Global Industry Trends Oct.-Dec., 20172018/07/17

 

1. Information and communications industry

l   Silicon Wafer Supply and Expansion Conservatism Becomes the Reason for Increased Prices

End market electronic products enhance wafer businesses for two reasons. The first is that the demand for data computation by these devices has increased. The second is that their features have grown more complex. According to TrendForce’s statistics, 2018 currently has the largest scope of silicon wafers being used in end market electronic products. Smart phones have grown by 5% over the year, and aside from the small decrease in the PC market (NB/DT/Tablet), the other markets have shown a growth rate, and overall, the demand is showing an obvious increase.

As for the supply end, SUMCO and its subsidiary Formosa Sumco Technologies used the de-bottlenecking method to add 135,000 wafers, making up 2.6% of the global total. Although Shanghai’s Xinsheng has a plan for 12 inch production capability, it has to pass a certification test, so its overall impact on the market is limited. Other companies like Wafer Works and Global Wafers have continued to focus on the expansion of their 8-inch (or less) production capability. Overall, the increase in capacity on the supply end has grown less than demand has, so wafer prices were more or less steady.

l   The Development of Biometrics is Android’s Main Direction

Although Apple first opened road for mobile phone biometrics technology, 2016 and 2017’s fingerprint recognition technology penetration showed that overall, in the 40 to 50% of shares represented by fingerprint recognition, the share of iPhone’s Touch ID did not even comprise half. Therefore, if the market is to be opened, Android must enthusiastically catch up, and the progresses of related key suppliers must be observed. Among these technologies, Synaptics’s Natural IDTM FS9100 optical fingerprint recognition technology is already leading. It has also been selected for the CES 2018 Innovation Award and may enter the market along with China’s first line customers in the end of 2017 or the beginning of 2018. In addition, Egis Technology, Taiwan’s large fingerprint recognition producer, recently stated that it has also already started sending samples to fingerprint recognition customers and is confident that it will begin producing in the second half of 2018.

Another matter that deserves attention is the Xiaomi sales group report on recent year’s Indian market. In the third quarter of 2015, Xiaomi’s sales numbers in this market climbed to 1 million. In the third quarter of 2016, the shipment number had climbed to 3 million, and in the same quarter of the following year, that number increased greatly, to 9.2 million. Due to the fact that most Xiaomi devices have fingerprint recognition technology, the entrance of these devices into India will bring great advantages to fingerprint recognition technology producers.

l   Qualcomm announces 5G patent licensing fees. The first set of 5G phones is set to come out in 2019.

Global mobile chip producer Qualcomm already announced the details of its patent licensing agreements for 5G technology. According to the Qualcomm 5G basic patent licensing plan, single 5G mobile phone patent royalty rates will be 2.275% of the selling price. Multi-model (3G/4G/5G) licenses will have rates of 3.25%. These patent licenses’ usage terms can be applied to OEM brand mobile phones across the entire world’s market.

Qualcomm points out that the general terms of its 5G patent licensing agreement are the same as the ones that are used for more than 150 of its 3G/4G clients since 2015. In the future, Qualcomm will provide 4G follow-up version license agreements, and the first 5G license agreement. Also, special license fees used under these types of agreements will not increase. 5G communication networks will begin business transfer in 2020, and the first batch of 5G phones will begin business use in 2019.

Likewise, Ericsson, a company that is also doing hard work in the 5G market, is using a different method in its 5G license plans. The director of the Ericsson intellectual property rights department, Gustav Brismark, has leaked the fact that Ericsson’s license fee for high-end hand held equipment will be no more than 5 USD. The license fee for low-level hand held equipment will be no less than 2.5 USD. However, Ericsson’s 5G license fee only covers 5G-necessary cases for technology standards and does not include application cases.

