Internet
ò The countryÆs Ministry of Information and Communication said the number of internet users in Japan accessing the web from cell phones exceeded those from personal computers in 2005. At the end of the year, the report said there were 69.2 million people using the internet from mobile devices, compared to 66 million conventional PC users. Of these two user groups, 48.6 million use both a mobile device and a conventional PC, giving Japan a total internet population of 85.3 million users. In 2005, the total mobile internet commerce market was worth Ñ724 billion ($6.3 billion), according to the report, with sales of mobiles still composing a large proportion of that. Between the two user groups, mobile internet users access the internet more frequently. About 55 percent of these users log on at least once per day, compared to 44 percent of PC-based users. Browsing the web and checking email remain the most popular uses for the internet. In March 2006 there were 8.7 million bloggers in Japan versus 7.2 million users of social networking services. As of March this year there were 10 million IP telephone lines.
Hardware
ò Sony Corp disclosed that it has secured a syndicated loan worth Ñ80 billion ($701.3 million), in a bid to diversify its sources of funds. The company said the loan is also its first bank borrowing in 10 years. Sony tapped the country's expanding syndicated loan market as it offered a cheaper source of cash while investors in corporate debt are demanding higher yields before an expected rise in Japanese interest rates this year. The three-year floating-rate loan came from more than 20 Japanese lenders, with Mizuho Financial Group arranging the loan. A company spokesperson said the fundraising turned out to be bigger than what it has initially aimed for. According to the Bank of Japan, outstanding syndicated loans in Japan registered a 30 percent growth to a record Ñ37.4 trillion ($327.8 billion) on March 31 from a year earlier. Analysts say large Japanese lenders are arranging more of this type of financing to increase fee income and boost profits.
ò Toshiba Corp. and US-based SanDisk Corp. announced their plan to jointly spend about Ñ600 billion ($5.2 billion) to build a new flash memory plant in Japan in a bid to compete with rival Samsung Electronics. Toshiba is the world's No. 2 maker of NAND-type flash memory after Samsung The two companies said they will build a NAND-type flash memory factory in Iwate prefecture in northern Japan and begin operations there in 2008/09. The company plans to double its output capacity for NAND flash memory chips by 2008/09 to further strengthen its operations. Research firm iSuppli expects the global NAND market to expand 140% to $26.1 billion by 2009.
Semiconductors
ò Rambus , one of the world's premier technology licensing companies specialising in high-speed chip interfaces, announced the signing of a new patent license agreement with Matsushita Electric Industrial. Under the five-year agreement, Matsushita is given a license to Rambus patents for SDRAM and DDR SDRAM memory controllers. Rambus will receive royalty payments based on the shipment of these memory controllers. Matsushita Electric said it has also signed a technology license agreement with Rambus in 2004 for use of its DDR2 drop-in cell as well as its XDR(TM) memory interface solution. These two interface designs enable Matsushita to deliver high-volume consumer products to the market that will span a wide range of price-performance points. Matsushita joins a growing list of semiconductor suppliers and system manufacturers who have signed patent license agreements for various products covered by Rambus patents. Other companies include AMD, Elpida, Fujitsu, Infineon, NEC, Renesas, and Toshiba. Rambus is one of the world's premier technology licensing companies specializing in the invention and design of high-speed chip interfaces.
Korea
Internet
ò KT, the country's largest fixed-line operator, and SK Telecom, the largest mobile phone service provider, announced the start of their commercial services of WiBro, a homegrown portable internet service. WiBro is said to enable users to access the internet at the speed of fixed-line connections through portable devices such as laptops or personal digital assistants. Mobile reception is reportedly seamless even when moving at speeds up to 100 kilometers (62 miles) per hour. The company said the offering would be available only for laptops for now. Those who wish to try the service can buy a card at KT or SK Telecom offices, which can be inserted into most laptop computers. The card is W300,000 ($316) but one must also pay a monthly subscription fee, which is a flat rate of W30,000 ($31) in the case of SK Telecom; KT has various payment plans but is offering a fixed monthly rate of W16,000 ($17) until the end of this year. As to its coverage, WiBro is available for the time being only in certain areas of Seoul and Gyeonggi province.
