a-week-in-tech-may-28june-3

A week in tech, May 28-June 3

A roundup of the latest technology news.
Japan

Semiconductors
Renesas Technology Corp. will nearly double its production of high-power amplifiers (HPAs) for mobile phones this year to keep pace with growing demand. The company is planning to produce 38 million units per month in fiscal 2008, 90% more than in fiscal 2007. The increase will be achieved with minimum capital spending by altering the product mix and increasing outsourcing of preparatory operations such as burning circuits onto substrate materials. HPAs are semiconductors that amplify power so that handsets can send strong signals.

Altair Semiconductor, the developer of advanced 4G mobile semiconductors for handheld devices, said it has been selected to supply chipsets for wireless devices operating on WillcomÆs next generation Personal Handyphone System in Japan. Willcom will deploy its PHS network using orthogonal frequency-division multiplexing access (OFDMA) technology that is designed to achieve higher capacity and lower cost per bit compared with traditional 3 and 3.5G cellular technologies.

Mobile/Wireless
PHS service operator Willcom aims to attract more Japanese subscribers with its next-generation personal handyphone system and new handsets. Willcom has branded the new PHS service Willcom CORE. Slated for launch next April in Tokyo, it will feature speeds of several tens of megabits per second. The company intends to expand the service by the following fall to all major cities, while also ultimately boosting the transmission speed to 100mbps and beyond. PHS handsets are currently far slower than cell phones, but next-generation PHS will not lose out on speed.

Hardware
Sony has signed an agreement with the top US cable companies that leads the way for televisions to receive digital signals without the need for a television set-top box. US cable television customers currently use set-top boxes, which are made by companies such as Motorola or Cisco Systems, the owner of Scientific Atlanta. Other consumer electronics companies have also been invited to formally join the memorandum of understanding Sony negotiated with Comcast, Time Warner Cable, Cox Communications, Charter Communications, Cablevision Systems and Bright House Networks.

Hitachi aims to slash its annual cost of procuring basic materials and components by Ñ300 billion ($2.9 billion) to help it cope with surging crude oil and commodity prices, and to achieve its profit ratio commitments for the year to March 2010. Hitachi plans to cut overhead costs by Ñ15 billion, while setting aside Ñ5.0 billion in cash and cash equivalents to cover the rise in borrowing costs. Huge assets will be tapped to improve its cash flow by Ñ5.0 billion, the company said, although it did not specify whether it was planning to sell any of its assets.

Korea

Telecommunications
Datang Telecom Technology said it will expand its cooperation with SK Telecom in order to develop value-added TD-SCDMA services that are in line with China's 3G standard. Chen Shanzhi, spokesman of Datang Telecom, disclosed that the two companies will cooperate on developing TD-based 3G content applications in South Korea and that they will introduce SK Telecom's advanced 3G technology on China's 3G network.

Semiconductors
Hynix Semiconductor is seeking to recover several billion won from Japan for duties paid that were later ruled illegal by the World Trade Organisation. Hynix filed a request to the Japanese government to return tax payments made since January 2006. The WTO has ruled that Japan must abolish the duty by September 1 this year. In November, WTO appeals judges backed an earlier ruling that the 27.2% tariff imposed by Japan on Hynix's semiconductors was illegal. The taxes were introduced following complaints from Japanese chipmakers including Elpida Memory.

Hynix Semiconductor said it will reduce capital investment for this year by 28% to W2.6 trillion ($2.5 billion). The company joins Qimonda and Nanya Technology Corp. in reducing spending for production increases, helping prices recover. The price of the benchmark DRAM chip has gained 12% this quarter after remaining at near record lows since sliding 85% last year, according to Taiwan-based Dramexchange Technology, Asia's biggest spot market for semiconductors.

Samsung Electronics predicts prices may recover later this year as the oversupply eases. Memory chip prices are no longer cost efficient. Still, the industry outlook for the second half remains unclear. Samsung's statement backs Deutsche Bank's forecast that the industry has bottomed and will recover through 2009 because of a significant slowdown in supply growth. Prices of dynamic random access memory (DRAM) chips have rebounded in the past two months after a glut drove major producers, including Samsung, to post losses for the product last quarter.

Samsung Electronics also plans to invest W946.8 billion ($902.2 million) in upgrading memory lines this year. The spending is part of the South Korea-based company's 2008 investment plan of a combined W11 trillion, of which 64% are earmarked for memory products such as DRAM and flash chips. Samsung said in a filing to the Korea Exchange that the spending will help maximise production and improve cost competitiveness. The company also said it has developed a new solid state drive (SSD) which is expected to replace hard disk drives in laptop computers. Samsung said its 256-gigabyte SSD for data storage is 2.4 times faster than traditional hard drives. The company plans to begin production of SSDs this year. The new SSD represents a bold step in the shift to notebooks with significantly improved performance and larger storage capacities.

