TrendForce’s IT Industry Forecast for 2018 at Shanghai

Estimated reading time: 11 minutes

The IoT market has seen rapid growth since 2017, penetrating deeply into various vertical applications. The highlight of the 2017 IoT market has been “smart interaction and connectivity.” The next focus in 2018 will be “smart management.” In the consumer IoT market, voice-based intelligent personal assistants have open up new possibilities in the interaction between users and their devices. These services enable users to have better control of their devices with a more intuitive interface and have made coordinated, synchronized operations among devices a necessity.

Jimmy Liu, TrendForce’s IoT analyst, stated that as the technologies behind voice-based intelligent personal assistants continue to advance, the level of acceptance for consumer IoT devices will also increase. Next year will see more of such services being launched.

As for the non-consumer IoT market, the emergence of edge computing has helped improve the computing capability of hardware. The introduction of edge computing into industrial applications allow for shorter response time and more instantaneous feedback. Furthermore, this approach will reduce costs related to data transmission and cloud storage/processing. In the future, edge computing is expected to be rapidly deployed by various enterprises.

With the increasing number of connected devices, “smart” functionalities will grow and system efficiency requirements will be raised. This create demand for key solutions that will efficiently and intelligently manage IoT products and services. As the general development favors the simplification IoT architecture as well as the expansion of the IoT ecosystems, obtaining smart, integrated management solutions will be the next milestone in this market.

Apple pushes Micro LED forward as a rival to OLED

OLED display has become a must of premium smartphones. However, limited production capacity and Samsung’s dominance in this market compels Apple to develop an alternative display technology as a substitute and a competitor. Roger Chu, research director of LEDinside, the LED research division under TrendForce, stated that Micro LED is the next-generation display technology that Apple is currently developing. Due to Apple’s engagement, a growing number of international technology giants are also entering the Micro LED market via investments and acquisitions. However, there are high technological barriers to the mass production of Micro LED displays. The companies working in these three major fields – LED, panel and semiconductor – need to cooperate as to overcome the manufacturing challenges.

The rise of edge computing will stimulate various AI applications in 2018

TrendForce’s industry analyst Christy Lin pointed out that the push for autonomous vehicles, drones and smart factories has shifted the focus in AI application development from solutions based on cloud computing to ones based edge computing. The rise of edge computing has enabled AI-powered services and products to function smoothly in the absence of cloud support. With the advent of edge computing, various AI-related applications are expected to enter practical implementation in 2018.

Cloud computing and data storage provide opportunities for Asian server ODMs

Server demand has taken off in the era of IoT and AI. However, servers for AI applications are different architecturally from those used in high-density computing. DRAMeXchange analyst Mark Liu noted that Asian server manufacturers will see more growth opportunities related to structural changes in the industry and advances in computing power of server units. In short, server manufacturers in China such as Huawei, Sugon, and Inspur together with those in Taiwan will become the beneficiaries.

Demand for autonomous driving solutions to propel advances in the global automotive industry 

According to Tim Pai, TrendForce’s senior industry consultant, the development focus of the automotive industry has transitioned from power mechanics to digital systems, with increasing efforts to find intelligent and autonomous driving solutions. Under this context, the realization of self-driving cars is on the horizon with the integration of automotive sensors, big data processing and improved AI algorithms. However, the popularization of self-driving vehicles still has to overcome several difficult hurdles such as raising consumer confidence, establishing a legal/regulatory framework and building the supporting infrastructure.

Trends in the market for new energy vehicle batteries in 2018

China’s industries have entered a new phase in their upgrade and structural transformation during 2017. Due to the drafting of Double Integral Policy by the Chinese government, new energy vehicles as a concept has been embraced by not only the auto makers in China but also the entire global automotive industry. These policies furthermore influence the long-term strategies of the battery industry. TrendForce estimates that batteries used by new energy vehicles worldwide for the entire 2017 will exceed 37GWh, of which passenger-class vehicles will account for 17GWh and buses will make up 15GWh. The total number of new energy passenger-class vehicles worldwide is set to grow steadily by 25% year on year in 2017. The total number of new energy logistics vehicles worldwide is projected to post the highest annual growth for the same year at around 50% on account of the new round of subsidy from Chinese government. The year-on-year growth for new energy logistics vehicles will fall back to 31% in 2018.

For the battery industry, Duff Lu, senior research manager of EnergyTrend – the green energy research division under TrendForce, pointed out that the use of batteries with ternary cathode materials in new energy vehicles has expanded significantly in recent years as their technologies gradually mature. The penetration rate of ternary batteries in the global market for new energy passenger-class vehicles has risen from 45% in 2015 to an estimated 70% in 2017. As for new energy buses, they still rely on batteries with LFP cathode because of cost and performance considerations. Nonetheless, the penetration rate of ternary batteries in the global market for new energy buses is projected to increase to more than 10% in 2017. The latest survey on subsidy rules and mainstream offerings indicate that major players in the industry will become even larger.

In the future, apart from innovations in supply models resulting from cross-industry alliances, improvements in product specifications will play an important role in the strength of the enterprises. It is also worth mentioning that cobalt prices have recorded a five-year high in 2017, and the market for this metal is expected to be bullish in the long term.

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