million in 2010, and will hit 113.9 million units next year.

"Because of their soaring shipments, tablets are gaining increasing prominence in the DRAM market," said Mike Howard, principal analyst for DRAM and memory at IHS iSuppli. "The iPad, which has single-handedly dominated the tablet business since its introduction last year, will account for the bulk of the DRAM demand in the market in 2011 and the following years. However, competition to the iPad is seeping into the market, driving further DRAM demand."

iPad competitors on market now include the Galaxy Tab from Samsung Electronics, the Xoom from Motorola, the PlayBook from Research In Motion and the TouchPad from Hewlett-Packard (HP). None of these entrants have seriously endangered the hegemony of the iPad. However, a new competitive tablet device from bookselling and retail giant Amazon could represent the most serious challenge yet for the iPad, potentially driving even more DRAM demand.

"Unofficial reports of a new tablet device being readied by Amazon to go head to head with the iPad bodes nothing but good news for the DRAM market," Howard said.

Reports indicate that an Amazon store with a broad range of content, including music, digital games, movies, TV shows, books and Android apps, will be available to users of the Amazon tablet at the time of launch. This will represent serious competition to the Apple iTunes store and potentially allow the Amazon tablet to succeed where competing tablets have failed.

While no specs have yet been announced for an Amazon tablet, Amazon's aptitude for delivering a satisfactory customer experience is well-known. The Amazon tablet will compete on user experience - not necessarily on hardware specs.

With DRAM content in the Amazon tablet expected to be robust, estimated to be 4Gb per device, similar to the iPad 2, tablet DRAM demand is likely to remain a bright spot for the memory industry in the years ahead.

TSMC May revenues up 5.4% on year

Taiwan Semiconductor Manufacturing Company (TSMC) has announced consolidated revenues for May 2011 of NT$36.71 billion (US$1.28 billion), up 5.4% on year.

TSMC's consolidated sales for April and May totaled NT$73.84 billion. It has estimated second-quarter sales at NT$109-111 billion, up 3-5% sequentially.

TSMC accumulated NT$179.21 billion in consolidated revenues from January through May, showing a 11.4% increase compared to the same period of 2010.

TSMC recently reiterated that consolidated revenues would grow by 20% in 2011. It registered NT$419.54 billion in consolidated sales last year, up 41.9% from 2009 levels.

Asustek to ship 300,000 Eee Pad Transformer tablets in June, says chairman

Asustek Computer's shipments of Eee Pad Transformer tablet PCs will reach 300,000 units as projected for June, and will account for 10% of total revenues for the month, according to company chairman Jonney Shih.

For the first half of 2011, total shipments of Eee Pad Transformers will top over 400,000 units compared to its target of 300,000, Shih added.

Shih made the remarks while Acer has lowered its tablet PC shipment target for 2011 from 7.5-10 million to five million units. But sources at component suppliers believe that Acer's revised target still remains too high.

While Motorola Mobility has said that it shipped 250,000 Xoom tablets during the February-April period, the sources indicated total shipments of Xoom tablets will be below 500,000 units by the end of June.

Additionally, sales of Samsung's Galaxy Tabs and HTC's HTC Flyers tablets have been flat so far, the source added.

With plans to launch new models including sliding tablets and its Padfone, Asustek is confident that it will be able to sustain its goal to ship two million tables PCs in 2011, Shih stated.

China makers to roll out 2.2-2.3 million tablet PCs in 2011

Production of white-box tablet PCs in China is expected to grow 20-30% on year to 2.2-2.3 million units in 2011, with 7-inch models accounting for 60% of output followed by 8-inch models at 15% and 9.7-inch ones at 10%, according to sources citing figures from research firms.

Due to consumers in China being more sensitive to price and favoring products with high performance/price ratio, 7-inch models are receiving the most attention from China consumers.

Because most of China's white-box players have already have experience related operating strategy, sales model, and product R&D, they were able to quickly cut into the white-box markets for tablet PCs and netbooks. With their products' added-value and lower prices, these white-box players expect their advantages to help them attract consumers.

In addition to standard web browsing, most of the white-box tablet PC players are adding functions such as camera modules, e-book reading and GPS into their machines to increase the performance/price ratio to compete against first-tier vendors.

However, although most of the white-box vendors are attracting consumers with low prices, labor and material costs have been rising, and the increasing exchange rate of the Chinese Yuan is also damaging their gross margin. Players are now aggressively looking to sell their products to markets outside of China to boost their overall profitability.

Wintel era is over, says Asustek chairman

The so-called Wintel era is over with no CPU or OS vendors to be able to dominate the PC, tablet PC or handset markets as they did before, according to Asustek chairman Jonney Shih. The breakup of the Wintel alliance offers a brand new opportunity for system vendors to thrive again in the IT market, Shih said.

Shih pointed out that system vendors, which have innovations in design, capabilities in technology R&D, and are closer to the market, will be able to achieve success in the new IT era. Asustek is currently learning from vendors such as Apple and Sony, and is aiming to own a market position within the new IT era, in which the boundaries between the notebook, tablet PC and handset markets are already turning blurry.

Although the rise of tablet PCs is expected to provide system vendors opportunities, it may also significantly reshuffle the ranking of the whole IT market.

