- Hitachi Ltd. reported a 43% plunge in net profit for the year ended March 31, hurt by hefty restructuring costs to reshape its business and increased tax payments. Hitachi posted a group net profit of ¥15.9 billion ($144.5 million), down from ¥27.9 billion ($252.5 million) for the prior fiscal year. But the Tokyo-based company's core electronics operations enjoyed a recovery on brisk demand for digital electronics products. Sales increased 5.4% to ¥8.6 trillion ($78.2 billion) from ¥8.2 trillion ($74.2 billion). Operating profit rose 21% to ¥184.9 billion ($1.7 billion). For the fiscal year ending in March 2005, Hitachi projects a group net profit of ¥100 billion ($906 million), an operating profit of ¥300 billion ($2.7 billion) and revenue of ¥8.8 trillion ($79.7 billion).
- Sharp Corp. will begin in-house production of backlights, a vital component of LCDs (liquid crystal displays), in China as early as this month. The company has set up in Jiangsu Province a subsidiary charged with developing, manufacturing and marketing the product. Sharp will take a 60% stake and a Taiwanese subsidiary the remaining 40% in the new yet to be named firm. Its employees will total 500 by year-end. Backlight production at the Chinese subsidiary will begin with 50,000 units a month and will increase to 100,000 units as early as this fall.
- Sony reported that restructuring costs, sluggish computer game sales and a stronger yen cut its net profit by 23.4% in the year to March. The Japanese company posted a group net profit of ¥88.5 billion ($816 million) in the year to March, down from ¥115.5 billion ($1.0 billion) the previous year. The fall was widely expected and the figures were in line with the company's own forecasts. Pre-tax profit fell 41.8% to ¥144.1 billion ($1.3 billion) while sales rose only 0.3% to ¥7.5 trillion ($68 billion) and adding that without the impact of currency fluctuations, sales would have gained 3%.
- Toshiba reported its year to March group net profit rose 55.7% to ¥28.8 billion ($272 million), buoyed by demand for audio-visual products. Pre-tax profit almost tripled to ¥145.0 billion ($1.3 billion) while sales dropped 7.4% to ¥5.6 trillion ($50.7 billion). The company stated that lower sales were caused by the transfer of some businesses to joint ventures, which had contributed ¥176 billion ($1.6 million) to sales in the previous year.
- NEC returned to the black with a full-year net profit of $377 million thanks to strong sales of cell phones and gains from stock issues by subsidiaries. NEC's group net profit in the year to March came to ¥41.1 billion ($377 million) compared with a net loss of ¥24.6 billion ($222.9 million) a year earlier. Pre-tax profit nearly tripled to ¥160.5 billion ($1.5 billion) on sales of ¥4.9 trillion ($44.5 billion), up 4.5%.
Media, Entertainment and Gaming
- Hitachi Ltd. has developed a cellular phone chip that nearly quintuples image-processing speed, enabling video game characters to move faster and more smoothly. The chip is for cell phones incorporating Java technology, which is used to move animated images. Cell phones have been able to process just 10 frames per second until now, but Hitachi's new chip will enable a cell phone to display 46 frames per second -- a level comparable to that of Sony Computer Entertainment Inc.'s PlayStation 2 console. The new chip will also reduce power consumption by up to 90%, enabling cell phone users to play much longer without recharging.
Mobile / Wireless
- Sony Ericsson is looking to regain its seat in the elite group of the top five mobile phone makers, selling 8.8 million handsets during the first quarter, 50,000 more than its closest Korean rival, LG Electronics Inc. LG Electronics, with 5.3% market share, replaced Sony Ericsson in the No. 5 slot, pushing it down to sixth place last year by a difference of just 0.1 percentage point, according to market research firm Strategy Analytics.
- Using technology from Microsoft Corp. of the U.S., Turbolinux Inc. has developed software to play music and video files on personal computers running on Linux. The software will be bundled with the Japanese company's version of Linux for household use that will be released May 28. The software will be sold in the U.S. and China as well. One factor inhibiting the widespread adoption of the Linux operating system is the lack of application software. By paying Microsoft for its widely used technology, Turbolinux is eyeing the development of a high-quality player for Linux-based computers. Turbolinux is believed to have spent an estimated ¥10 million ($90,600) to develop this software, including license fees to Microsoft. The Japanese software company will also pay royalties to the U.S. software giant based on sales of the software.
- NTT Data Corp. will team up with six major computer makers in order to upgrade an open system that can use software regardless of manufacturers of computers. NTT Data and the computer makers will improve upon the central processing units of servers and operating systems with a view to eliminating any technical glitches. The team will aim to make the performances of their systems as stable as those of large computers and promote them to companies and government agencies. The six computer makers are Fujitsu Ltd., Hitachi Ltd., NEC Corp., IBM Japan Ltd., Hewlett-Packard Japan Ltd. and Sun Microsystems KK.