Hardware
LG Electronics said it too may have to cut its handset prices if Nokia makes the first move. There is market talk that Nokia, the world's largest handset maker, may cut its prices for select cell phone models by up to 20% to grab some US customers away from Motorola. The speculation has fuelled worries that Nokia's weaker rivals, including LG and Samsung Electronics, may be forced to follow suit at the expense of profitability.

China

Semiconductors
NXP Semiconductors and T3G Technologies announced that the 3G cellular system solution T3G7208 is now commercially available to the Chinese market. Special edition T3G7208 TD-SCDMA phones with added push-to-talk functionality have also been provided by Samsung to the Beijing Olympic Games Organising Committee. TD-SCDMA services are currently in commercial trial across eight cities in China, including Beijing, Shanghai and Guangzhou. With the T3G7208-powered Samsung SGH-L288, featuring video telephony, data communication at 384 kbps downlink and 128 kbps uplink and a 2 megapixel camera, end users will be able to employ multimedia and data transfer through the 3G networks.

Telecommunications
Ruey-bin Kao, president of Motorola China, said China is not only Motorola's manufacturing base but also an innovation, research and development base. Motorola has already invested $3.8 billion in China, one of the largest amounts of foreign funds flowing into the country from a single investor, with Tianjin enjoying most of these funds. Since the establishment of MotorolaÆs manufacturing base in China, investment in research and development has accounted for almost $1 billion.

ZTE Corp. announced that its share of the global optic transmission product market grew more than 100% in 2007, far above the industry average of 24%. The company was found to have the second largest market share in the global market sub-sectors for LH-DWDM (Long Haul - Dense Wavelength Division Multiplexing) and ADM (Add/Drop Multiplexer) products in 2007. ZTE generated Rmb6.37 billion ($917.87 million) in revenue from its optic communication and data communication system products, up 64.3% year-on-year due to increased sales.

ZTE Corp. has been selected by Zapp, Romania's fourth largest mobile operator, to roll out a WCDMA/HSDPA commercial network as well as to upgrade Zapp's CDMA network to CDMA2000. Zapp plans to launch 3G commercial services in early autumn this year, and the WCDMA/HSDPA network is slated for completion by 2011. The new network will enhance the quality and speed of services offered by Zapp by increasing its data transfer rate from 2.4 Megabits per second (Mbps) to up to 7.2 Mbps.

China GrenTech expects China's long-awaited telecoms industry overhaul to spur multi-billion dollar spending on networks and drive its revenue considerably higher in 2009. If the telecom revamp can be completed by the end of September as expected, revenue growth at GrenTech, a small-cap firm which makes networking components that can boost signals in sites from subways to skyscrapers, could rise a further 5-10 percentage points this year.

Mobile/Wireless
China Mobile has begun to allow ZTE, Yulong, Samsung and LG to sell TD-SCDMA handsets directly to customers through China Mobile service centres in the eight cities where China Mobile is conducting TD-SCDMA network trials, signalling a step up from the trial of TD-SCDMA handsets to full commercialisation. Prior to the move, China Mobile's service centres only sold TD-SCDMA handsets that the operator had purchased from handset manufacturers to sell to customers taking part in the trials.

Media, Entertainment and Gaming
Chinese online game developer and operator NetDragon Websoft plans to switch its listing to Hong Kong's main board from the growth enterprise market (GEM). The company has received in-principle approval from the listing committee of the stock exchange for the switch. It expects the company's shares to start trading on the main board on June 24, subject to shareholders' approval at a special meeting on June 12. The company made its GEM board debut in November last year and was added to the Morgan Stanley Capital International (MSCI) China Index as of the market close on May 30, 2008.

Beijing Gehua CATV Network (BGCTV) said it will invest $17.03 million in a joint venture with two foreign companies to provide broadband access services to residents and business customers. BGCTV will have a 51% stake in the joint venture, while the two foreign companies, Liberty Global and PRC Venture Partners, will hold the remaining 49%. The joint venture will need a total investment of $100 million, of which the three parties will invest $33.4 million. The remaining funds will be raised through other means.

Hardware
Haier is considering buying the consumer electrical appliance business of General Electric (GE) and is in discussion with China Development Bank on acquisition financing. The GE unit is mainly involved in manufacturing of electrical appliances such as refrigerators, bakers, and dish-washing machines. Haier has not yet contacted GE about the acquisition. The acquisition cost of the GE unit is expected to be between $4 billion and $8 billion.