Commenting on Acer's recent downward performance, Shih pointed out that Asustek already improved its inventory management system after experiencing the financial crisis in the fourth quarter of 2008, and its retail channel partners all have healthy inventory levels. Asustek is currently checking its downstream partners' inventory levels every Thursday to ensure their supply management.

For the future, company president and CEO Jerry Shen estimates that the company's third quarter performance will be stronger than the second with the IT market in 2011 to return to its usual pattern of having stronger sales in the second half than the first.

Thursday, June 9, 2011

TSMC reiterates revenue target for 2011

Taiwan Semiconductor Manufacturing Company's (TSMC) target of 20% growth in 2011 consolidated revenues remains unchanged, according to company chairman and CEO Morris Chang.

Chang also reiterated that revenues for the global semiconductor industry are set to increase 5% this year, while the dedicated foundry business will see a larger 12% increase.

Chang said he expects smartphones and tablet PCs to spur demand for semiconductors in 2011, and TSMC will definitely be a beneficiary of the trend.

In addition, Chang revealed that the revenue share of TSMC's 45nm and below processes will continue growing in the second half of 2011. With its lead in technology and advanced process capacity, Chang believes TSMC will see its global foundry market share expand in 2011.

Chang made the remarks at TSMC's annual general shareholders meeting on June 9.

TSMC's shareholders approved a cash dividend per share of NT$3 for 2011, and the transfer of the company's solar business and solid state lighting business into two new TSMC wholly-owned companies.

Acer places orders for 80,000 Z series APUs from AMD for tablet PCs

Acer has recently placed orders for 80,000 Z series APUs from AMD for use in tablet PCs, targeting the enterprise market, according to sources from upstream component makers. However, both Acer and AMD did not confirm the orders.

In addition to Acer, Micro-Star International (MSI) is also developing tablet PC models using AMD's APU.

Since Google Android 3.0 currently still has issues which need to be resolved, while the next-generation Android operating system codenamed Ice Cream Sandwich will not appear until the end of 2011, some tablet PC vendors have decided to launch Windows 7-based tablet PCs targeting the enterprise market to maintain their shipments.

Since Intel's Oak Trail-based Atom processor is higher in both price and power consumption, several notebook vendors have already started considering AMD's platform. In addition to Acer and MSI, some vendors have also started inquiring about AMD's Z series APU.

AMD's Z series APU is produced through Taiwan Semiconductor Manufacturing Company's (TSMC's) 40nm process and is already shipping, targeting the Windows-based tablet PC market, noted the sources adding that they expect shipments of Z series APUs to reach at least 500,000 units in the second half of 2011, creating strong pressure on Intel's Oak Trail processor.

Taiwan market: Social network phone HTC Salsa launched

HTC has launched its mid-range Android phone, the HTC Salsa, in the Taiwan market in cooperation with Chunghwa Telecom (CHT). The device carries a suggested retail price of NT$12,900 (US$449) and is optimized to integrate with Facebook.

The number of Facebook users in Taiwan totals nine million, of which 6.3 million are active users who eventually will be the potential buyers for the Salsa, said Jack Tong, vice president of HTC Asia Pacific.

While maintaining a relatively high share in the local high-end smartphone sector, HTC also aims to boost its share in the mass market segment with the launch of the mid-range Salsa, said Tong, adding that the Salsa will also target students and feature phone users.

The Salsa is powered by an 800 MHz processor and is equipped with a 3.4-inch touchscreen, a built-in 5-megapixel camera, a gravity sensor, a digital compass and an ambient sensor.

Apple becomes largest OEM semiconductor buyer in 2010, says IHS iSuppli

Spurred by booming demand for the iPhone and iPad, Apple in 2010 became the largest buyer of semiconductors among OEMs for the first time ever, according to IHS iSuppli.

Apple in 2010 bought US$17.5 billion worth of semiconductors, a 79.6% increase from US$9.7 billion in 2009. This represented the highest rate of increase among the world's Top 10 OEM semiconductor buyers, allowing Apple to rise up two positions to take the number one rank in 2010, said IHS. Apple in 2009 was the third-largest semiconductor purchaser behind Hewlett-Packard (HP) and Samsung Electronics; it was sixth in 2008.

"Apple's surge to leadership in semiconductor spending in 2010 was driven by the overwhelming success of its wireless products, namely the iPhone and the iPad," said Wenlie Ye, Analyst for IHS. "These products consume enormous quantities of NAND flash memory, which is also found in the iPod. Because of this, Apple in 2010 was the world's top purchaser of NAND flash."

Apple is likely to continue increasing its semiconductor spending during the coming years at an above-average pace, allowing the company to extend its lead over HP, Samsung and other OEMs in 2011 and beyond, IHS believes. In 2011 Apple's semiconductor spending is expected to exceed that of HP by US$7.5 billion, up from US$2.4 billion in 2010.

SEMI forecasts 31% rise in equipment spending and 9% manufacturing capacity increase in 2011

SEMI statistics suggests increasing capital expenditure and growing installed semiconductor manufacturing capacity in 2011. Fab construction spending, however, decelerates this year and in 2012.

