The COVID-19 pandemic has undersocred the world's over-reliance on China's manufacturing capacity, and accelerated the diversification of the global supply chain, with many firms seeking to building or already building more manufacturing plants in South East Asia. Such a "China+" production diversification strategy presents the nultinational corporations (MNC) with plenty of new opportunities and challenges - in terms of operation, compliance and environment.The China+ strategy has already been implemented by many manufacturers in order to counter increasing labor costs in China and the problems surfacing during the US-China trade war. Now the pandemic bodes a new era for manufacturing, where China and ASEAN will integrate more to a certain extent, accelerating recovery of the regional supply chain.The ACFTA signed between ASEAN and China effectively reduces the costs of accessing Chinese suppliers from ASEAN and improves efficiency in production. Manufacturers in the ASEAN region can import raw materials and components needed without paying extra tariffs or going through unnecessary external obstacles.The cooperation between China and ASEAN is significant because ASEAN is a main supplier of semi-finished goods that are shipped to China for final processing for exports to the Western countries. In the other way around, China provides raw material and components to ASEAN manufacturers. It's natural to that many companies, such as those from Japan, are diversifying investment risks in Asia by investing in both China and ASEAN.China and ASEAN are now more interdependent than ever. Without trade with ASEAN and its supply chain, it's almost impossible for the Chinese economy to fully recover from the pandemic. The regional value chain connecting both sides is also on track to recovery.ASEAN, with its geographical proximity, has been deepening its relation with China over the past two decades, and became China's biggest trade partner in 2020, with the total trade value hitting CNY4.74 trillion (US$ 731.9 billion) and growing 7% on year. China, for 12 consecutive years, has been ASEAN's biggest trade partner, too. Despite the pandemic, the great potential and resilience between the two trading partners has sent out quite a positive message to the world regarding global trade.The Southeast Asian economy revolving around China has long been the epicenter of manufacturing and providing huge economic momentum for the global economy.As for now, it's not easy for businesses to leave China. There's still a lack of skilled labor, supplier network, and logistics infrastructure in the ASEAN countries, which will take years to catch up. However, businesses embracing the "China+ASEAN" strategy can better accommodate themselves in the face of rising labor costs and the tension between the US and China.Relocating the supply chain will incur some direct costs. There are also pros and cons over setting up operation in destination countries, and the production ecosystem is only getting more and more complex. The pandemic has led businesses to develop more localized production, but localization could diminish competence of business, bring up consumer prices, and render business more vulnerable to regional shocks like natural disasters or socio-political upheavals.

In view of intensifying US-China confrontation and Taiwan actively promoting its New Southbound Policy, many Taiwan-based suppliers intend to meet increasing capacity demand by relocating manufacturing to Southeast Asia and building new industrial clusters there to tap the demographic and geographic advantages as well as rapidly growing market demand in the region. They look to replicate their experiences in China and make Southeast Asia the next world factory that will support rising needs as the global supply chain makes transitions to accommodate "G2" (US vs China) developments. Vietnam and Thailand, neighboring China, will be Taiwan-based suppliers' first choices for their move into Southeast Asia, followed by Malaysia, Indonesia, and the Philippines. They will not include Laos, Myanmar and Cambodia in their consideration due to political instability in those countries unless they have no other choices.Some suppliers note that manufacturers choose to build new production bases in Vietnam and Thailand in part for their transport infrastructure. Being able to transport goods via their road networks will make up for the incomplete supply chain ecosystems in Vietnam or Thailand.The shift to regional manufacturing has given rise to the new trend - short supply chains. The supply chains in Vietnam and Thailand are near completion after years of effort. Furthermore, component suppliers' added demand in recent years are largely for automotive and home appliance parts, rather than ICT devices and applications, which allows them to better connect with Thailand's local industry development. Vietnam and Thailand are therefore the ideal choices for Taiwan-based suppliers foraying into Southeast Asia.Recent macro-environment changes are driving an increasing number of suppliers to invest in Vietnam. This is beginning to spur a rise in land costs and an imbalance in labor supply and demand, according to industry observers. In particular, small- and medium-sized suppliers not only face difficulty in land acquisition but also have to compete for human resources with large enterprises that can offer more attractive compensations and benefits such as Samsung Electronics and Foxconn. Suppliers planning to set up operation in Vietnam need to take a lot of factors into consideration.Thailand will be more suitable for some small- and medium-sized suppliers as it has a substantial number of migrant workers that can provide a relatively more stable labor supply. Labor turnover has also improved thanks to its recent economic developments. The Thai government has been offering incentives to drive developments in motor vehicle and electric vehicle (EV) parts as well as EV batteries, which overlap with the areas Taiwan-based manufacturers are actively expanding into. This is another factor that makes Thailand appealing to Taiwan-based suppliers.Many suppliers indicate that the COVID-19 pandemic has forced them to put off or suspend their plans to move into Southeast Asia. When they strategize about building new production bases in Southeast Asia, aside from customer requirements and supply chain considerations, they should also gain an understanding of what preferential treatments and investment incentives Southeast Asian governments may be putting forward to attract manufacturers looking to set up production outside of China as there are all kinds of different offers on the table, industry observers say.