ò Online retailer Gmarket has become the first South Korean online retailer to be listed on the US NASDAQ. It started with some 9.1 million shares offered at $15.2 per share. Established in 2000, Gmarket has grown rapidly since it started full operation in 2003, competing fiercely with trading site Auction for the market lead. The company said products worth 469 billion won ($4.1 billion) were traded on the online marketplace in the first quarter. The online company held road shows for institutional investors in Hong Kong, Singapore, London and New
Media, Entertainment and Gaming
ò Industry sources said that Gamevill, a mobile game company, will sign the industryÆs first official contract with Nintendo for development of Nintendo DS-only 'Nom2', a famous mobile game of Gamevill, at the end of July. The move is seen as making the domestic mobile game more popular because it is being supplied to global users using Nintendo DS. 'Nom2' reported 3,000 downloads for just one month after releasing via SKT in May last year. In a related development, Nintendo Japan announced that it will establish a local affiliate in South Korea to expand its market presence there. The decision by Nintendo's board of directors calls for a local firm to be set up. The new company will be wholly owned by the parent group on an investment of W25 billion ($26 million). The Japanese company plans to use the local firm in Seoul to help expand sales of such products as its portable Nintendo DS (NDS) and other game products.
Mobile/Wireless
ò SK Communications and SKT announced that they have initiated commercial service of 'PLEEP', a mobile-based movie streaming service for the national college entrance exam from July 3 after having completed its beta service. 'PLEEP' or Portable LEarning EncycloPedia is a new concept service that users can search a necessary lecture of about 1,000 lecturing movies that run for about 7 minutes. Under the offering, users can watch the movie lecture by downloading through a Portable Multimedia Player (PMP) or a Personal Digital Assistant (PDA).
ò Motorola revealed that is in talks with VK Corp, a South Korean handset maker that avoided bankruptcy last month. Analysts are saying the funds from Motorola may help VK settle debts and remain in business. Observers said that Motorola might buy bonds convertible to a controlling stake in VK and agree to order handsets from the company. A VK spokesperson confirmed that talks, even as no details were given.
Telecommunications
ò The countryÆs telecom industry said that the number of cell phone subscribers will exceed 40 million this year, with the number of mobile phone subscribers increasing by 1 million from late last year to 39.3 million in the first half of the year. The industry expects the number of subscribers to top the 40 million mark within the year. The report said that in the first six months, SK Telecom saw a net increase of 454,000 with the number of subscribers totaling 19.9 million as of late June. The number of SKT subscribers is expected to exceed 20 million in July given that an average of 60,000-70,000 newly subscribed people to Korea's largest telecom provider per month. KTF said that its customers posted an additional 331,387 to hit 12.6 million during the same period. LG Telecom registered a rise of 254,789 to post 6.7 million users.
China
Internet
ò Dang Dang, the Beijing online retailer, announced raising $27 million in a round led by Silicon Valley venture capital firm Doll Capital Management. The deal was put together with Menlo Park's DCM. Observers say the deal continues DCM's aggressive presence in China. DCM arrived just when China liberalised its economy, and hit huge success by backing job company 51Job. It has since made investments valued at several millions in Legend, the company that owns Lenovo, the country's largest PC company. It has also backed China's media portal Oak Pacific Interactive and IT outsourcing company, Worksoft. Meanwhile, Dang Dang says it is now China's largest online seller of books, movies and music. Like Amazon in the US, Dang Dang in China has moved from a large seller of books to include everything from digital products to cosmetics. Amazon bought Joyo.com, the largest Chinese online retailer. Dang Dang was founded in 1999. Walden International and Alto Global Investment also participated in the round. Dang Dang said it has overtaken Joyo as the biggest e-retailer in China.
