A week in tech

A round up of all the latest tech news in Asia.



- Kyocera Corp. cut its outlook for profit for its first fiscal half as mobile phone and copier sales remain weak. But the major maker of electronic components stood by its earnings forecast for the year through March as it expects stronger sales in the fiscal second half. Kyocera slashed its profit outlook for the first half, which ends Sept. 30, to ¥13 billion ($112.7 million) from a previous forecast of ¥22 billion ($191.3 million), and cut its sales outlook to ¥520 billion ($4.5 billion) from ¥550 billion ($4.8 billion).

- Marubeni Corp. has forged an alliance with Matrics Inc. and obtained exclusive marketing rights in Japan to the U.S. firm's RFID (radio frequency identification) smart tags that use UHF (ultrahigh frequencies). RFID tags have read distances five to 10 times those of smart labels that use other frequency bands, and are thus suited for product tracking. Marubeni will test use the RFID tags with the backing of the Ministry of Economy, Trade and Industry, and plans to put them on the market at the end of 2004.

- In a bid to promote use of its Memory Stick, Sony Corp. will soon release technical information for the stick to electronics manufacturers for an annual fee of ¥500,000 ($4,386). Sony hopes that the move will encourage manufacturers to develop products that utilize the Memory Stick, in turn putting Sony in a better position to compete with other memory cards developers. Some 470 firms now make products compatible with the Memory Stick and cumulative shipments of such products total about 50 million. The digital storage device's global market share is estimated at almost 30% in terms of sales volume in 2003.

- Toshiba Corp. warned it would post a deeper first-half loss than expected and cut its full-year earnings outlook, citing global price competition as the culprit. Toshiba's losses from its digital products division, home of its mainstay notebook personal computers, have offset a solid performance by its semiconductor division. As a result, it now expects a net loss of ¥25 billion ($212.8 million) for the six months ending Sept. 30, wider than the ¥15 billion ($131.6 million) loss it previously forecast. Toshiba also said it expects to post an operating loss of about ¥10 billion ($87.7 million), giving up its earlier hopes of beating its previous-year operating profit of ¥29 billion ($254.4 million).

Information Technology

- Fujitsu Ltd. has landed a contract to supply the U.K. government with system designed to provide administrative services via the Internet. The deal is worth 930 million pounds sterling ($1.5 billion). The system, to be used for tax collection by Customs and Excise, will enable taxpayers to file for indirect-tax returns and for tax rebates over the Internet. The contract will also cover system maintenance services for 10 years. Fujitsu Services will take care of the delivery of the system, which is due to start from 2004, as well as maintenance services. The system will be one of the largest of its kind in Europe.

Life Sciences

- Matsushita Electric Industrial Co., Sumitomo Corp. and U.S. firm Quantum Dot Corp. have jointly developed a new system that can greatly reduce the cost of gene analysis. This new system uses 10-nanometer crystal particles colored with a fluorescent color to efficiently classify multiple genes in accordance with their properties. It offers high precision and can analyze 200 types of genes at once, thereby reducing the price tag per test to around 1/10 the current cost. Conventional systems are limited to analyzing many types of genes at once with low precision or a few types with high precision.

Media, Entertainment and Gaming

- NEC Corp. and the Japanese units of Microsoft Corp. and Intel Corp. announced that they will collaborate in the area of digital movies. They will supply software and equipment to produce, distribute and screen films. Microsoft Co. will provide software to produce and show movies, while NEC will offer projectors and servers. Together, the companies will outfit commercial facilities, such as theaters and karaoke clubs with the systems. Digital movies, which eliminate the need for the creation of additional prints and for special technical expertise in screening, have gained ground in the U.S. In Japan, firms such as Toei Co. are making use of digital technology.

Mobile / Wireless

- J-Phone Co. plans as early as this year to begin offering a cellular phone that enables consumers to watch television programs, the first in Japan. Although allowing consumers to watch TV via cell phone will not add to their charges, the company believes that a TV, like a built-in camera, will eventually become an indispensable function of cell phones. The handset incorporating a TV tuner is being developed by NEC Corp. With the current technology, battery life is only an hour while watching TV.


- Mitsui & Co. in a tie-up with Sun Microsystems KK, will market inexpensive fault-tolerant computer systems to the financial and telecommunications industries. The systems will meet the high-volume, real-time data-processing needs of companies in these industries, but at just 20% of the price of conventional mainframe systems. Mitsui will sell systems that combine Sun computers running the Solaris operating system with software developed by the U.S. firm Kabira Technologies Inc.


- NTT Communications Corp. plans to begin a new service in October, performing computer maintenance on an outsourcing basis for corporate clients. The company will offer a full range of maintenance operations, including installation of applications software and virus protection. By combining these operations in an integrated package, the firm says it can cut its clients' costs for these operations by more than 30%. Client computers will be linked to NTT Communications' network round-the-clock, allowing many maintenance operations to be handled remotely. There will also be a help line, so customers can speak with technicians when needed.

- KDDI Corp. and Ripplewood Holdings LLC are among the leading candidates for the restructuring of failed data communications company Crosswave Communications Inc. Crosswave's is expected to pick a final candidate as early as October. Crosswave had built costly fiber-optic networks and data centers then filed for bankruptcy protection from creditors last month, with liabilities totaling some ¥68 billion ($596.5 million). KDDI has a long-term contract to lease a fiber-optic network to Crosswave and hopes that by becoming a sponsor for the restructuring of Crosswave, KDDI could reap synergies from their businesses. Ripplewood, in line with last month acquisition of Japan Telecom Co., hopes to grow its data communications services business.