Investments/Ventures
Dragon Capital Group, a holding company of emerging high-tech companies in China, reported that its unaudited consolidated revenue for the year ended December 31, 2007, was approximately $47.8 million, an increase of 13% from $42.3 million in 2006. Gross profit on an unaudited basis for 2007 increased 53% to $4.6 million. In the fourth quarter, the companyÆs consolidated revenue was $14.3 million, an increase of 14% percent from the comparable quarter in 2006, and a sequential improvement of 21% from $11.8 million in the third quarter of 2007.

Taiwan

Telecommunications
Darfon Electronic Corp., a manufacturer of telecommunication components and precision devices, has secured orders for IMR (in-mould rolling) notebook PC housings, which likely will contribute NT$2 billion-NT$3 billion ($65.8 million-$98.7 million) to corporate revenues this year. The success of Eee PC, a low-priced laptop developed by Asustek Computer, has attracted Acer and Hewlett-Packard to venture into the field and spurred demand for IMR housings worldwide. As only a few housing suppliers globally, including Hon Hai Precision Industry and Benten International, are capable of mass production of IMR housings, Darfon is quite confident of carving out a niche with this product.

The Taiwan government is planning to sell a 7% stake in Chunghwa Telecom to help finance a NT$120 billion ($3.9 billion) outlay that will be part of the revised budget for 2008, the Commercial Times has reported. In order not to adversely affect its share price at home, the government is inclined to sell Chunghwa Telecom shares overseas, a move expected to raise more than $1.6 billion. Of the NT$120 billion outlay, some NT$58.3 billion will be used to support infrastructure projects of local governments to help stimulate domestic demand.

Hardware
Asustek Computer recently unveiled its new P320 series PDA phone and aims to sell 20,000 units in Taiwan by the end of this year. Asustek plans to sell 200,000 handsets in the Asia-Pacific market this year, including 50,000 units in Taiwan, and expects to achieve 40% of this in the first half of the year. The brand heavily focuses on promoting the P320 PDA phone and has already doubled its single-month sales goal in India to 4,000 units, due to its increasing popularity in the market.

Semiconductors
Taiwan Semiconductor Manufacturing Co (TSMC) is studying a possible increase in contract manufacturing prices for semiconductor chips. The company is yet to make a final decision on the magnitude and timing of any price adjustment. TSMC is of the view that a broad price hike is warranted even as it expects the semiconductor industry to continue to be characterised by Moore's Law. The company was referring to an observation initiated by Intel co-founder Gordon Moore that the volume of transistors that can be inexpensively squeezed into an integrated circuit will double approximately every two years.

Chips designed by MediaTek have been adopted by fashion house Christian Dior for a $5,000 mobile phone meant for the Russian and Chinese markets. Designed and assembled by the ModeLabs Group, the ôMy Diorö handset was launched on May 21, 2008.

Hong Kong

Internet
E-Mice Solutions wants to boost the government's loss-making online identification platform by allowing parents to use it to monitor their children's performance at school. The operator plans to bundle intranet networks used by schools for attendance and parent-school communication to allow parents to check their child's progress. The Hong Kong-based information technology firm secured an exclusive contract to operate e-Cert for four years last year, but is concerned the service is not attracting enough users. Extending it to the schoolyard may boost its popularity. E-Cert was developed by Hong Kong Post in 2000 and was the first publicly recognised certification authority under the Electronic Transactions Ordinance.

Telecommunications
PCCW is about to announce another overseas project in a few weeks, joining regional rivals Singapore Telecommunications and TaiwanÆs Chunghwa Telecom in expanding overseas to boost domestic earnings. Competition in its home market, where there are more fixed-line connections than households, may intensify this year as new licenses are issued. In February, PCCW partnered with Mawarid Group to win a license to provide fixed-line phone and broadband Internet services in Saudi Arabia.

PCCW said it will reorganise its telecom and media businesses under a new holding company, HKT Group Holdings, of which it may sell up to 45%. The restructuring is aimed at improving operational efficiency and reducing the tax rate. PCCW said in a statement that the reorganisation will consolidate all components of its ôquadruple-playö offering û fixed-line, mobile, broadband and internet TV services û in a transparent and easily understood corporate structure that would facilitate a listing for the new holding company.