"2011 is expected to be a record year for fab equipment spending. Since February, some companies have increased capex guidance and, as a result, fab equipment spending should reach an all-time high of about US$44 billion. The spending pace is expected to decline 6% to US$41 billion in 2012, yet will remain the second highest annual level on record," said Christian Gregor Dieseldorff, senior analyst of fab information in the SEMI Industry Research and Statistics group. "However, the number of new volume fabs starting construction is historically low, with potential implications for industry capacity plans in 2012 and beyond."

The SEMI database indicates that 17 new volume fabs, including 13 LED fabs, have a high probability (over 60%) of beginning construction in 2011. Excluding the LED fabs, SEMI predicts only four volume fabs will begin construction this year and another four in 2012. The SEMI fab database also now identifies candidates for investment in the potential transition to manufacturing on 450mm wafers. Sometime in 2012, the industry will likely see initial equipment expenditures for 450mm pilot development. Construction of the first 450 mm ready facilities began in 2010, and more will begin construction this year.

The earthquake in Japan on March 11 may have some short-term effect on utilization rates and capacity output, but will not have a significant impact on installed capacity, SEMI believes.

Installed capacity is expected to increase about 9% in 2011, according to SEMI. In 2010, the growth rate in capacity of foundry fabs surpassed that of memory fabs, and this trend is expected to continue in 2011 as foundry capacity will grow at a faster pace.

AMD and Nintendo co-announce new gaming device; AMD to reintroduce FX brand

AMD, at Electronic Entertainment Expo (E3), announced its support for Nintendo's newly-announced Wii U system, as a new way to enjoy HD console gaming entertainment. The custom AMD Radeon HD GPU reflects the characteristics of AMD's graphics technology solutions: high-definition graphics support; rich multimedia acceleration and playback; and multiple display support.

AMD custom graphics enable the new Nintendo system to provide exciting, immersive game play and interaction for consumers around the world, said AMD. The AMD custom graphics processor features a modern and rich graphics processing core, allowing the new console to shine with new graphics capabilities.

Meanwhile, AMD also reintroduced the FX brand for PC processors and platforms at the E3. FX-branded products will be geared toward enthusiast PCs and HD entertainment aficionados.

The FX brand is associated with AMD's fastest processors and most powerful platforms, those designed for unrestrained PC performance for the ultimate gaming and HD entertainment experiences. In addition, these processors and platforms drive rich visuals for graphics-intensive applications and high-resolution AMD Eyefinity multi-monitor configurations. The first platform to earn the FX title, the Scorpius platform, will feature the now-available AMD 9-series chipset motherboards and AMD Radeon HD 6000 Series graphics cards, plus the upcoming Zambezi unlocked, native eight-core processor.

Asustek to sell new ultra-thin notebook at a price US$100 cheaper than MacBook Air

Taiwan-based notebook brand vendor Asustek Computer, which showcased its latest ultra-thin 11.6-inch UX21 notebook at Computex 2011, is expected to set the model's price at US$100 cheaper than Apple's MacBook Air with similar specifications. The model is estimated to show up in the retail channel in September, according to sources from the upstream notebook supply chain.

The UX 21 features an industrial design of 3mm at its thinnest part and 17mm at the thickest, similar to that of MacBook Air, while the two notebooks also share a similar weight at around 1.1kg, giving the UX 21 a great opportunity to challenge MacBook Air.

Asustek adopts an open-cell panel for the UX 21 to realize the model's ultra-thin design, while the adoption of an aluminum chassis and solid state drive (SSD) helps reduce heat, while shrinking down the thickness of the notebook.

As Apple is estimated to launch new 11.6-inch and 13.3-inch MacBook Airs with an updated platform in June or July, Asustek is monitoring Apple's pricing strategy closely and will offer its product at a cheaper price level to gain an advantage.

However, the sources pointed out that since MacBook Air currently accounts for about 10-20% of Apple's MacBook sales, indicating that out of Apple's total MacBook sales of three million units each quarter, Apple is capable of selling about 300,000-600,000 MacBook Airs. If Asustek's ultra-thin notebook cannot reach such a volume, the company is likely to have higher production costs which combined with the lower price point will affect profitability.

Inotera starts making server-use DRAM ahead of schedule

Inotera Memories started manufacturing DRAM chips used in servers in May 2011, ahead of the originally scheduled second half of the year, according to company president Charles Kao. Non-PC use products are expected to account for 50% of its total revenues at the end of 2011, said Kao.

Inotera finds it necessary to move towards server DRAM and other non-PC memory products to diversify, as focusing on conventional DRAM cannot sustain the growth and profitability of the company, Kao indicated. Prices for server DRAM, for instance, are 30-50% higher than those for conventional PC-use products, Kao added.

Inotera now uses 50nm process technology to make server DRAM mainly 2Gb chips, Kao said. The company is also migrating to a 40nm process for PC DRAM manufacturing, and will start 3Xnm pilot runs in the third quarter, according to Kao.

Inotera posted net losses of NT$4.04 billion (US$141 million) in the first quarter of 2011, which marked the fifth straight quarterly loss for the company.