Global supply chain restructuring that is being accelerated by the US-China trade war and the COVID-19 pandemic gears toward two directions in view of geopolitical factors: "China+1" - the business strategy to still tap the China market but diversify production to other countries to avoid punitive US tariffs on Chinese goods; and "China-free" - the initiative to drive self-sufficiency to counter China's dominance and protect national security.The two considerations centered around China mirror something that everyone will agree: the risks of excessive concentration on China have outweighed the benefits of maintaining the status quo. China+1 will be a likely choice for most vendors based in Taiwan, a small-to-mid size economy lacking resources and isolated from the international community. However, as Taiwan is caught in the middle of a geopolitical wrangling between the US and China, vendors also may as well go with China-free at the right time.According to Foxconn chairman Young-Way Liu, the manufacturing supply chain is to transition from the model where production bases are clustered in China - the world's factory - to regional production. Foxconn's proportion of production capacity outside of China now stands at 30%, up 20% since June 2020. It is diversifying more manufacturing to Southeast Asia, India and the Americas, each of which will have an individual manufacturing ecosystem.Getting caught up in the power play between the US and China, Taiwan needs to please both sides. As semiconductor becomes a key battleground in the US-China tech war, TSMC plays a strategically important role and has been "requested" to build a 5nm wafer fab in Arizona. This is an example of the China+1 strategy. Barred by the US government from supplying semiconductor chips to Chinese companies on the Entity List, Taiwan-based makers have no choice but to adopt China-free planning.But Taiwan's ratio of exports to China has not decreased but has increased instead although Taiwan's New Southbound Policy has been in place for more than four years and Taiwanese investment in China has begun to decline due to the US-China trade conflict. According to the Ministry of Finance's Summary of Exports and Imports, Taiwan's exports to China and Hong Kong in the first three months of 2021 represented 42.9% of Taiwan's total exports, up 2.6pp from the ratio of 40.3% in 2011. The year-over-year growth registered at 35.5%.Share of Taiwan's exportsSource: Government, compiled by Digitimes, May 2021Taiwan's ratio of exports to the US also climbed 2.3pp to 14%, growing 24.1% year-over-year. The value of Taiwan's exports to Europe and ASEAN countries also showed growth but the ratios declined 1.7pp and 0.4pp respectively from the corresponding period of last year.Why do Taiwan's exports to China and the US both show double-digit increases? Many observers attribute the trend to makers' China-free planning. As a matter of fact, China's supply chains are trying to find alternatives to American products, shifting toward US-free. The two large economies are decoupling, each striving for self-sufficiency. They are bound to see supply falling short of demand. Situations such as overbooking due to lack of information transparency or overstocking amid shortage concerns are inevitable.It should be noted that China's protectionism has driven the formation of China+1 supply chains in some market segments. However, it's Chinese firms that are the winners that take it all. The No. 1 complaint that US Chamber of Commerce and European Chamber of Commerce members raise in their annual surveys is the barriers to market access. According to the 2019 McKinsey Global Institute (MGI) report, in the case of solar panels, high-speed rail, digital-payment systems, electric vehicles (EV) and container ships, Chinese players account for more than 90% or even 100% of the domestic market.Shirley Lin pointed out in her article published by Brookings Institute that Taiwan's continued success requires economic diversification of products and markets. Not only must Taiwan maintain leadership in semiconductor, but it also has to reduce its reliance on China. Moreover, it's imperative for Taiwan to enter into a bilateral free trade agreement with the US and to integrate into the international community, such as joining WHO and CPTPP. This requires support from democratic countries and the international community. Otherwise, Taiwan by itself has difficulty countering China's gravitational pull.