Mobile/Wireless
ò According to Analysys International, the government might just decide to award three 3G licenses in China in the second half of this year. With the forecast came the research firmÆs statement that, in that situation, the operators with the most money to spend would be leading the market. Industry experts place the cost of building a 3G mobile phone network that spans the mainland at Rmb120 billion ($15 billion), pushing them to identify China Mobile and China Telecom as the only domestic companies with enough funds to provide service expansion. Analysts are suggesting that China Netcom and China Unicom should combine their resources through a joint venture that would enable them to build a nationwide 3G network. In May, China Netcom sold all its equity in Asia Netcom, a telecommunications carrier, for $402 million to an investor group that included Ashmore Emerging Markets Liquid Investment Portfolio, Spinnaker Global Opportunity Fund Limited and Clearwater Capital Partners. Sources said that if the country issues 3G licenses this year, investments by equipment makers on the mainland are expected to reach Rmb310.5 billion ($38.8 billion) in the next six years.
ò China Unicom disclosed that it plans to sell commercial paper valued at Rmb 6 billion ($751.3 million) as part of its first short-term debt sale this year. The company said the commercial paper would be sold through its wholly owned subsidiary China Unicom Corp. The move follows its convertible bond sales worth $1 billion to SK Telecom in June. The company said it would use the proceeds from both deals as working capital. Managing the deal is China Everbright Bank. In June 2005, China UnicomÆs commercial paper sales gave the company about Rmb10 billion ($1.2 billion). In May, the company registered an additional 1.2 million customers to hit a total of 133.9 million. The company operates GSM (global system for mobile communications) and CDMA (code-division multiple access) networks.
ò TCL Communication Technology Holdings, a mainland mobile handset manufacturer, indicated that it looks to breaking even in the second quarter and posting a profit this year, a forecast it made after reporting a loss of HK$16 billion ($2 billion) last year. The company said it is targeting the overseas market, seen as promising higher profit margins than mainland China. The company said it aims to sell some 14 million handsets this year, with overseas markets generating 80 percent turnover. Most of its foreign orders come from telecommunications firms such as Vodafone, Orange and T-Mobile. Besides its own TCL brand, TCL Communication also sells phones under the Alcatel brand. The firm will continue to focus on the low-end market, a market that sees it competing with Siemens and BenQ.
ò ZTE, a global provider of telecommunications equipment and network solutions, announced that its equipment has been chosen for a wireless communications network that will provide voice and data services to passengers using the world's highest altitude rail service - the Qinghai-Tibet Railway. Under the deal, the company will work with China Mobile and China Unicom in the deployment of its CDMA and GSM wireless solutions and will be deployed to provide service coverage for the newly built rail system.
ò Philips announced the launching in China of its first near field communication (NFC) trial together with Nokia, China Mobile's Xiamen Office and Xiamen e-Tong Card. A hundred participants have been selected to use a Nokia 3220 mobile phone to conduct secure electronic payments in any restaurant, transportation system, movie theatre or convenience store that accepts the Xiamen e-Tong card. Under the program, trial participants can conduct transactions with the swipe of their mobile phones.
ò China Mobile said its bid to acquire Luxembourg-based operator Millicom International Cellular S.A. has been terminated. The reported $5.3 billion deal would have made it China's largest-ever acquisition of a foreign enterprise. Millicom is controlled by Sweden's Kinnevik Investment, and has nearly 10 million subscribers in 16 countries in Latin America, Africa and Asia. It reported in 2005 gross profit of $489 million. The company recorded revenue of $1 billion for 2005, in which 60 percent came from Latin America and 20 percent from Africa. China Mobile has been actively exploring business opportunities outside China to further develop its business operations.
ò China MobileÆs move to change its fee policies for third-party content providers is expected to have huge impact on the revenues of those firms. The changes are expected to affect the shares of a number of NASDAQ-listed companies that count on mobile content as one of their main revenue sources. The companies include Tom Online, Sina Corp., Linktone Ltd. and Sohu.com Inc. Details of the changes were not yet clear but Tom Online, one of those seen that are seen as affected by the policy changes, disclosed that it has received data about the policy adjustments already. Analysts see the changes as downgrading revenue outlooks for companies to be affected, with their shares to reel from the pressure. China Mobile did not release any comment.