Inotera is a DRAM-manufacturing joint venture between US-based Micron Technology and Taiwan's Nanya Technology. It now has a monthly capacity of 130,000 12-inch wafers split equally between the two investors.

Wednesday, June 8, 2011

Taiwan market: Samsung launches Galaxy S II smartphone in cooperation with CHT, TWM

Samsung Electronics on June 7 launched its Android-based Galaxy S II smartphone in the Taiwan market in cooperation with Chunghwa Telecom (CHT) and Taiwan Mobile (TWM).

Global sales of the Galaxy S II topped one million units within one month after the mobile device was launched in late April, according to Andy Tu, president of mobile communications unit, Samsung Taiwan.

Samsung will push sales of the Galaxy S II to 120 countries worldwide simultaneously in June, said Tu, noting that the smartphone is expected to rank as the top-selling model of all smartphones with a price tag of over NT$15,000 (US$523) in the Taiwan market.

Samsung, the second-ranked handset vendor with a 21.3% share in terms of sales volume in the Taiwan market in April, is likely to replace Nokia as the top-ranking vendor for the segment in May, according to an estimate by sources in local channels.

Nokia was the top vendor with a 21.4% share in terms of sales volume in the local market in April, the sources indicated.

In the Taiwan smartphone market, Samsung has reached market shares of 31% and 64% in terms of sales volume and value, respectively, Tu noted.

Android phones set to grab more share in 3Q11 as no new models from Apple, Nokia and RIM

Android-based smartphone vendors including HTC and Samsung Electronics apparently will draw a great opportunity to boost their market share globally in the third quarter in the absence of new models from Apple, Nokia and RIM (Research in Motion), according to industry sources in Taiwan.

Apple did not unveil its next-generation iPhone at the ongoing WWDC (Apple Worldwide Developer Conference) 2011 indicating that the iPhone 5 will not hit the market until September 2011, the sources indicated.

RIM reportedly will also postpone the launch of its BlakcBerry 7-based Bold 9900/9930 to September, noted the sources.

Although Nokia will continue to launch some Symbian Anna-based devices, the top-ranking vendor seems to be unable to compete efficiently with a flurry of Android models released by rival vendors until it rolls out Windows Phone 7.5-baded Mongo smartphones at the end of 2011, the sources commented.

The recently launched Galaxy S II from Samsung Electronics and the HTC Sensation from HTC are being noted as the two Android-based flagship models that will help Samsung and HTC drive up their market share, the sources indicated.

Sales of the Galaxy S II in Korea and the UK have outperformed the iPhone 4 since the device was launched in the two markets in May, noted the sources, adding that current monthly shipments of the HTC Sensation may reach 700,000-800,000 units.

Microsoft reportedly considers launching own-brand tablet PC

Microsoft is reportedly considering to launch an own-brand tablet PC that features Windows 8 by the end of 2012 with cooperation from Texas Instruments and Taiwan-based OEMs/ODMs, according to sources from the upstream supply chain. However, Microsoft did not confirm the rumor.

Facing Apple's iOS and App Store successful assistance in helping iPhone and iPad to gain shares in the smartphone, tablet PC and even PC market, while Google has also been working aggressively on developing operating systems and establishing its own supply chain alliance, Microsoft plans to copy its branding strategy from product lines such as Xbox 360, Zune, Kin smartphone and TV, to compete in the tablet PC segment.

Although Microsoft has been seeking business opportunities outside of PC-related markets and is aggressively launching own-brand products, Xbox 360 is currently the only own-brand product line that Microsoft has achieved success, while Zune media player, Kin smartphone and own-brand TVs all had unsatisfactory performance. However, Microsoft is still considering to launch an own-brand tablet PC and is proceeding on a low profile, the sources noted.

The sources pointed out that despite the plans to launch its own-brand tablet PC, Microsoft will continue to push its IDP plans for Windows 8.

As for the reaction from Microsoft's system clients, the sources pointed out that the system vendors' dissatisfaction with Microsoft launching own-brand tablet PCs is unlikely to impact Microsoft significantly in the short term.

CMI panel supply for iPad 2 to increase in 3Q11

Rumors have been circulating about Taiwan-based TFT LCD panel maker Chimei Innolux (CMI) supplying touch panels to Apple to be certified for iPad 3. According to industry sources, CMI's June shipments of panels for iPad 2 are targeting 400,000-500,000 units.

Nevertheless, according to upstream glass makers, CMI's demand for small- to medium-size glass is still fairly low and CMI's June shipments are estimated to be around 30,000-40,000 units only. This is still far away from the targeted shipments of 400,000-500,000 units set by CMI.

CMI stated its emphasis on developing in-plane switching (IPS) technology and has been expanding the technology in touchscreen applications.

CMI estimates that beginning in July the monthly capacity for iPad 2 panels will increase above one million units.

Apple has increased the production of iPad 2 since June. Taiwan-based touch module suppliers for iPad 2, TPK Holding and Wintek, have almost reached the targeted 3.5-4 million units in monthly shipments. CMI will need to increase shipments to remain a supplier for Apple, said industry sources.

