Loading...
Symbols:
Authors:

Japanese Tech Stock Weekly Summary

by: IRG February 26, 2008 | about stocks: MC / NTDOY.PK / NTT / SHCAY.PK / SNE / SSNLF.PK / TOSBF.PK    

IRG

About this author:
Become a Contributor Submit an Article
  • Font Size:
  • Print

The following is excerpted from IRG's weekly stock report:

Mobile/Wireless

• Domestic sales of digital music downloads jumped 41 percent on the year to 75.5 billion yen (US$699.5 million) in 2007, according to the Recording Industry Association of Japan. Music downloads to mobile phones rose 41 percent to 68 billion yen (US$630.3 million). Downloads of song excerpts grew just 1 percent, while downloads of full-length songs soared 91 percent, and for the first time ever, annual sales of full-length downloads exceeded song excerpt downloads. The association believes there is still room for further growth because of such factors as consumers replacing their existing cellular phones with advanced newer models. Sales of music downloads to personal computers which can be transferred to portable audio players climbed 18 percent. But with the market for these players having plateaued, growth in such downloads slowed from the previous year's 170 percent.

Semiconductor

• Sony Corp. (SNE) announced that it plans to invest approximately 22 billion yen (US$205.2 million) to strengthen middle and large size OLED (organic light-emitting diode) panel production technology. With this investment, Sony intends to accelerate the shift to middle and large size, high image quality OLED panels. Sony began researching OLED technology in 1994, and has since positioned OLED as a future next-generation display technology. Sony has decided to invest from the second half of the fiscal year ending March 31, 2009, towards the further development of production technologies. Sony will reinforce its TFT (thin film transistor) and EL (electroluminescent) layer coating processing facilities at Sony Mobile Display Corporation's Higashiura factory, and plans to implement this production technology during the fiscal year ending March 31, 2010.

• Toshiba Corp. (TOSBF.PK), Sony Corp. and Sony Computer Entertainment Inc. [SCEI] announced that they have formed a new joint venture among the companies for the production of high-performance semiconductors, including products for SCEI's PlayStation computer entertainment systems. The joint venture will start operation from April 1, 2008 in Nagasaki Technology Center of Sony Semiconductor Kyushu Corporation [SCK]. Toshiba, and Sony and SCEI will each take a 20% stake. Within the fiscal year ending March 31, 2008, Toshiba will acquire from Sony and SCK for approximately 90 billion yen, the 300 mm wafer line installed in SCK's Nagasaki Technology Center Fab2, with the exception of some equipment, and Toshiba plans to make it available to the joint venture at the start of operation.

• Toshiba Corp. said it will spend more than 1.7 trillion yen (US$15.7 billion) with SanDisk Corp. (SNDK) to build two chip factories to challenge Samsung Electronics Co. Toshiba will share the funding and output of one of the plants with SanDisk, a large maker of memory cards. The two companies are still in talks about splitting costs and production at the second one. The factories will be built in Iwate, northern Japan, and Mie, near Osaka in the west of the country. They will be capable of making chips out of 150,000 to 200,000 silicon wafers a month that would roughly double current output.

• In western Japan, Sharp (SHCAY.PK), which also makes liquid crystal display [LCD] televisions, is constructing the world’s biggest solar cell plant. It will be dedicated primarily to thin-film solar cells and is expected to start operations by March 2010.

• Tokyo Electron, a maker of semiconductor equipment, is set to develop solar cell manufacturing equipment through a joint venture with Sharp in a bid to capitalize on the growing demand for clean energy. The two Japanese companies plan to establish a joint venture to develop production equipment for thin-film solar cells. Tokyo Electron will produce and sell the equipment starting in 2009. The technology is attractive because, due to scarcity, the price of silicon has rocketed to as much as US$300-US$350 a kilogram. The joint venture will be capitalized at 50 million yen (US$0.5 million), with 51 percent held by Tokyo Electron and the remainder by Sharp. Sharp is set to boost output capacity for thin-film solar cells more than 10-fold this year, by investing 22 billion yen (US$204.5 million) in the technology.

• Japan's Toshiba is giving up on its HD DVD format after losing the support of key studios and retailers to Blu-ray technology backed by Sony. The decision ends a war between rival consortiums led by Toshiba and Sony vying to set the standard high-definition movies on DVDs, and which has stalled a shift to the new technology in the US$24 billion home DVD market. Toshiba said it would start reducing shipments of HD DVD players and recorders and aimed to close out the business by the end of next month. It said it would continue to provide service for all owners of HD DVD products, and that it was still calculating how much shutting down the business would impact its earnings. According to analysts, if Toshiba can clear hurdles to design software for Blu-ray, it could use a joint venture with Samsung Electronics on optical disks to make Blu-ray players. Toshiba can also enter into an OEM deal or procure Blu-ray products.