- Samsung plans to co-market a new line of digital music players with the soon-to-be-relaunched Napster 2.0 service, in the latest move to stoke up its brand image among youthful consumers. The new Napster-ready device will be available in retail stores this fall. The Samsung devices will be co-branded and identified as "Napster compatible" on the packaging. The 500,000 song titles will be available from all five major record labels and hundreds of independent labels, according to Roxio.


- The Korean government will help build a new digital broadband network utilizing the country's cable network by 2007, a move that is expected to solidify the positions of local cable TV network operators. This venture will help transform the existing analog cable TV infrastructure into a digital one, paving the way for a new services that could offer 100 Mbps-class data transmission, or about 100 times faster than today's digital subscriber line. The domestic cable industry expects the Information Ministry's initiative to infuse fresh momentum into local operators, many of which are struggling to bolster profitability amidst steep competition among local operators.


- Hynix Semiconductor Inc. plans to more than double capital expenditures next year to about 1.5 trillion won ($1.28 billion), financing the spending in part with proceeds from the spin-off of its non-memory operations. The firm is targeting revenue of 3.5 trillion won ($3 billion) this year, confident it will reach an operating profit by the fourth quarter.


- The LG Group is raising the stakes by intensifying its attempt to take over Hanaro Telecom Inc. even after government officials repeatedly endorsed another deal with foreign investors. LG reaffirmed its intention to acquire Hanaro in a bid to consolidate and strengthen its telecom business despite growing concerns that this would have a negative impact on the market.



- Nortel Networks Corp. plans to invest $200 million over a three-year period to bolster its research and development capabilities in China. The firm expects to double the number of R&D employees it has in China and pledged to build a 55,000-square meter campus in the Beijing's Chao Yang District. The first phase, which will include 27,000 square meters, is slated for completion by late 2004. The company noted that its current facilities in Beijing and Guangzhou will continue to play an important role alongside the new campus in developing technology.

Mobile / Wireless

- China has delayed a long-awaited decision on next-generation mobile phones until next year to conduct more tests and consider issues such as how to finance the networks. Cellphone technology vendors such as Qualcomm have been waiting for regulators in the world's biggest cell phone market to give the green light to start building third-generation (3G) networks offering high-speed data services. The Ministry of Information Industries, the sector regulator, was holding fresh tests of different 3G technologies, and a final report on the results was not expected until September 2004.


- Infineon Technologies AG plans to invest $1.2 billion in China during the next four years as it competes to grab a bigger share of the fast-growing local market expected to reach $80 billion by 2007. Infineon will invest $240 million in a dynamic random-access memory, or DRAM, chip assembly and testing facility in Suzhou, outside Shanghai, with China-Singapore Suzhou Industrial Park Venture Co. Infineon also will invest more than $45 million to train engineers and will spend $70 million for information technology and infrastructure for research and development.



- Growing demand for more advanced processing technologies should be a boon for contract chipmakers Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corp (UMC). The two companies also expect to increase capital spending as the cyclical semiconductor industry recovers from a downturn that began in mid-2000. TSMC' reiterated its commitment to spending $1.2 billion on plant and equipment upgrades this year and said the figure could rise next year. TSMC commands 51% of the market and last week posted record monthly sales of NT$18.31 billion ($535 million).

- Taiwan Semiconductor Manufacturing Company (TSMC), expects a semiconductor industry slowdown in 2005 as Chinese mainland producers come on stream and over-supply again becomes a problem. The expected 2005 slowdown would follow growth in revenue terms of 11 per cent for the semiconductor industry this year and 17% next year, according to TSMC. The firm does not expect the possible industry pullback in 2005 to prove as severe as that experienced in 2001, and it would most likely be similar to that of the early 1990s.

Singapore / Malaysia / Philippines / Indonesia


- Chartered Semiconductor Manufacturing Ltd has formed an alliance that will secure third-party know-how and help it improve business prospects. The alliance, based on several individual deals with companies, should help the Singapore semiconductor maker narrow the technology gap that has prevented it from competing effectively with its Taiwanese rivals, Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp. The alliance brings together critical technologies from design houses and chip intellectual property companies and allows it to offer its customers an entire range of services for its latest chips with 90-nanometer circuitry.

Hong Kong


- Hutchison Whampoa Ltd. has been punished by investors for its costly foray into 3G wireless services, but six months after unleashing 3G in European market it is winning over skeptics. Strong earnings, a growing global economy, and increasing, though patchy, signs of success for its 3G entry into the U.K. and Italy have lifted shares in the Hong Kong-listed conglomerate whose main cash cows are its port and finance operations.

- Sunday Communications is hoping to take advantage of improved investor sentiment in an effort to raise HK$1 billion ($128.4 million) to fund its third-generation (3G) mobile service launch next year. Managing director Bruce Hicks said the company had received a number of financing proposals from bankers and vendors, but no deal would be struck until early next year. The financing, which Mr Hicks said would combine loans with vendor credits, could be lower than Sunday's initial three-year 3G capital expenditure budget of HK$1.2 billion ($154 million) and would replace HK$547 million ($70.2 million) of existing vendor finance.

- Hutchison Whampoa is stepping up efforts to market its third-generation (3G) mobile phone services in Italy with a plan to give away video-phone handsets. Hutchison subsidiary 3 Italia will give the free handsets to new customers who spend at least 30 euros ($33.3) per month and pay a 99 euro ($112.3) sign-up fee before the end of next month. The unit has already signed up 300,000 users to its services.

A week in tech is brought to you by FinanceAsia, and IRG, Asia's boutique investment bank to the telecoms, media and tech sectors. More can be found at:

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