Tuesday, June 7, 2011

Samsung qualifies 28nm LP process for high-performance mobile applications

Samsung Electronics has announced that its foundry business qualified 28nm low-power (LP) process with High-k Metal Gate (HKMG) technology and is ready for risk production. Additionally, the company has added a new variant to its advanced process technology roadmap, 28nm LPH HKMG.

With more functionality converged into a single system-on-chip (SoC), Samsung claimed its 28nm LP and LPH process technologies offer designers comprehensive solutions to keep pace with the challenges of exploding bandwidth, advanced integrated functionality and low-power constraints.

Samsung's 28nm LP process delivers a cutting-edge process platform with 35% active/standby power reduction at the same frequency or 30% performance boost at the same leakage over 45nm LP SoC designs, according to the company.

The newest process node, 28nm LPH process, has been specifically developed for mobile device applications that can deliver over 2GHz processing performance, Samsung said. 28nm LPH offers 60% of active power reduction at the same frequency or 55% of performance boost at the same leakage over 45nm LP SoC designs.

"We are pleased to offer 28nm LP and LPH process technology with complete design enablement ecosystem to our customers," said KH Kim, executive VP of Samsung's foundry business. "In doing so, our customers are able to design and manufacture chips that offer the best possible user experience on the next generation of smart devices such as smartphones, tablet PCs and Internet TVs."

Together with its 28nm LP and LPH processes, Samsung offers an extensive and comprehensive suite of 28nm LP design enablement solutions from all major ecosystem partners. Samsung EDA solutions include full process design kits (PDKs) and design flows from Synopsys, Cadence, Mentor, and Magma. Samsung also has an expansive licensed portfolio of standard cells, memories, and interface IPs from leading companies including ARM and Synopsys.

Samsung Foundry is currently accepting designs for its 28nm technologies. Multiple customer designs have been silicon-validated, and many more products and IP test chips are being processed at Samsung's logic fab, the S Line, in Giheung, South Korea.

iCloud could help Apple sustain iTunes' dominance, says Ovum

Apple has held its nerve, taking its time to create a cloud-based media streaming proposition, dubbed iCloud, in the face of rival launches from both Amazon and Google, according to market research firm Ovum. Such nerve may well have stood Apple in good stead, allowing licensing deals to be inked and enabling existing iTunes collections to be streamed from the cloud to any Apple device without the need for laborious uploading.

This compares well with Amazon's Cloud Drive and Google's rather lazy Beta for Music, which force users to upload their music collections all over again, stated Mark Little, principal analyst at Ovum.

Apple does appear to be setting iCloud up to be more user friendly than Amazon's and Google's offering. However, according to Ovum, this focus on consumer experience looks to support Apple's continued dominance of the digital music market, but much depends on the business model chosen.

If iCloud is bundled with an unchanged MobileMe, Apple's aged and less than successful US$99 per year cloud services offering, Apple could land itself with a handicap, Little explained. However, if the storage and applications available in MobileMe are significantly upgraded with other useful services, at the right price, Apple could at last be creating a cloud platform as a base from which to defend iTunes' dominant position, not just against Amazon and Google but perhaps more importantly, against Spotify.

Slowing consumer demand reduces PC growth for 2011, to remain growing for long term, says IDC

Worldwide PC shipments are now expected to grow by just 4.2% in 2011, down from a February forecast of 7.1%, according to the IDC Worldwide Quarterly PC Tracker. A combination of declining first quarter shipments, an increasingly conservative economic outlook, relative saturation among developed market consumers, and competing products will lead to slow growth in 2011 before a rebound in 2012. For 2012 through 2015, growth is still expected to fall in the 10% to 11% range.

Consumer PC purchases have been a cornerstone of PC growth over the past five years. During this time, a transition to low-cost portables helped drive purchases by new users in emerging markets as well as replacement and secondary systems in more mature markets. Consumer PC shipment growth averaged 18.9% from 2005 to 2007, almost 7% faster than commercial shipments. During 2008 and into 2009, consumer growth was actually faster at more than 21% while commercial growth fell below 3% in 2008 and then dropped to negative 10.5% during the recession in 2009.

The growth in 2009, which was remarkably independent of the economic pressures following the housing bubble, banking crisis, and related recession, was largely fueled by the mini notebook (netbook) boom. Consumers in mature regions snapped up over 19 million mini notebooks in 2009 versus just 6.6 million the prior year, and the jump accounted for over 80% of volume growth in the segment. Emerging regions also got a bump from mini notebooks, which added seven million units in 2009, accounting for roughly half of growth in portable PCs.

However, the appeal of low prices for mini notebooks has given way to a number of factors, including relative saturation following this boom cycle, recognition of their limitations, and better competition from both mainstream notebooks and media tablets, which increased 31 million and 17.9 million units in 2010 respectively versus just 1.3 million for mini notebooks. "Consumers are recognizing the value of owning and using multiple intelligent devices and because they already own PCs, they're now adding smartphones, media tablets, and e-book readers to their device collections," said Bob O'Donnell, vice president, Clients and Displays." And this has shifted the technology share of wallet onto other connected devices."