2. Pharma & biotech industry

l   Development of Medical Artificial Intelligence Technologies in China

The application of artificial intelligence in the medical field currently extends to health management, auxiliary diagnosis and treatment, medical imaging, pharmaceutical mining, nutrition and hospital management, virtual assistants, etc. In the December 2017 world internet conference, LinkDoc showed the Hubble AI decision support. Using AI and big medical statistics core technologies and the cooperation of more than 500 general and specialized hospitals, China’s largest online tumor treatment information center was created, paving the way for the development of its Clinical Decision Support System. Tencent also announced the enlarging of efforts being put into the medical health field. An AI lab was also established, and the first overseas lab was established in Seattle, U.S.A. Recently, at the 2017 Hanzhou Computing Conference, Alibaba also announced that it would be strengthening its overall efforts in the health industry via its health subsidiary company, Ali Health, between 2018 and 2020. Its main goal is to establish an AI based imaging platform that helps hospitals diagnose and treat their patients more effectively. In the near future, Alibaba will also create platforms that collect and store patients’ medical records using blockchain technology, accumulate big data, and strengthen clinical support policies.

l   The First Approved Novartis CAR-T Treatment Method in the World

The Novartis CAR-T (chimeric antigen receptor T call) treatment product Kymriah (tisagenlecleucel) has recently obtained U.S. FDA approval, thus becoming the first approved type of CAR-T treatment method in the world and reached a new milestone for cancer treatment.

Kymriah’s use is for refractory/relapse B-cell precursors acute lymphoblastic leukemia (r/r B-cell ALL) in people ages 25 or younger. The standard chimeric antigen receptor is protein CD19, and includes 4-1BB co-stimulation zone to strengthen chimeric antigen receptor performance and sustainability. There are about 5,000 people a year in the U.S. who are diagnosed with Acute Lymphoblastic Leukemia (ALL). Among these, about 60% are under age 20, and 80~85% are of the B-cell type. From the standpoint of the treatment results, there is about an 85% treatment rate. Also, 15 to 20% of children and teenagers will have the disease return. The stem cell treatment method only has a 15% survival rate after 2 years. ALL is the leading cause of death by disease for children and teenagers.

Despite the fact that Kymriah has excellent results in the clinical trials, it is predicted to have difficulty in gaining market access. Novartis announced that the price may be as high as 475,000 USD per treatment. This price includes the sales revenue that Novartis hopes to achieve and the necessary resources for Kymriah, R&D costs, REMS execution, long-term medicinal treatment follow-ups, etc. If 450 people used the Kymriah treatment method every year, using the similar clinical endpoints of the B2202 trial as the standard of effectiveness, the medical costs could be as high as 170 million USD. Therefore, the market accessibility and actual revenue of Kymriah will be limited by the economic conditions of families and the actual coverage given by those in the insurance industry (including amounts and prices).

l   ESMO Observes the Newest Developing Trend in Cancer Medicine

ESMO, along with ASCO and AACR, have attended one of the largest Cancer Medical Oncology meetings in the world. In the meeting, the medicine development results that were stated all impacted the pharmaceutical market’s competition patterns.

Observing the newest trend of ESMO 2017: (1) AstraZeneca has obtained large gains in lung cancer medication. The revenue from this is predicted to make up for the losses caused by Imfinzi’s previous failure in first-line non-small cell lung cancer treatment, allowing AstraZeneca cancer prevention and treatment medicine to have an opportunity to enter the lung cancer area. (2) Merck & Co’s Keytruda announced the statistics of many clinical trials. Among those, reports focused on late-term urothelial carcinoma, non-small cell lung cancer, and late-term melanoma trials were published. (3) Opdivo and Yervoy’s combined first line treatment test, which focused on late term and migratory renal cell carcinoma, has shown that combined treatments are objectively more effective than sunitinib groups (ORR 41.6% vs. 26.5%). In comparison, sunitinib, Opdivo, and Yervoy can significantly decrease the risk of death by 37%, giving Opdivo an opportunity to expand into migratory renal cell carcinoma first line treatments. (4) Roche’s PI3K suppressant Taselib has shown new results that should be noticed in the field of breast cancer treatment. In the field of migratory breast cancer, the LORELEI test produced the effect of PI3K suppressants detecting breast cancer in its early stages.  However, because LORELEI trials are the clinical second term, their clinical advantages and safety have to be followed up with larger scale clinical third term test confirmations.