• Toshiba shares benefit from the company’s decision to cut its losses due to the abolishment of the HD-DVD format. Toshiba shares jumped 6.3 percent as analysts are pleased with Toshiba’s promise to focus its resources on more promising businesses. Blu-ray accounted for 93 percent of next-generation DVD hardware sales in North America. Blu-ray recorders from Sony, Matsushita (MC) and Sharp made up about 96 percent of the Japanese market in the last quarter of last year, researcher BCN said. Nikko Citigroup (C) raised its rating on Toshiba to a buy-high risk from a hold-high risk while JP Morgan (JPM) maintained an overweight rating, predicting the elimination of sales promotion costs would add 30 billion yen (HK$2.18 billion) to Toshiba's operating profit in the next business year from April.

Telecommunications

• NTT Communications Corp. plans to launch high-speed corporate data communications services connecting Japan and Russia, according to Nikkei. Using an undersea fiber-optic cable completed at the end of last year, NTT Communications will connect its data communications networks in Japan with Russian telecommunications company TransTeleCom's local fiber-optic networks in roughly 900 cities. Dedicated fiber-optic networks reduce the risk of corporate data leaks. In March, NTT Communications will set up a Moscow representative office, which will be upgraded to a local unit this fiscal year. It is looking to win about 100 corporate clients.

• KDDI Corp. announced that it plans to launch high-speed corporate data communications services connecting Japan and Russia as early as this summer. In addition to an existing undersea cable, KDDI is laying two new lines with leading Russian long-distance telecommunications provider Rostelecom (ROS). The lines will boost current transmission capacity a thousandfold and help slash service fees by about 40 percent from existing levels, the Nikkei said.

Media, Entertainment and Gaming

• Nintendo Co. (NTDOY.PK) announced that it will ship a new exercise product on May 19 in the U.S. called Wii Fit that comes with a weight-and-motion sensing device called the Wii Balance Board. In another move, Nintendo will launch a new online service in the U.S. on May 12 called WiiWare that will allow game publishers to distribute new titles over the Internet directly to users instead of on discs. For games distributed over WiiWare, game makers won't need any approval from Nintendo, though they must get their games rated by an industry rating system. The announcements are part of a wave of innovations game companies are showing at the Game Developers Conference. Overall, computer and videogames generated US$17.94 billion in hardware and software sales last year, up 43% from the prior year. Nintendo has sold 1.4 million copies of Wii Fit since it went on sale in Japan Dec. 2. More than 10 independent developers are already working on titles that use the balance board, one of which, Namco Bandai Games Inc. of Japan, is adapting a skiing game for the U.S. that it already released in Japan under the name Family Ski.

Internet

• Japan's social-networking site, Mixi, said it plans to establish a subsidiary in Shanghai to tap China's fast-growing Internet market. The company believes that China's internet population is increasing at a significant pace and its online-advertisement market is also growing. Internet users in China reached 172 million in 2007, and the figure is expected to reach 200 million by 2010. Mixi has not yet determined exactly what service it will launch in China. Mixi.jp is Japan's second most visited Web site after Yahoo (YHOO) Japan's portal site. It has 13 million users, or about 10 percent of the population, and gets 11.8 billion page visits a month. An analyst from Mizuho Securities thinks that Mixi might find it difficult to break into the Chinese social-networking market, just as overseas companies have had trouble establishing a foothold in Japan and the language barrier could prove to be one of the biggest issues. According to the analyst, foreign social network operators such as MySpace.com and Korea's Cyworld have had difficulty succeeding in Japan in the same way that it is going to be difficult to do so from Japan to China. Moreover, China's social-networking sites, including 51.com, Tudou.com and Rox.com.cn, already have a large local following.

Investments/ Ventures

• Hitachi Kokusai Electric Inc. completed its buyback with the purchase of the projected 1 million shares worth 1.1 billion yen (US$10.3 million) on the Tokyo Stock Exchange between February 1 and February 20, 2008.

• Canon Electronics Inc. completed its buyback with the purchase of the projected 500,000 shares worth 1.2 billion yen (US$11.2 million) on the Tokyo Stock Exchange between February 1 and February 20, 2008.

Disclaimer: IRG is not responsible for the accuracy of the news compiled within this article, which is based on publicly available information.

Related Articles
More by IRG

Investment Resources
Money Management 

Research 

Seeking Alpha provides these ads as a service to its leading contributors
Articles on related themes
Japan Tech & Electronics 

Japan Autos 

Japan Financial 

Japan Funds