Consumers are also increasingly affected by the prolonged recession, affecting not just housing, employment, equity markets, and GDP, but also rising energy and food prices, relatively high debt, and tight credit, much of which hits directly at consumer discretionary spending. The potential boost to the PC market from thinner designs, longer battery life, instant on, touch, and other improvements will likely not be widely available until 2012, and will have to address price-sensitive buyers in order to drive higher levels of growth. In fact, the appeal of these future enhancements could be seen as another motive for consumers to delay the purchase of a new PC until they are available and to focus on other products in the meantime.

First-quarter-2011 PC shipments were down 1.1% from the prior year, with a decline of 4.4% in consumer shipments that was only partially offset by 3.0% growth in commercial segments. However, the decline in consumer shipments was particularly acute in mature regions, with double-digit declines in Western Europe, the US, and Canada. Relatively strong growth in the second quarter of 2010 is likely to keep second quarter 2011 growth low. This trend in consumer growth, along with only modest growth in the commercial sector, a cautious outlook from PC makers, disruptions including the Japan earthquake and nuclear disaster, the Arab Spring, and reduced economic projections (including government stimulus) will keep overall growth in single digits the rest of 2011.

Nevertheless, IDC expects significant growth in both consumer and commercial markets to continue beyond 2011. New designs, chips, operating systems, features, and services, along with falling prices will continue to make PCs more powerful, affordable, and functional than ever before. Despite incursions by smartphones and media tablets, PCs have a large user base and ecosystem, and continue to represent the most comprehensive and affordable computing platform. Adoption by new users in emerging regions as well as replacements in more mature markets will continue to drive double-digit growth through the end of the forecast.

"The PC market has definitely hit a slow patch," said Loren Loverde, vice president, Worldwide Consumer Device Trackers. "Nevertheless, the long-term growth drivers, first among which are growth in emerging markets, declining prices, and growing functionality, remain intact, and the product and design innovations underway will keep PC growth healthy in the long term."

Apple introduces iCloud

Apple has introduced iCloud, a breakthrough set of free new cloud services that work seamlessly with applications on your iPhone, iPad, iPod touch, Mac or PC to automatically and wirelessly store your content in iCloud and automatically and wirelessly push it to all your devices. When anything changes on one of your devices, all of your devices are wirelessly updated almost instantly.

The free iCloud services include:

The former MobileMe services – contacts, calendar and mail – all completely re-architected and rewritten to work seamlessly with iCloud. Users can share calendars with friends and family, and the ad-free push mail account is hosted at me.com. Your inbox and mailboxes are kept up-to-date across all your iOS devices and computers.

The App Store and iBookstore now download purchased iOS apps and books to all your devices, not just the device they were purchased on. In addition, the App Store and iBookstore now let you see your purchase history, and simply tapping the iCloud icon will download any apps and books to any iOS device (up to 10 devices) at no additional cost.

iCloud Backup automatically and securely backs up your iOS devices to iCloud daily over Wi-Fi when you charge your iPhone, iPad or iPod touch. Backed up content includes purchased music, apps and books, Camera Roll (photos and videos), device settings and app data. If you replace your iOS device, just enter your Apple ID and password during setup and iCloud restores your new device.

iCloud Storage seamlessly stores all documents created using iCloud Storage APIs, and automatically pushes them to all your devices. When you change a document on any device, iCloud automatically pushes the changes to all your devices. Apple's Pages, Numbers and Keynote apps already take advantage of iCloud Storage. Users get up to 5GB of free storage for their mail, documents and backup, the storage for music, apps and books purchased from Apple, and the storage required by Photo Stream does not count towards this 5GB total. Users will be able to buy even more storage, with details announced when iCloud ships this fall.

iCloud's Photo Stream service automatically uploads the photos you take or import on any of your devices and wirelessly pushes them to all your devices and computers. Photo Stream is built into the photo apps on all iOS devices, iPhoto on Macs, and saved to the Pictures folder on a PC. To save space, the last 1,000 photos are stored on each device so they can be viewed or moved to an album to save forever. Macs and PCs will store all photos from the Photo Stream, since they have more storage. iCloud will store each photo in the cloud for 30 days, which is plenty of time to connect your devices to iCloud and automatically download the latest photos from Photo Stream via Wi-Fi.

iTunes in the Cloud lets you download your previously purchased iTunes music to all your iOS devices at no additional cost, and new music purchases can be downloaded automatically to all your devices. In addition, music not purchased from iTunes can gain the same benefits by using iTunes Match, a service that replaces your music with a 256kbps AAC DRM-free version if it can match it to the over 18 million songs in the iTunes Store, it makes the matched music available in minutes, and uploads only the small percentage of unmatched music. iTunes Match will be available this fall for a US$24.99 annual fee. Apple is releasing a free beta version of iTunes in the Cloud, without iTunes Match, for iPhone, iPad and iPod touch users running iOS 4.3. iTunes in the Cloud will support all iPhones that iOS 5 supports this fall.

Apple is ready to ramp iCloud in its three data centers, including the third recently completed in Maiden, NC. Apple has invested over US$500 million in its Maiden data center to support the expected customer demand for the free iCloud services.