- KDDI reported net profit more than doubled to a record $1.1 billion in the year to March on the back of growing mobile phone subscribers. KDDI's consolidated net profit came to ¥117 billion ($1.1 billion) from ¥57.4 billion ($1.7 billion) the previous year. Recurring profit jumped 142% to ¥274.5 billion ($247.2 million), also a record, on revenue of ¥2.9 trillion ($25.8 billion), up 2.2%.
- The Japanese government planned to speed up sales of its shareholdings in telecommunications giant NTT after seeing the recent rebound in the stock market. The Ministry of Finance was considering unloading more of the stock when Nippon Telegraph and Telephone (NTT) buys back its own shares so the company's action would not directly affect the supply-demand balance in the stock market. The ministry, which owns a 45.4% stake in the former monopoly, decided to unload about one million of the shares through public offerings at home and abroad around this fall. The government intended to sell a portion of its remaining 920,000 shares to NTT. The ministry expected that planned sales of more shares to NTT would help the government improve its finances.
- In its largest monthly output ever, Samsung Electronics Co. sold more than $850 million worth of liquid-crystal displays last month, capping off an impressive first quarter that saw the company overtake LG-Philips LCD as the global sales leader. According to market research group DisplaySearch, Samsung had W1.1 trillion won ($860 million) in LCD sales during March, an increase from January and February when the company sold $770 million and $790 million respectively. Samsung cumulative LCD sales reached $2.4 billion in the first quarter, a 20% increase from the same period last year. Industry rival LG-Philips, a 50-50 joint venture between LG Electronics Inc. and the Netherlands' Royal Philips Electronics NV, marked a 3% gain from last year with sales of $1.9 billion for the quarter. Taiwan's AU Optronics Corp. finished third with $1.2 billion.
Mobile / Wireless
- More than 900,000 SK Telecom subscribers switched services to the two smaller cellular phone operators under the number portability policy through this month. According to statistics tracked by the mobile carriers through April 28, KFT attracted 532,900 users from SK Telecom while LG Telecom secured 383,100 subscribers. For this month, KTF and LG Telecom added 113,000 and 96,000 customers through number portability, respectively. With an average of 8,000 people changing mobile operators each day, industry insiders predict the total number of migrating cell phone users will reach 1 million by early next month.
- SK Telecom, has agreed to work with German business software company SAP to develop wireless enterprise resource planning programs and other mobile solutions for corporate clients. The companies signed a memorandum of understanding to share technological advancements in building a new service model that expands computerized operating systems of companies to the wireless communication sector. SK Telecom declined to give specific plans of product development. SAP is the world's largest collaborative business software company and the world's third-largest independent software supplier overall.
- Hynix Semiconductor Inc. posted a first-quarter net profit on stronger demand and higher chip prices amid a recovery in the semiconductor industry. The company's net profit was W351.1 billion won ($304.1 million), a sharp reversal from a loss of W1 trillion ($852.1 million) a year earlier. Revenue nearly doubled to W1.3 trillion ($1.1 billion) from W681.8 billion ($580.9 million) as shipments of its memory chips as well as non-memory products rose. The strong results reflect the company's slow recovery from a bruising fall following a near three-year slump in the semiconductor industry. Hynix, like other global memory-chip makers, benefited from firm prices for dynamic random-access memory, or DRAM, chips because of tight supply in the market in the first quarter. Traditionally, demand for DRAMs is weak in the first and second quarters, following a seasonally strong fourth quarter fuelled by back-to-school and year-end holiday demand.
- SK Telecom Co.'s first-quarter net profit rose slightly as increased revenue from wireless Internet services helped offset hefty marketing costs. South Korea's second-largest company in terms of market capitalization said net profit rose 1% to W453 billion ($387.2 million) for the three months ended March 31, compared with W449 billion ($382.6 million) a year earlier. Revenue rose 7% to W2.4 trillion ($2.0 billion) from W2.2 trillion ($1.9 billion).
- TCL International Holdings Ltd. reported that first-quarter net profit rose 55% from a year earlier, driven by an increase in overseas sales of television sets and improved margins stemming from a better product mix. The Chinese consumer-electronics unit of Shenzhen-listed TCL Corp. stated net profit rose to HK$253 million ($32.4 million) from HK$163 million ($20.9 million) a year earlier. The company sold one million television sets outside China, while sales at home rose 7% to 2.2 million sets. This year, TCL intends to sell 9.4 million sets in the domestic market and 4.5 million abroad.
- China has shut down 8,600 internet cafes in the last two months as part of an ongoing crackdown on the media. Overseeing the crackdown was a special bureau headed by the Ministry of Culture, which has linked up with 10 other ministries responsible for areas including education, law, finance, civil affairs, youth and telecommunications. Despite government restrictions, China is second only to the United States in the number of people online, with users rising to 79.5 million by December 2003 from 59.1 million a year earlier.