Global server shipments, after reaching the peak of 2020 in the second quarter, are estimated to have slipped 6% sequentially in the third quarter and to drop another 12% in the fourth quarter, as a result of the coronavirus pandemic disrupting the buying pattern, according to Digitimes Research.Amazon will be the only datacenter operator to continue seeing shipment growths in fourth-quarter 2020 due to its cloud computing datacenter infrastructure expansions and increased procurement of servers for the e-commerce business.Server shipments will drop over 10% in the fourth quarter as most datacenter operators and brand vendors have decelerated their order pull-ins since the start of the second half due to high inventory levels already built in the second quarter. The lingering pandemic has hit hard Europe and North America, with datacenter operators delaying their server installation and testing there. Local enterprises are also cutting their procurement of servers.Intel, which was originally set to unveil its next-generation Whitley server platform at the end of 2020, is unlikely to begin volume production for the new CPUs until after first-quarter 2021. Server clients have decelerated order pull-in to wait for the transition to be completed with the replacement trend unlikely to take place until the first half of 2021.Of the top-4 US-based datacenter operators, Microsoft was the keenest on pulling in orders in the second quarter and saw its shipments pick up over 45% sequentially in the quarter. However, with serious double-booking and many of its large-size datacenter construction plans being suspended, Microsoft is expected to have the sharpest shipment decline in the second half of 2020 compared to the first, according to Digitimes Research's latest findings.Facebook and Google both increased server shipments in the third quarter due to demand from their online multimedia and cloud computing AI platforms. However, the two datacenter operators will slow down the pace of orders pending Intel's transiting to the new CPU platform. The two still have inventory needed to be digested. As a result, each of them will see a sequential shipment decline of around 10% in the fourth quarter.Amazon will be the only top-4 cloud computing service provider to see sequential shipment growth in the fourth quarter as the company's server orders for the first half were milder than those of its fellow companies. Amazon has strong demand for servers due to expansion plans.In addition to demand for e-commerce services because of stay-at-home activities, Amazon also sees demand from year-end holiday shopping in Europe and North America. With many physical retailers shifting their promotion activities online, Amazon also postponed its Prime Day promotional campaign to the fourth quarter and should boost the company's demand for servers.Amazon's key ODM partners including Foxconn, Quanta Computer and Inventec, are expected to benefit from the server orders and see better-than-expected financial performances in the fourth quarter.

Global notebook shipments are forecast to rise at a CAGR of 0.9% from 2020 to 2025, according to Digitimes Research's latest five-year forecast for the notebook industry.Stay-at-home activities in the wake of the coronavirus pandemic have been driving robust shipment growth for the notebook industry in 2020. The pandemic is likely to linger in 2021, with stay-at-home activities becoming the new normal to continue sustaining notebook shipments. But notebook shipments in 2021 are expected to stay flat only from a year ago due to the weakening global economy and reduced stimulus subsidies.With lockdowns eased, shipment momentum in 2022 and 2023 is expected to weaken, but competitions among CPU platforms will become fiercer. Notebooks based on AMD's 5nm processors and Arm-based solutions are expected to be more competitive in price/performance ratios.The notebook market will see a new round of replacement demand in 2024 and 2025.Chromebook shipments are expected to surpass 30 million units in 2021 thanks to demand from the global education segment and emerging markets. The Chrome-based devices are also expected to see stronger shipment growth than Windows-based consumer and enterprise models, Digitimes Research's forecast figures show.With AMD, Apple, MediaTek and Qualcomm all developing processors for notebooks, Intel CPUs' share of worldwide notebook shipments is expected to slip below 70% in 2021. The proportion of notebooks featuring touchscreen functions will also break 20% of overall volumes in 2021 as the functionality is a standard specification for Japan's education procurement projects and Microsoft's Surface series products.

While many still believe the US-China tech war will be over along with the end of the US presidential election, most China experts at US think tanks believe it will be difficult for the two superpowers to return to their pre-trade war relationships.Alex Capri, a senior fellow at the National University of Singapore, and a research fellow at the Hinrich Foundation, believes the US-China confrontation will extend from the technology sector - which he describes as ground zero - to other areas. During a recent interview by Digitimes, Capri - a former partner and regional leader at KPMG's Asia Pacific Trade and Customs Practice, and a former international trade specialist with the US Customs - explains what he calls "techno-nationalism" in the US-China disputes and analyzes post-pandemic and post US-election development for the global supply chain.Q: The US-China technology cold war is intensifying. Do you think their confrontation is going to expand to other fronts?A: Yes, I think so. There are strategic industries that will inevitably decouple. It doesn't mean all trade will cease. But there will be significant bifurcation of trade between the US and China around strategically sensitive issues.The technology sector is of course, ground zero. When we talk about industries of the future, foundational and emerging technologies, we will see export controls and weaponization of supply chains on the US side, expand beyond hard technologies such as semiconductors, and focus increasingly on data.How data is extracted, who has access to data, and so on, is exactly what we've seen now with WeChat and TikTok and the Trump administration's executive orders last week. I expect that these executive orders will expand to cover the parent company of WeChat, TenCent, and the BAT - Alibaba, Baidu and Tencent - companies, in