The iCloud beta and Cloud Storage APIs are available immediately to iOS and Mac Developer Program members at developer.apple.com. iCloud will be available this fall concurrent with iOS 5. Users can sign up for iCloud for free on an iPhone, iPad or iPod touch running iOS 5 or a Mac running Mac OS X Lion with a valid Apple ID. iCloud includes 5GB of free cloud storage for Mail, Document Storage and Backup. Purchased music, apps, books and Photo Stream do not count against the storage limit. iTunes Match will be available for US$24.99 per year (US only).

iTunes in the Cloud is available today in the US and requires iTunes 10.3 and iOS 4.3.3. Automatic download of apps and books is available today. Using iCloud with a PC requires Windows Vista or Windows 7; Outlook 2010 or 2007 is recommended for accessing contacts and calendars.

AVerMedia: Video remains the key trend

With Computex just around the corner, Digitimes decided to pay a visit to Taiwan-based video specialist AVerMedia to see what the company has planned for this year's show. President Allan Yang was on hand to tell us his thoughts about the company's direction and future trends in the wider industry.

As Yang explained, AVerMedia has specialized in video technology since its inception in 1990. The company's early products focused on overlaying multiple analog video streams, but as video editing went digital, AVerMedia moved into video cross-conversion. AVerMedia's products enabled the conversion of PC VGA output to TV signals and vice versa, and sold strongly in the educational sector in particular.

AVerMedia's next step was to bring TV signals to the PC, allowing digital recording of TV content and helping customers to get the most out of their existing equipment, something that Yang says is central to the company's philosophy. AVerMedia now offers a wide range of peripherals focused on streaming home content across different devices, with particular emphasis on integrating HD, digital broadcasting and the Internet. As Yang puts it, "Video anytime, anywhere - that's where we're going."

Yang is unequivocal in his enthusiasm for HD video. "We believe high definition is the trend. Once you've used HD, it's hard to go back to SD. It's simply more persuasive, more immersive." While AVerMedia first moved into HD video capture 18 months ago, the company's lineup recently took an intriguing turn after its products proved a surprise hit in the gaming sector - a development that even Yang concedes took him "a little bit by surprise."

When they looked into the situation more closely, the AVerMedia team was amazed at the sheer quantity of games-related video online, with literally hundreds of thousands of clips uploaded to websites such as YouTube and China-based Tudou. Further research showed that the Xbox360 and PlayStation 3 have a collective user base of around 100 million people, an enormous potential market. While most games consoles feature HD quality graphics, the video capture market was largely limited to SD, with the HD sector served exclusively by expensive professional products costing upwards of US$1,000. AVerMedia aims to fill this niche with a range of budget HD capture devices for gamers, to be launched sometime between now and August. Products will include an external PC-based capture solution with editing functionality, which passes video from the console through to the TV so the gamer can play on without interruption from the capture process; an internal video capture card for DIY enthusiasts; and a standalone box that keeps HD capture simple for console players that don't want the hassle of using a PC. The greatest selling point of these products is likely to be their price tag of around US$200, which Mr Yang says AVerMedia selected because the existing capture solutions cost far more than the games consoles themselves. As the first manufacturer to address this sizeable niche market, AVerMedia expects to see strong sales.

AVerMedia also makes a line of more professionally-oriented video capture products known as DarkCrystal. DarkCrystal products are compatible with Adobe Premier Pro and include a full software development kit (SDK), allowing the development of dedicated apps for direct integration with other devices. Potential users include the medical industry, where a thriving market in HD capture is emerging as doctors find themselves under increasing pressure to justify and document every aspect of surgery, in order to avoid lawsuits.

One of the hot topics at Computex this year will be tablets, and Allan Yang is looking forward to showing off AVerMedia's latest efforts on this front, which are perhaps best represented by the company's HomeFree range of "standalone network tuners". The HomeFree range combines either an analog TV tuner and a digital (DVB-T) TV tuner, or a pair of DVB-T tuners, with Wi-Fi connectivity, allowing a tablet user to watch one TV source wirelessly while a PC or laptop user watches another. Add in the household TV and that should be enough to avoid most family arguments about what to watch! Windows is naturally supported, while Mac OS support will come in June. The tablet end is implemented via a special app that even allows the user to switch channels and browse digital TV content guides. The app is currently only available for the iPad, but Digitimes was given a sneak preview of a forthcoming Android app with similar features. The HomeFree Combo model also builds in the company's IR Blaster technology and AV-in support, allowing PC/laptop users to control a DVD player once the HomeFree Combo has been set up to emulate the DVD player's remote control.

Given the booming market for tablets and HD devices, Mr Yang is unsurprisingly upbeat about the prospects for AVerMedia and the video market in general. So what will AVerMedia be working on in the coming year? "Video is the key trend... along with networks and HD. Combining these to produce new products." With digital convergence, HD video and tablets all the topics of the moment, this year's Computex will provide a welcome opportunity for companies like AVerMedia to show what they can do in a sector where attention is too often focused solely on a handful of big name brands. If the products Digitimes has seen so far are anything to go by, Computex should prove to be an exciting affair for visitors and exhibitors alike.

ARM to own 40% share in 2015 notebook market with help from Windows 8, says ARM president

ARM CEO Tudor Brown, during an exclusive interview with Digitimes, pointed out that he estimates that ARM will be able to take a 40% share of the global notebook market in 2015, helping the company to compete against CPU giant Intel.