Mobile / Wireless
- China Mobile Ltd. plans to purchase 10 provincial mobile-phone networks in a $3.7 billion deal that will make it the only wireless provider with access to all of China. The company will pay state-owned China Mobile Communications Corp. $2 billion in cash for the networks in 10 provinces. The balance of $1.7 billion will be structured as 15-year subordinated debt and paid over that period. The company will finance the remainder with internal cash, and is also considering issuing bonds. China Mobile also will assume $469 million of debt held by the networks. The networks are located in less developed parts of the country -- Gansu, Guizhou, Heilongjiang, Inner Mongolia, Jilin, Ningxia, Qinghai, Tibet, Xinjiang and Yunnan. The deal will add 24.5 million more subscribers to China Mobile's base raising it to 166 million subscriptions, based on year-end 2003 figures. After the deal, China Mobile will control 31 networks across China, making it the only provider to cover the whole Chinese market. The acquisition is the company's fifth since 1997, and marks the final stage of its subscriber-base expansion through the purchase of its parent's networks.
- Shanghai-based chipmaker BCD will raise about $50 million in a third round of venture-capital financing. The company, which makes chips under its own brand name for mainland electronics manufacturers, also hopes to sell shares to the public. Any capital raised is likely to be used to expand production capacity. BCD stands in the shadows of larger peers such as Semiconductor Manufacturing International Corp (SMIC), which became the first mainland chipmaker to list last month. The two differ significantly. BCD makes chips for the domestic market using second-hand equipment. SMIC uses new equipment that must be depreciated over several years. It ships 50% of its output to mainland customers and competes with powerhouses such as Taiwan Semiconductor Manufacturing for global orders.
- China Netcom will scale back the size of its initial public offering and list two months later than planned amid growing investor scepticism toward mainland plays. China's second-largest fixed-line network had lowered its fund raising target to $1.5 billion from $2 billion. The IPO, sponsored by Goldman Sachs and Citigroup, will launch in September at the earliest. China Netcom was unlikely to float this summer because of the complexity in preparing and auditing such a large listing, the last of the mainland's four telecommunications operators to come to market.
- AU Optronics, reported its first quarter net profit rose about 65 times to NT$11.6 billion ($352.1 million), on the back of strong demand. The company's sales reached NT$14.3 billion ($430.7 million) in the latest quarter, up 20.2% compared with the previous quarter. AU Optronics forecast a 2004 net profit of NT$41.7 billion ($1.3 billion), up from NT$15.7 billion ($470.7 million) registered in 2003. Sales in 2004 were estimated at NT$187 billion ($5.6 billion), nearly doubling from NT$97.6 billion ($2.9 billion) a year earlier.
- Taiwan Semiconductor Manufacturing Co.'s first-quarter net income climbed more than fourfold and it forecast a double-digit sequential increase in wafer shipments in the current quarter. TSMC reported net income of NT$18.8 billion ($565.1 million) for the latest quarter, up sharply from NT$4.4 billion ($131.0 million) in the year-earlier quarter. Revenue increased 46% to NT$57.5 billion ($1.7 billion) from NT$39.3 billion ($1.2 million). TSMC's gross margin for the quarter improved slightly to 39.5% from 39.3% in the previous quarter due to higher utilization levels. Its net margin improved substantially to 32.7% compared to 27.7% in the first quarter.
- Taiwan Semiconductor Manufacturing Company (TSMC) is facing another court case in the United States, after suffering a setback last week in its litigation against mainland chipmaker Semiconductor Manufacturing International Corp (SMIC). TSMC is on the defensive after US chipmaker UniRAM Technology named the company in a separate patent infringement suit. SMIC in court filings said it would argue that patents identified in the suit were invalid, and seek to have TSMC's claims dismissed. TSMC yesterday also denied allegations it had supplied trade secrets belonging to UniRAM Technology to Monolithic System Technology (MoSys). UniRAM has named MoSys and TSMC in a suit alleging patent infringement.
- Chunghwa Telecom reported its March quarter net profit rose 19.5 percent year-on-year to NT$12.9 billion ($390.5 million) thanks to its broadband and mobile phone businesses. Its sales during the three month period came in at NT$45 billion ($1.3 billion), up from NT$43.2 billion ($1.3 billion) registered a year ago.
- iPass, a provider of internet connectivity in more than 150 countries has chosen Hong Kong as the preferred centre of its Asia-Pacific operations. iPass' decision to move from the company's old regional base in Singapore had been easy. Cost was even less of an issue as the company employs only six people to manage its regional business. Businesses use iPass technology to enable employees to access their networks securely. Other roaming customers use the service exclusively for internet access. The company now connects users at 67 airports, 3,357 hotels and 6,000 internet cafes, and has regular roaming agreements with internet service providers. It has 10,318 global hot spots, up from 1,288 a year ago. Of these, 9,000 are wireless.
Mobile / Wireless
- Hutchison Whampoa threatened to sue the Office of the Telecommunications Authority (OFTA), which wants to confiscate the company's underused CDMA spectrum and re-auction it. Now Hutchison is taking a different tack, as it appears the company may want to use the spectrum after all. Equipment vendors are reportedly being asked by the company to submit informal bids for the construction of a pristine new third-generation (3G) CDMA 2000 network.
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