general. Any major Chinese digital platform company is now fair game for different kinds of sanctions and controls.There are multiple facets to what I referred to as "techno-nationalism." There is the "national security" element, which involves technology or data and whether it is harvested or used to endanger national security, in some way, or whether it is related to military, defense, or cyber intrusion and cyber security. Whether it is cyber espionage or corporate espionage, theft of IP - all of these things are now directly tied to national security and tethered to the use of technology. Then there is the economic side of techno-nationalism, where countries promote their national champions. From an economic standpoint, this is a mercantilist kind of view of the world. This view is accelerating fragmentation and decoupling in global value chains. The third element of techno-nationalism involves the use of technology to suppress, or promote ideological and political values using different kinds of technologies. For example, how is technology used to protect or infringe data privacy, or, to censor, to suppress information, to conduct surveillance of populations, or to produce fake news - essentially, propaganda. This clash of values is now central to the ideological systems involving China and the US and liberal democracies, in general. How technology is used or may not be used, is going to dictate which business relationships and transactions are acceptable and which ones are restricted. We are seeing this play out through the imposition of export controls, and, more and more, companies being put on restricted entity lists. That is all playing out.Q: Yes, it's essentially the struggle between the different ideological values of China and the US. In Taiwan we are paying much attention to the semiconductor industry. There was a report from Wired, saying that there was a hacker attack on some of the high-tech companies in Taiwan. How valid or credible do you think it is?A: I don't doubt that. Although I don't have specific proof for this. But it is such a strategic industry. It is absolutely vital for the CCP (Chinese Communist Party) to try to catch up, because semiconductors is an Achilles heel for China Inc. There are still no Chinese companies that can produce state-of-the-art microchips. The latest move of the US to close the loopholes regarding the "foreign produced direct product rule" now prevents third parties in overseas jurisdictions from selling semiconductors to Huawei and Hisilicon, if those semiconductors are made with US manufacturing equipment, and/or US software and IP. As you know, TSMC has announced they would no longer supply Huawei and Hisilicon. That scenario, in the future, can potentially hit Alibaba, Tencent and Baidu as well, because their hardware infrastructures also require US semiconductor technology and there are no viable substitutes.Since the trade war began in 2018, there has been an exponential increase in corporate cyber-attacks in virtually all sectors. So, semiconductor industry would be a major target for cyber espionage at this point.Q: Can Alibaba, Tencent and Baidu also be impacted by the export restriction of semiconductors?A: They could be. So far there are still many companies that have not been put on the entity lists, such as SMIC. And certainly Alibaba, Baidu and Tencent are vulnerable. One might ask why the US administration would consider doing that, because these (TikTok and WeChat) are social media platforms, and they have a tiny market share in the US. The argument is: yes, that maybe true, but they are part of the China Inc ecosystem. From the techno-nationalist point of view, it's part of that economic footprint, ideological footprint, and security-risk footprint. Those companies are building cloud, digital infrastructure, and, not to mention that Tencent is building the blockchain infrastructure for the Chinese government for its cryptocurrency, or the e-renminbi. That is a very strategic geopolitical move on the part of Chinese government, as it tries to decouple from the US dollar. Again, in order to achieve much greater financial independence, they will continue to pursue their geopolitical objectives, including making the renminbi the primary currency of international trade with their regional trading partners. This is part of the much greater geopolitical rivalry that's going on, and so any of these companies, from a techno-nationalist standpoint, are vulnerable, and they are fair game for US sanctions and other export controls.Q: You shed light on the Eastern Asian Currency Initiative in your previous paper. It seems lately China has been ramping up speed testing their cryptocurrency. It will soon expand the trial to other major cities in key areas and ready for launch. How soon do you think we will see the decoupling of the e-renminbi and the US dollar?A: That's a difficult one to answer. It's not going to be that easy, because the US dollar is by far still the dominant currency, accounting for more than 60% in central bank reserves all over the world. But a certain group of countries are supportive to China's efforts to move to a digital currency, that would include the Iranians, the Russians and the North Koreans, and, to a lesser extent, EU companies that have become collateral damage to US sanctions against, for example, Russian entities. Essentially any country that would be subject to US sanctions would want an alternative currency. Since the dollar is the primary currency used in most trade, especially commodities, countries like Iran and Russia, which are rich in natural gas and oil, are stuck using the dollar. If they are using the dollar, that transaction can be traced all the way back to the US banking system. And the US government can impose sanctions on those banks, as well as those parties that are involved. So I would answer that Beijing would decouple from the US dollar as quickly as possible. If they are successful, this will further decouple and drive the world into more fragmented trading blocks. And you have to ask, if a trading block is held together with the renminbi, are the values of the Chinese companies going to be pre-dominant? Most likely that would be the case. That brings a very interesting counter measure from the US, that is: does the US government start to promote using Libra or other convertible currency, because it is directly and freely convertible to the US dollar?The other thing that is interesting is that, if one looks at the business