Semiconductor
ò The government of China is reportedly proposing a new tax and subsidy policy to encourage semiconductor component production in the country with concrete details to be released in the second half of 2006. The website indicated new policies including reduction of the current tax rate, a tax deduction for semiconductor production and government funding. Industry players said benefits from the new policy would be limited because over 54 percent of the production value in China's semiconductor industry is contributed by backend production, rather than the relatively high value front-end producers.
Ventures/Investments
ò Lenovo Group announced that it has secured a government permission to set up the first nationwide corporate pension program. Observers see the move as providing a model that other firms may emulate. Before Lenovo, companies set up different pension plans for their workers depending on where the employees were located, with the plans undergoing registration and registration at the provincial level. Lenovo said its pension fund would start investing in the mainland stock market later this month with an initial outlay of Rmb50 million $6.2 million). The amount is expected to go up to Rmb20 million ($2.5 million) after one year. The company did not release details about the size of the fund. No information was given as to the kind stocks the company would investment in. Lenovo said it has engaged the services of corporate pension service providers Ping An Endowment Insurance, China Merchants Bank and Harvest Fund Management to serve as trustee, custodian and investment manager, respectively. With this offering, Lenovo becomes the first mainland company to register its corporate pension program with the Ministry of Labor & Social Security.
Taiwan
Semiconductors
ò The world's second-largest contract microchip maker, United Microelectronics Corp (UMC), announced that it would begin construction of a 12-inch (300-millimeter) wafer plant in Taiwan by the end of this year. The company said market conditions will play a great part in the installation of production equipment, which is expected to account for more than 90 percent of the total investment for the plant. Industry sources state that a 12-inch wafer plant with a monthly capacity of 40,000 units can cost about NT$100 billion ($3 billion). Presently, UMC operates one 12-inch plant in Tainan, southern Taiwan, and another in Singapore. The company disclosed that UMC's Tainan plant produced more than 20,000 units and the Singapore base plant contributed more than 10,000 units a month against the full capacity of 40,000 units at both facilities.
Ventures/Investments
ò Taiwan said it has approved an investment by U.S.-based Carlyle Group in a Taiwanese cable operator, a deal valued at $412.8 million. According to the countryÆs Investment Commission, the investment fund, together with syndicated loans sought by Carlyle, will give the private equity company a majority stake in Eastern Multimedia, a leading Taiwanese cable-television operator. With this investment, CarlyleÆs financial participation in the company could reach some $1.4 billion even as industry sources said that the U.S. firmÆs stake in Eastern Multimedia will not exceed the 60 percent ceiling imposed on foreign control of local media firms. In a related development, the commission said it has also allowed Carlyle's $102.7 million investment in Eastern Broadcasting, a Taiwanese cable TV station. The acquisitions and investments continue the entry of private equity firms into the lucrative Asian market.
Mobile/Wireless
ò Taipei is predicting that by the end of 2006, some 200,000 people would be using wireless internet phones. The move is seen as providing a cheaper and efficient alternative to traditional mobiles. According to the Taipei Computer Association, Taipei would be the first internet phone system in the world to use and transform the entire city instead of merely a spot as a wireless operation environment. The local government forecasts that before the end of next month, hundreds of elementary and high schools will have access to the internet telephony system.
Hardware
ò HannStar Display said it will start shipping small- to medium-size LCD panels to Casio from a 3G line later this month. The company said the Japan-based maker already approved samples in June. The production line mainly produces high-resolution and low power consumption small- to medium-size panels for handsets, digital still cameras (DSCs) and PMPs (portable multimedia players), with sizes ranging from 1.5 to 3.5 inches. HannStar said that full capacity is slated to be 20,000-25,000 glass substrates per month.
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