3. Fintech industry

l   Japan Pushes Digital Currency to Cope With the Mobile Payment Wave

Through analysis of statistics behind mobile payment, the spending habits of consumers can be understood, as well as their habits, and their use circumstances. Then, a link with the industry can be established to execute accurate marketing. Therefore, following the development of mobile payment technology, all kinds of internet money management tools and methods have emerged. For example, Alipay and WeChat have both aggressively expanded to the whole world. According to the statistics of the Chinese Ministry of Information and Industry Technology, the scope of Chinese mobile transactions has already reached 81 trillion RMB.

Recently, the Bank of Japan announced that a new type of digital currency will be pushed for the 2020 Tokyo Olympics (tentatively named J coin). This is being used as a method to protect the financial system and enterprise development. This plan will be a cooperation of the Mizuho Financial Group and the Japanese post office, along with many banks and financial groups. Currently, this plan has already obtained the approval of the Central Bank of Japan and the financial surveillance organization. J coin will be actualizing currency exchange into Japanese Yen, and can be tied to one’s bank account. Since J coin will be “the digital version of national currency” and is connected to the value of Japanese Yen, consumers can use an app to directly withdraw money from their bank accounts. J coin can also be used at convenience stores and in restaurants. Users can also transfer money between accounts. If the plan is successful, it will quickly push Japan into the “cashless” age.

l   Biometric Applications Gradually Enter the Consumer Market

Biometric technology has matured over many years, and its biggest universal breakthroughs are limited by cost and hardware issues. After the more difficult problems are solved, biometric recognition technology has the potential to bring even more benefits, safety, and convenience to consumers. This is especially true for the financial transaction applications which are set to co-exist and develop along with biometric recognition technology. For example, after fingerprint recognition goes through many years of mutual support with mobile payment technology, great opportunities will be created for wafer producers.

Recently, the Apple iPhone X brought up the hot topic of facial recognition payment applications, and now many supermarkets and stores are fervently testing “unmanned stores” and inviting consumers to test their technology applications’ maturity as well as their convenience. Since biometric facial recognition or iris recognition does not require the user to touch the equipment, the technological application is more suitable for use in smartphone mobile payment apps or intelligent debit cards. It is predicted that in the future, facial, iris, fingerprint, vein, and other touch-free biometric recognition technologies will be in wide use at ATMs, stores, and other public places.

4. E-commerce industry

l   11/11 Product Companies Set Marketing Strategy for China during This Important Holiday.

11/11, from its inception until now, has become the biggest driver for Chinese e-business. The scope of the sales is large enough to move international brands to set a marketing strategy for the Chinese market during this important holiday. The influence extends from Chinese e-businesses to global retailers. Many platforms compete with each other in their goals of sales expansion, platform statistics, logistics, and marketing.

Alibaba, based on its large flow and complete online environment is firmly atop the Chinese e-business chain. JD.com is in a close second, using cooperation with websites to expand and complete its business short board. For example, JD.com established a fashion industry department in 2017, investing in global luxury e-business platform Farfetch and cooperating with Fashion media ELLE to push the fast service of an express delivery service. Afterwards, there will also be a luxury product platform established called TOPLIFE.

The announcements of the two big e-business companies’ “new retail” and “border-free retail” strategies, which have become the centers of attention during the 2017 11/11 holiday, both emphasized online, offline channels and used the combination of technology and the consumption scene to obtain orders. This includes consumers browsing online and their buying offline, or consumers experiencing the store offline and then buying online. No matter which method is used, all types hold consumer action statistics at their cores so that the “many consumption” paths idea can be enacted. Aside from combining the paths, due to the fact that the large single-day transaction amount creates an overly large load and logistical paralysis, e-businesses have begun to expand the 11/11 period using sectional marketing to ease the logistics problem and extend marketing effectiveness.

l   JD.com Brings In Robotic Vision to Create an Intelligent Logistics System

Chinese e-business JD.com is fervently developing intelligent logistics, expanding its stores system, and using advanced artificial intelligence technology to decrease costs. In 2016, JD.com established the “X Affairs Department” to put effort into intelligent logistics research and development. Even now, it has developed an unmanned warehouse and unmanned machines and cars as three supporting pillars of intelligent logistics. Among these, the unmanned warehouse has brought in 3 types of robots: a large mover, a small shuttle car and a robotic selector.