model of the BAT companies, they are innovative not because of unique technologies, but because the technologies they are using are ubiquitous and even built on western open-sourced platforms.We are now seeing social media firms in the US starting to adopt models of their (BAT) payment platforms for all kinds of reasons. They kind of encircle their ecosystems, and have more access to their data, and again, this becomes an issue with the digital currency. When every transaction is becoming digital - everything is done with a QR code - that, again, provides power and control to a central government. It's enormous amount of control, and we run into data privacy issues again. Suppression and denial of people's access to a digital monetary system based on social credit scores, so to speak, in that regard we are going to see more fragmentation of the global financial landscape. The liberal democracies of the world will say, "Look, if adopting digital currency means that citizens essentially give up their rights of privacy, or if they choose not to participate in the monetary system they are marginalized to the point that they cannot participate in the economy," I don't see digital currency becoming the only alternative for democracies. I think you will still see a two-track process where you can do all kinds of things with digital cash, but you still have an option to pay in cash. In some ways that may not be a good thing because you can have black markets, criminal organization payment networks, tax evaders etc. But until a system based entirely on digital currency provides or allows for privacy and choice, we are going to see different emergent systems.Q: Yes, essentially it is an ideological value system diversity issue.A: Indeed, and the monetary system is a belief system based on trust and values. But what we are seeing as a game changer right now is the technology. That changes everything.Q: But is it possible for the US government to develop its own digital currency?A: We will see that. In the US, it will not be a government initiative. It will be through public-private partnership. The government will probably encourage Amazon, Google, or the other FAANG companies, to come up with some kind of universal digital currency. There have been talks about the COVID-19 making the US dollar lose some value. But I think in the long run, there is no alternative. For the digital renminbi, maybe you can see the countries along the Belt and Road, emerging countries in central Asia and parts of Africa, adopting it. We are in super early days of mercantilist competition. The US and the West has just woken up. It is like they got slapped a couple of times hard and woke up to this new reality. Now they are going to alter their behavior. We will see a re-orientation to a much more mercantilist system. That is going to lead to a more fragmented global economy - a fragmented Internet, fragmented markets, more localized production, and so forth.Q: As the US is trying to catch up with semiconductor production, and China is of course doing the same for the purpose of meeting its Made-in-China 2025 goals, can there be over-supply in the future? Do you think they will achieve their goal?A: Yes. US semiconductor companies, in terms of revenues and global share, are now a little more than half of the world revenues. So, they are still dominant in that regard. If you look at the value chain of semiconductors, which is broken into research and development, design, foundry, testing, and packaging, 80% of the value is in the design and the manufacturing portion. Most of the US semiconductor industry has outsourced that manufacturing portion, and the biggest percentage of that is with TSMC and UMC. The trade war and COVID, which further exacerbated the techno-nationalist issues we've been discussing, sort of brought that to light. The US government sees it cannot afford to be vulnerable to having such a big portion of semiconductor manufacturing off-shore to Taiwan.We just discussed all kinds of cross-strait tension, cyber-infiltration, the possibility of sabotage, IP theft and so on. The US is committed to reshoring a significant portion of semiconductor manufacturing. That is now underway. We are in very early stages. It is well-known that TSMC has already pledged to build a US$12 billion in Arizona. But beyond that, there is US$30 billion funding in the first tranche in government spending to get production back to the US. That will happen. That happened before. Go back to the 1980s, Japan became the most advanced nation in terms of semiconductor design and manufacturing capabilities. The US responded with a public-private partnership called Sematech. Within 10 years, the US semiconductor industry had leapfrogged. Semiconductor for sure is an industry of strategic importance that is going to be re-shored and re-fenced to a certain degree. Other strategic industries such as pharmaceuticals, will also be re-shored.As for whether the goals of MIC 2025 can be achieved, I think they have miscalculated, and that is a serious example of overreach. China absolutely over-stepped what they were able to. They pronounced this MIC 2025 plan, in which all core industries require semiconductors, and they are a long way from having the capability to produce these semiconductors. And the CCP doubled down and came out with a China Standards 2035, saying that Chinese companies are going to dominate global standards such as 5G. Doing all of these subsequently at the time when militarizing islands in the South China Sea, and imposing national security law at Hong Kong, you couldn't have drawn this up any worse in terms of a foreign policy bungle, given the backlash and the blowbacks we are seeing. So, no. No, I don't think they are going to meet their goals by 2025, not even close, when it comes to semiconductors.But you could look at it another way. This is a 21st century "Sputnik moment" for the United States. And Western Europe is basically saying, "OK, game on!" I would argue, when the US is so paralyzed by its divisive national politics, I can't think of a better way to unite a country, and to come up with a new wave of public-private partnerships, than to name China a new technology and economic rival. This is a new Moon-shot Moment for the West.Q: The Beijing government seems to have done a good job controlling the pandemic and have its economy rebounded from the low, while the US is still in deep water. What can we expect from the future development?A: That is a testimony to