CSL has warned PCCW that it faces legal action after the fixed-line giant increased connection fees for mobile operators by 25%. The move was cited as an unfair bid to squeeze the industry as its monopoly comes to an end. CSL chief executive Tarek Robbiati claims PCCW's decision to increase the fee from 4.36 HK cents to 5.45 HK cents a minute without consulting the industry is a form of economic abuse. Robbiati warned that operators will be forced to pass on costs to consumers and slash jobs.

Hardware
Lenovo said that strong demand for PCs in emerging markets and growing sales of notebooks would protect its business from an uncertain outlook in the US. The Chinese PC vendor also said it was hunting for possible acquisitions, following its purchase of IBMÆs PC unit three years ago and a failed attempt to buy EuropeÆs Packard Bell last year. However, it was not in talks with any potential target companies. LenovoÆs revenue has jumped five times since the IBM acquisition, while net profits have more than tripled.
India/Indonesia/Philippines

Telecommunications
IndiaÆs Bharti Airtel has ended merger talks with MTN after the latter presented a new structure under which Bharti Airtel would become a subsidiary of the South African company. Chairman Sunil Mittal and Singapore Telecommunications would have had to exchange their majority stake in Bharti Airtel for a controlling stake in MTN, according to the structure. Bharti is valued at $38.4 billion. The end of the talks is positive for Bharti's share price as it lifts the cloud of uncertainty that was hanging over it. From a long-term perspective, it is negative though, because Bharti would have benefited from the expansion of its operations.

PT Telekomunikasi Indonesia (Telkom) is planning to allocate $2.5 billion for consolidated capital expenditure this year, up from $2 billion in 2007. Telkom subsidiary PT Telekomunikasi Selular (Telkomsel) is expected to allocate between $1.5 billion and $1.7 billion for its infrastructure network expansion. About 30%-40% of the capex requirements will be financed by bond sales or bank loans, while the remainder will come from internal cash.

Telekom Indonesia posted a net profit of Rp3.2 trillion ($344 million) in the first quarter of this year, up 5.4% year-on-year. The company booked sales of Rp15 trillion, an 8.5% increase from a year earlier. Ebitda increased by 6.2% to Rp9.34 trillion. Telkom also said its full-year net profit for 2007 rose by 16.8% to Rp12.86 trillion ($1.4 billion), while full-year sales improved 15.9% year-on-year to Rp59.44 trillion. Its mobile business recorded revenue of Rp5.97 trillion in the first quarter, up from Rp5.58 trillion a year earlier, boosted by a 283% percent increase in minutes of usage and 32% growth in its subscriber base. The number of fixed-line subscribers fell by 0.5% to 8.66 million, while the number of fixed-wireless subscribers surged by 46.2% to 6.72 million.

Philippine Long-Distance Telephone Co (PLDT) will launch a $550 million Asia-America fibre cable network under the name of the Asia-America Gateway (AAG). The 20,000-kilometre facility will connect the Philippines, Malaysia, Singapore, Thailand, Brunei Darussalam, Vietnam, Hong Kong, Guam, Hawaii and the US west coast and will provide a welcome boost to business process outsourcing firms, call centres and other growth industries that depend on advanced telecommunications services and thus further propel the country's economic growth.

A consumer group in the Philippines has thrown its support behind a bid by some lawmakers to remove charges on text messaging. TXTPower is calling for a refund of all the "illegal" charges levelled on consumers, including the value-added tax (VAT) that it says is "illegally levied" on text messages. The group urged the National Telecommunications Commission (NTC) and the Bureau of Internal Revenue (BIR) to find out how much the telecom firms and the government owe the consumers and to find out the quickest and most fair way of undertake a refund.

Pilipino Telephone Corporation (Piltel), a subsidiary of Philippine Long-Distance Telephone Co (PLDT), remains bullish on the market despite the current crisis. Piltel president Napoleon Nazareno projected the company's core net income will reach more than Ps8.5 billion-Ps9.5 billion ($195 million-$218 million) in 2008, compared with the Ps8.5 billion it posted last year. Nazareno admitted, however, that he remains cautious about the company's outlook for this year due to rising inflation. The inflation rate in the Philippines has risen to 8.3%, the highest since May 2005, due to high food and oil prices. But Nazareno said so far the company has not seen any negative impact in terms of purchasing power.

Telekomunikasi Indonesia (Telkom) is ready to buy back the 36% stake that Singapore Telecommunications (Singtel) owns in its mobile subsidiary Telkomsel. Telkom still controls 65% of Telkomsel. Telkom also wishes to buy back the public's stake in Telkom worth Rp10 trillion ($234.8 billion) and says it has already bought back Rp5 trillion worth of shares.
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