In addition to notebooks, ARM will still maintain its leading position in the tablet PC market in 2015 with a market share of 85%, Brown estimates.

Brown pointed out that the ARM group has tried to launch ARM-based devices that share similar functionalities as notebooks, such as Smartbook, but demand from consumers was weak since consumers still have expectations for the devices to feature the same performance and compatibility as traditional notebooks, while consumers also found the Android operating system difficult to get used to.

With cooperation with Microsoft, Brown pointed out that both ARM and Microsoft believe their partnership will have a chance of creating a brand new demand driver. Without the chance, ARM may never be able to cut into the notebook market, Brown added.

Brown believes that notebooks in the future will be even lighter, convenient, cheaper and have longer running times, and all these features will just be standard features for a regular notebook product.

Brown pointed out that Intel's chips consume too much power and are easily overheated; therefore, Taiwan's hardware industry in the past has been investing to resolve PC heating problems and everybody's thoughts were on how to make products smaller, while reducing the heat generated by the CPU. With a chip that does not heat up easily, everybody can start putting their focus into creating other innovations, Brown added.

Monday, June 6, 2011

Asustek taking cautious attitude toward Acer dumping 3 million notebooks in Europe

As Acer has announced it will provide channels with US$150 million in sales allowances to clear inventory, sources from the notebook industry believe such action will result in close to three million notebooks from Acer with significantly low prices appearing in Europe's retail channels and could seriously mess up Europe's PC market status, while Acer's competitor Asustek Computer is also expected to be impacted. In response to Acer's move, Asustek has already taken a cautious attitude toward the upcoming effects.

As the company will declare losses of US$150 million hoping to return its business to a right track, Acer's second-quarter results are in grave danger of turning to losses, with market watchers estimating that Acer's EPS for 2011 might drop below NT$2 (US$0.07) and its stock price is also facing a crisis to maintain above NT$50.

With Lenovo also recently announcing plans to acquire Germany-based consumer electronics vendor Medion, helping Lenovo to achieve 14% share of Germany's PC market in the future, and becoming the third-largest PC vendor in the country, sources believe Europe's PC market in a short term will likely suffer from fierce price battles.

Commenting on Acer and Lenovo's actions, Asustek CFO David Chang believes if Acer's inventory is mainly previous generation products, it will not affect Asustek much, however, if the inventory includes the latest Sandy Bridge-based products, the impact will appear. To counter the moves, Chang pointed out that Asustek has already planned several measures for all possible situations and it should be able to minimize the impact. As for Lenovo's acquisition of Medion, since the strategy will help Lenovo raise its global PC market share by only 0.3%, the affect will not be significant in the short term, but for the long term, it is still hard to predict.

Chang also noted that Asustek is taking a cautious attitude toward the significant change in Europe's PC market ecosystem and in addition to the impact brought by Acer, Samsung Electronics and Lenovo are also competitors that Asustek is paying close attention to.

Asustek is currently seeing strong growth in Europe with its channel retail partners all having healthy levels of inventory. Compared to its competitors which have inventory levels of over 10 weeks, Asustek is maintaining its level at around 4-5 weeks, and the company will not recklessly cut its prices to compete for market share.

Sources from notebook players pointed out that Acer's strategy of cutting prices to compete for market share will give its competitors strong pressure, but the affect should be just short term, and Acer should return to the right track after digesting all its inventory. Therefore, most of Acer's competitors are expected to take a wait and see attitude over the situation.

Computex 2011: The rise of mobile projectors

ndustry leading firms Acer, Asustek, and ViewSonic have been entering the market for micro and mobile projectors to showcase mobile projecting systems with brightness up to 200 lumens.

According to Japan-based Techno System Research, the market size for micro projectors will expand to 70 million units worldwide by 2015. Pacific Media Associates, stated the global annual output value of micro projectors will reach US$1.76 billion by 2014. Liquid crystal on silicon (LCoS) micro projector component manufacturer, Syndiant, also predicted the annual shipment of micro projectors to reach beyond 100 million units in four years.

Although the market has not been expanding as fast as expected, many firms are still optimistic about growth. Firms such as Taiwan-based BenQ, Optoma, Aiptek, Vivitek, and South-Korea based Samsung all have been developing micro projector applications.

There are two types of micro projectors: independent projection systems with a single projector and embedded module types for handsets and mobile devices. The former type is bigger in size and can connect to other systems for integrated use. It is predicted for single type micro projectors to grow over 3.1 million units by 2012.

As for the embedded module type projectors, energy consumption, size, brightness, and price all need to be improved and adjusted. Once the adjustments have been made, sales are expected to explode and exceed the sales of single type projectors by 2013.

The brightness of the projectors, life-span of batteries, and high prices have been problems for micro projectors.

Firms such as Acer, Asustek, and ViewSonic have been improving these problems and are showcasing their latest LED micro projectors at Computex 2011. All three firms adopt digital light processing (DLP) technology from Texas Instruments to increase brightness up to 200 lumen. The size of LED micro projectors is slightly larger than other pocket projectors and they need an external connection to a notebook or other device to lower the weight of the built-in battery.