the Chinese juggernaut. China has always been good at doing things at scale. They have decades of successful experience in building infrastructure at scale. To see them building those hospitals from ground up in Wuhan, that was an awesome display of autocratic efficiency. No question about that. When the Chinese Communist Party set their eyes on something, they can accomplish a lot. You contrast that to Western liberal democracies, which are, of course, by nature, prone to political paralysis and partisanship. There is, to a large degree, political paralysis like that in the United States. There is no question that liberal democracies have not handled the pandemic anywhere near as efficiently as some technocratic governments in Asia. COVID will provide an interesting lesson going forward, but it would be a huge mistake interpreting it as the validation for the ultimate decline of the United States or the West.There is no question that there will be people in China who look at the United States and say, "These guys can't even manage themselves out of a wet paper bag! Why are we worrying about these guys?" But the real strength of the US will emerge. The US economy and political system is resilient and will survive Donald Trump. It is going to make a comeback and if it needs to reinvent itself, it will. The institutional systems are still sound, and the checks and balances are still working. And you have a wide range of public-private partnerships, which I think will be the key to the 21st century. This is not a top-down, centralized system of government. It's a public-private partnership government, where government plays a supporting and promoting role. But when you throw in the vast US entrepreneurial sector, the open and free market, and the universities, think-tanks and knowledge economy ecosystems, the synergies can be huge.Q: So, no matter who wins in the presidential election, there is no going back for the US-China relations?A: The US-China trajectory would not change with Democrat or Republican winning the election. What will change, of course, if Mr Biden is elected, is a much more organized and articulated policy when it comes to China. That would mean mending fences with allies, and probably building a new coalition to build a new rule-frameworks. We are still at the early, early days with the digital landscape. It requires a new e-WTO, for example. And we also need clearer guidelines around privacy, and all the things we talked about. From a multilateral perspective, we can again see the world fracturing into different blocs, where liberal-democratic countries are members of the multilateral frameworks that promote their own values and non-democratic countries are not going to be a part of that. You cannot separate the application of technologies from those values.Q: But would that mean the production costs for manufactures will go up?A: Yes, invariably there will be instances that represent the Galapagos Syndrome. We probably won't have the same efficiency of markets that we had with fully rationalized, open global value chains. But again, the full global trading system is not sustainable, unless everybody is playing by the rules. And when the world's second largest economy is not playing by the rules, it's not a sustainable system.You have fenced-off ecosystems that are not particularly efficient and could not compete on an international basis if they are left on their own. We saw this happen in Japan in the telecommunications space in the 1990s. Can that happen again? Yes of course. But in a neo-mercantilist world, where it's about the nation state and its interests, or its aligned interests with other nation states around specific values, that's the way it is.

Taiwan Comfort Champ Manufacturing will export a turnkey solution for producing medical masks, including materials, equipment and quality inspection technology, to Thailand, and is in talks about exporting it to Indonesia and the US, according to company chairman Andy Chen.Amid face mask shortages in many counties in the wake of the coronavirus pandemic, Chen said his company has teamed up with melt-blown non-woven fabric makers Trimeltech and Win-Win Nonwoven Innovation, and equipment maker NCM Nonwoven Converting Machinery to develop the turnkey solution featuring modular miniaturized production lines.The solution lowers the technological barrier for mask production and takes only seven months from equipment installation to start of $ production, Chen noted, adding the solution features adjustable production capacity, ranging from 200,000 to two million masks daily.Taiwan Comfort Champ-developed face mask production linePhoto: Company

Around the world, the Covid-19 pandemic, and the strict lockdowns which governments have imposed to try to control the spread of infection, have brought short-term upheaval to every aspect of people's lives.But looking ahead at the months and years to follow once the immediate crisis has passed, which changes in ordinary life are likely to endure? And how does a memory IC manufacturer such as Winbond ensure that it is ready to meet the changed requirements of electronics device OEMs?Winbond has worked hard to adapt its strategic product and technology plans in the light of the changed circumstances that it is now forecasting. This is the company's broad assessment of how the post-Covid world is going to shape up, and of the demands that this will place on suppliers to the memory IC market.Home working and home entertainment will become the new normalWhen governments imposed pandemic lockdowns, citizens were told that those who could work from home, should work from home. Companies scrambled to put in place new systems and processes which would allow for all or most workers to work from home.What was originally intended to be a short-term fix has turned out to be an efficient way of working. To most people's surprise, home working is one of the few positive changes to emerge from the pandemic. It turns out that people like it, and so do companies - it is a win-win. People save the time that they would otherwise have spent commuting, so have more time to spend with their families, or on leisure activities.And companies are now exploring the scope to save money on the provision of work spaces, particularly for office staff. They are also keen to make savings on business travel. Workers have discovered that they can achieve on video conference calls made on platforms such as Microsoft Teams, Zoom or Skype almost as much as they could