One of these unmanned machines represents area-wide air logistics, which is an area that logistics industry insiders must compete for after ground logistics is increasingly perfected. Along with Amazon, UPS, DHL, Mikawaya (Japan) and other logistics courtiers, new efforts are put into developing unmanned delivery, fully automated packaging and loading, automatic take-off, automatic cruise, automatic landing and unloading, and automatic return processes which have almost no need for human effort; fully automated, unmanned delivery will soon be able to be realized.

JD.com’s innovative lab has stated that among its unmanned JDrone and unmanned JDrover, the JDrone is about to enter into high-altitude delivery. However, the unmanned drones and cars in use now still have to solve the problems of human face recognition and traffic light obedience. Therefore, JD.com and NVIDIA are cooperating in the AI field and have brought in Jetson supercomputing modules on their unmanned cars to actualize robotic autonomy. Due to the fact that Jetson can provide deep learning and vision capability as well as the advantages of small size and low energy cost, it is predicted that after JDrone and JDrover are brought in, they will have human facial recognition capability and be able to follow traffic lights and pedestrian lights, along with other capabilities that allow them to operate on the more complicated roads of the cities.

5. Startups industry

l   Inkjet Solar Battery Creates a New Energy Source

A new French solar energy company called Dracula Technologies has started development on a sticker solar battery that is made from a unique conductive plastic. This battery is used to capture outdoor solar power or indoor artificial lighting energy. Traditional solar batteries use silicon wafers to capture solar energy. According to current experiments on silicon-based solar batteries (not silicon air batteries), the efficiency of mono-silicon battery is 25%. Poly-silicon batteries have efficiencies of 20.4%. CIGS film batteries have efficiencies of 19.8%, CdTe film batteries have efficiencies of 19.6%, and a-Si batteries have efficiencies of 10.1%. The Dracula Technologies Group started development on capturing more wavelength-scale conducting plastics. This technology is called “LAYER” and is formed from 5 print layers. The most central layer is the photosensitive layer which is covered by a semiconducting layer. This layer helps the conductive color ink that is printed on the outside extract charge. Scientist Sadok Ben Dkhil stated that mainstream direct light intake silicon materials cannot win over the energy capture scope of this kind of semiconducting materials. Also, film batteries have the advantages of being light, toxin-free, foldable, and having low production costs.

Current technology can print 5cm-width square battery modules within an hour; color and shape can both be customized. This means that with objects with more exposed area, such as home curtains, electricity can be provided for lights, air purifiers, and other small home electronics. Dracula Technologies currently prints 30cm (length and width) square solar battery boards and is also looking for a way to further reduce the solar battery charging time.

l   Global Manufacturing Industry Increases Investment in Automation, and Large Japanese Robot Producers’ Sales Reach a New High

The Japan Robot Association (JARA) released statistics for January to September 2017 (including Fanuc, KUKA, ABB, Yasukawa Electric Corporation, and other JARA members). Due to the increase in global market demand for industrial robots driven by industry 4.0 and smart manufacturing, (especially EMS demands from China’s production of smartphones and other products), the number of industrial robots produced in the third quarter of 2017 has increased by 49.3% to 56,258 from the number in the third quarter of 2016. Also, this number has been continuously increasing for 17 quarters. As for the revenue from industrial robot sales, the amount gained in the third quarter of 2017 was higher than the third quarter of 2016 by 39.9% at 195.9 billion Yen. This number has been increasing for 5 seasons, creating a new record.

According to JARA’s third quarter statistics, revenue from exports to other countries (except China) has been continuously increasing. Exports to the United States have increased 13.6% to 27.43 billion Yen. Exports to Germany have increased 46.8% to 13.19 billion Yen. Exports to Korea have increased 20.9% to 7.78 billion Yen, and exports to Taiwan have increased by 79% to 5.19 billion Yen. This is mainly because the demand for automation of production line equipment from the EMS field or other production industries has greatly increased.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Department of Economic Development, Taipei City Government

Publication Date: January, 2018

 



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