in a face-to-face meeting, but without the cost, time and energy involved in business travel.For the sake both of people and of the organisations which employ them, home working is here to stay. And this means that there will be a surge in demand for the technologies which enable computing and communications equipment to work efficiently and effectively. Fibre-to-the-home (FTTH) and Wi-Fi 6 routers will be particularly popular to meet the home worker's need for high internet bandwidth. We will also see higher demand for computing equipment for home use. As so often before, predictions of the death of the PC are set to be proved wrong. We also expect to see strong growth in the market for the peripheral devices which make home working more comfortable or efficient, and for high-performance smartphones.Many home computing and communications devices depend on robust NOR or NAND Flash for boot code storage. Winbond's investment in developing QspiNAND Flash technology is important in this context: the QspiNAND Flash devices are lower-cost alternatives to conventional NOR Flash for storing code bigger than 512Mbits. The QspiNAND Flash products provide high-speed Read and Write performance sufficient for Code Shadowing operation, and have a small package size and low pin count, enabling OEMs to reduce the size and cost of the board. Board and cost savings are also a benefit of low pin-count HyperRAM memory devices for use in space-constrained computing peripherals such as wireless headsets or True Wireless earbuds.Another lockdown phenomenon which looks set to continue post-Covid is the use of advanced technology for home entertainment. Streaming video services such as Netflix and Amazon Prime are now even more popular than before. But another effect that Winbond forecasts is the emergence of demand for 8K TVs for the ultimate home cinema experience. Here, Winbond's Low-Power DDR3 (LPDDR3) DRAM products are the ideal choice: in the T-CON module in an 8K TV, a single LPDDR3 replaces multiple alternative components to offer a substantial space and cost saving.Societies will accept greater intrusion into private lives in the name of disease preventionAccepted practice will differ from country to country. But the general trend that we can already see around the world is that citizens will grant permission to the authorities to acquire and keep data about their movement and their contact with actually or potentially infected people, provided that this intrusion into privacy is required to limit the spread of Covid-19 or other infectious diseases.This trend has already led to the use of smartphone radio technologies and apps to work out who has been close to known infected people. In future, we can expect to see greater deployment of potentially even more intrusive technologies, such as IP cameras in public places, and camera drones monitoring compliance with social distancing regulations in public spaces.But while citizens might accept the acquisition and use of personal data for strictly medical purposes, they will not accept misuse or mishandling of the data. This looks set to boost demand for proven security components which can protect electronics devices such as cameras from tampering or hacking attack.Security and encryption are commonly regarded as functions to be implemented in a high-end digital system such as a microcontroller, Secure Element or microprocessor. But system designs in which boot code and/or personal data are stored in an external memory also need to take account of security requirements. Winbond anticipated this requirement for secure code storage with the development of its TrustME family of Secure Flash Memory products. The latest TrustME memory product, the W77Q is "Security by Design" to prevent IoT devices from remote software attack. The W77Q provides hardware root-of-trust and secure, encrypted data-storage and data-transfer capabilities. By ensuring robust, end-to-end security in IoT devices it enables:* Secure code updates, including over-the-air updates, via an end-to-end secure channel between an update authority and the W77Q even when the host processor or SoC has been compromised.* Secure boot and root-of-trust* Authenticated and encrypted data transfer between the Flash device and the host* Execute-in-Place (XiP) of boot and application code* System resilience, featured by the key security functions of protection, detection and recoveryDRAM development also puts Winbond in prime position to meet the emerging needs of manufacturers of IP cameras and camera drones for surveillance and people tracking. As in 8K TVs, so in these video devices the latest LPDDR3 DRAM will provide the high bandwidth which high-resolution video systems require, while offering easier integration into end product designs than the LPDDR4 or LPDDR5 generations of DRAM technology.Robots and AI will replace human workers at an accelerating paceThe Covid-19 pandemic has demonstrated how vulnerable some companies are to the suspension of operations when workers become unavailable. In future, companies will be looking to implement more resilient systems which rely less on the physical presence of human workers in a specific location.In addition, by reducing the number of human workers required to operate on any given site, organisations will make it easier to maintain social distancing in the workplace.This trend for the adoption of robotics, backed by increasingly sophisticated Artificial Intelligence (AI) and machine learning technologies, will lead to rapid growth in demand for fast microprocessors (MPUs) and graphics processors (GPUs). The sophisticated and complex software which these devices execute will in turn drive the market for high-density, high-bandwidth code storage devices.Winbond's long-range strategic planning enabled it to detect this emerging requirement before the current market conditions caused interest in AI and robotics to flourish. One result was the development of its OctalNAND Flash memory.The first OctalNAND Flash device, the 1Gbit W35N01JW, sets a new benchmark for the Read performance of NAND Flash technology: a maximum Continuous Read throughput of 240Mbytes/s, three times faster than Winbond's earlier high-performance W25N-JW QspiNAND Flash family, and almost 10 times faster than general QspiNAND Flash products on the market.At this level of performance, OctalNAND Flash can replace Octal NOR Flash with limited loss of Read performance, and at a lower cost-per-bit at densities higher than 512Mbits. Winbond's OctalNAND Flash is thus an ideal replacement for Octal NOR Flash for storing large code bases, such as those of robots and other systems which take advantage of the capabilities of AI and machine learning.Anticipating the memory requirements arising from mega-trendsWhile the world's focus in 2020 is rightly on the immediate medical emergency of Covid-19, it is right to be looking forward to the changes in business practices and technology operations which the pandemic is likely to cause. By carefully analysing market requirements and understanding end user behaviour, Winbond puts itself in an excellent position to develop the memory products which will help its customers succeed in a post-Covid world. From QspiNAND Flash to TrustME Secure Flash memory to LPDDR DRAM, Winbond has memory products which are ready for the future, whatever it might bring.(Note: Johnson Chen is executive sales director at Winbond Electronics.)Three mega-trends for a post-Covid world

When Chinese president Xi Jinping declared war on COVID-19, I knew the outbreak in China must have been very grave. At the time, many Taiwanese CEOs and managers had returned home from China for the Lunar New Year break. They couuld not go back to work in China after the holiday, and yet these "stranded" CEOs provided us with very good sources of first-hand information about what was actually happening to the supply chains in China during the outbreak. As an analyst with 35 years of experience under my belt, and with strong ties with many industry leaders in Taiwan, I felt a strong commitment to recording what I was witnessing at this turning point.That was how Disconnected ICT Supply Chains: New Power Plays Unfolding came into being. This new book of mine analyzes the ICT supply chains in the wake of the coronavirus pandemic from a Taiwan-originated Asian perspective that could fill the gaps of understanding from a US-European standpoint. I have done many research projects commissioned by major ICT firms, such as Microsoft, Applied Materials, TSMC, Foxconn and AUO, and I'm well aware of their blind spots.Taiwan's ICT industries are standing at the crossroads, and they must have their own value propositions in order to survive. The pandemic is a global disaster, and yet it provides Taiwan with an opportunity to show the world its worth.

As manufacturers re-open after COVID-19 related lockdowns, economic and supply chain disruptions may be felt beyond 2020. How companies shift in the short-term and plan for the long-term will be factors in defining "new normal" for the component industry.The pandemic caused the world to shut down quickly and, just as quickly, changed buying sentiment. For example, McKinsey & Company reported that demand in cloud and server computing sectors spiked as people started to work from home almost overnight. In contrast, demand for luxury goods plummeted."The automotive and cellphone industry have taken a hit as the world sits at a standstill," said Luke LeSaffre, director of sales, Americas, at Fusion Worldwide. "People's buying habits are focused on essential goods and services now because there is so much financial and employment uncertainty."As we approach the second half of 2020 and re-opening, some companies are shifting production to try to meet the new consumer needs while also mitigating the almost inevitable 2020 financial losses. In other cases, companies may move components to end-of-life quicker to offset waning demand with more profitable components.Looking beyond 2020, there are a few areas that could see significant change. As companies look back to evaluate how to be better prepared for future shocks, increasing efficiency and flexibility may be the themes.With factories starting up again, the "new normal" may result in permanently implementing the operational changes that were required to continue conducting business during the pandemic. For example, changes made to comply with work from home and social distancing mandates may continue as manufacturers see more benefit in keeping these changes for the long-term.One such area is the use of robotics and remote monitoring, which has allowed companies to gain more control of their operations and processes. According to Omdia, by incorporating the use of automation in various steps of the manufacturing processes, companies have the ability adjust their production and shipping schedules immediately.Diversification of the supply chain to avoid similar disruptions is another area to mitigate future risk. Because manufacturers often depend on a single region to produce components or a single product in a buildout, it has hindered their ability to weather the pandemic. This practice has resulted in multiple supply chain gaps, possibly resulting in far reaching impacts.Paul Romano, COO at Fusion Worldwide, said, "With the technology industry, expect to see work done to help build foundations in other areas, like Vietnam, India, and the Philippines to support highly increased production. This, however, is a long-term solution and will be a challenging shift."The United States, in particular, is looking to jump-start the development of new chip factories throughout the country. The creation of cutting-edge factories in the U.S. could reshape the industry as companies' source less from Asia.However, it will be nearly impossible to eliminate the reliance on China in manufacturing - at least for the foreseeable future. The country's size, raw material access and prominence is unparalleled. These fundamentals will prevent any large-scale shift away from China any time soon.A medium-term tactic, however, is diversifying vendor partnerships. With reliance on an exclusive vendor and limited alternative products in builds, companies are left scrambling to fill shortages or reduce excess in tumultuous times. Mitigating this risk by having partnerships in the open market will make for a healthier supply chain.Tobey Gonnerman, EVP of trade at Fusion Worldwide, says "The OEMs and sectors that approach the open market as a 'last resort' are the ones most severely impacted when supply chains are disrupted. Just like any financial planner likes to point out, if you wait until it starts to rain to start thinking about your rainy-day fund, then it's too late. You're going to get wet."While the COVID-19 pandemic has wreaked havoc on the world, many manufacturers will be able to benefit, in the future, by taking the lessons they've learned as an opportunity to enhance their supply chains.Reshaping production post COVID-19