A week in tech

All the latest tech news from around the region.



- UFJ Bank, a key unit of UFJ Holdings Inc. will begin converting its existing cash/credit cards into the IC format from this autumn. By embedding an IC into the bank's multifunctional card, the smart card can prevent forgery and abuse. It will also serve as a point card, allowing cardholders to accumulate points when they shop at affiliated retailers. Such conversions will start with the new cards to be issued in and after October as well as when existing ones expire. UFJ Bank plans to further diversify the role of the smart card by adding such functions as electronic money and electronic authentication for online shopping through the Internet.


- Matsushita Electric Industrial Co. and Minebea Co. agreed to integrate their operations to make motors for personal computers, cell phones and other information equipment, with a view to setting up a joint venture as early as next April. To survive a price-cutting war with other domestic rivals and Chinese manufacturers, Matsushita Electric will withdraw from domestic production of motors for home appliances, while entrusting such production to its factories in other Asian countries. The new company will take over the output of fan motors, which cool the inside of electronic products like PCs/printers, and small vibrating motors used for cell phones, aiming for annual sales of about ¥100 billion ($856.8 million).


- Yahoo! Japan Corp. will execute a 2-for-1 stock split on Nov. 20 for registered shareholders as of Sept. 30. The company currently has a total of 942,403 shares outstanding. Yahoo! Japan is listed on Japan's Jasdaq market for start-ups, and filed an application in mid-July to list on the Tokyo Stock Exchange to expand the range of its shareholders.

Media, Entertainment and Gaming

- Sony Corp. said its new camera used in playing videogames is selling well in Europe and that it plans to start selling the gadget in the U.S. and Asia, marking the latest escalation of its battle with Microsoft Corp. Sony’s EyeToy camera for its PlayStation machines is its latest effort to broaden the audience for videogames beyond teenage boys. Both Sony and Microsoft are beginning to lean more heavily on add-on devices such as the EyeToy to squeeze more sales out of their current game machines and increase their share of the fast-growing videogame market. Sony has sold about 400,000 of its EyeToy Play software-and-camera bundles since launching it at the beginning of July in Europe. Users can control their PlayStation videogame machines by waving their arms in front of the camera.

- Nokia announced that it had signed up publisher Electronic Arts in a development deal for its N-Gage gaming device. Nokia the world's largest manufacturer of mobile phone handsets, is making an ambitious push into the competitive video-game market with the global launch of N-Gage, a hybrid phone and gaming platform. The addition of Electronic Arts will give Nokia 20 game titles by Christmas. Nokia said they would come from EA's Sports and Games publishing units, and would not be available for the initial launch.

Mobile / Wireless

- NTT DoCoMo Inc. has developed a technology that increases the speed of its cellular telephone FOMA service by more than 30 times, putting it on par with ADSL service. The technology would enable its handsets to receive television and high-quality music content, which cannot be handled by its current FOMA service. The telecom firm hopes to have the technology deployed as early as 2005. The new technology employs a more efficient form of transmission by allotting to specific users frequencies for intensive use. This allows transmission speeds to reach a maximum of 14Mbps, far faster than the current 384Kbps.


- The NTT Group has agreed to become the largest shareholder in major net access provider Internet Initiative Japan Inc. through a third-party share allocation. The NTT group is expected to take a majority of IIJ's newly offered shares. The two parties are currently in the final stages of talks to decide the size of the equity stake the NTT group should take in IIJ. The share allotment is expected to give the group an interest of around 30%. IIJ is set to announce the share allocation plan, aimed at raising a total of some 12 billion yen. The NTT side is aiming to take about 10 billion yen worth of the shares.

- IBM Japan Ltd. is starting a service that provides infrastructure for call centres using IP networks. The new business will provide contract management of infrastructure necessary to call center operations, including setting up core equipment at the company's location in Chiba Prefecture. Telephone inquiries from consumers on ordinary networks will be routed to the client company's operators, who will be linked by IP lines. Because the new service will enable multiple companies to share equipment rather than purchase such core equipment up front, it can reduce IP call center start-up costs by around 30%.



- Samsung Electro-Mechanics has developed the world's smallest radio-frequency integrated module, a key component of mobile phones. The company said the module is 55% of the size of existing products by some U.S. manufacturers and it also consumes far less electricity than its competitors. Samsung said the development makes it unnecessary to connect an electricity amplifier and a duplexer inside mobile handsets, meaning it could reduce the size of mobile phones by up to 30% and dramatically shorten the time needed for manufacturing and development. The electronics parts affiliate of the Samsung Group will begin high-volume production of the module at the end of the year. It targets a 15% share in the global market by supplying 3 million units next year and 15 million units in 2005.

- Intel Corp.'s promise to establish a high-tech research and development center in Korea this year will greatly contribute to the nation's information technology industry. Intel revealed its plan to develop a convergence technology that merges computing, communications and digital content. The research center will specialize in four technologies - digital home network, wireless fidelity, central processing units for consumer electronics and wireless bandwidths.

Mobile / Wireless

- Korean cell phone makers are rushing to develop new handsets capable of receiving digital multimedia broadcasts, which are expected to kick off by the end of this year. DMB is a third-generation broadcasting technology that will allow mobile phone users to view high-quality TV programs through their handsets. The service will be presented in two forms: ground-based and satellite-based DMB. Samsung Electronics, LG Electronics and Pantech & Curitel, the nation's top three handset makers, are busy developing so-called "DMB phones" in anticipation of demand for the service.

- KT Corp. and Intel Corp. of the U.S. have agreed to cooperate in wireless-telecommunications, digital home networking and broadband-convergence network through joint marketing and research and development efforts. KT, South Korea's largest fixed-line carrier said the two companies will form a joint task force to develop new growth engines in those fields. Neither company disclosed the financial terms of the agreement.

- A Korean venture firm has developed a highly integrated chip that it claims will improve the quality and speed of video streaming on mobile phones. TOMATO LSI Inc. said its chip for liquid crystal displays, named the TL1761, combines the functions of three devices, currently being used in handsets, into one. The development is expected to reduce the size of mobile handsets by up to 30 percent, the startup company explained. The new chip is capable of 260,000 pixels display on LCD screens.


- Hanaro Telecom was struggling to repay debt after its main shareholders failed to lend financial support. The country's second-largest broadband service provider, which was facing difficulties in meeting the August 26 deadline of repaying $100 million in overseas bonds with warrants, has won a grace period for the payment until September 2.



- Huawei Technologies Co. is the partner of choice for outsiders looking to get into China's huge and competitive market for telecommunications equipment. The closely held Shenzhen company this week adds to its roster of partners two more foreign companies that apparently are not deterred by Cisco Systems Inc.'s claim that Huawei copied its software and violated patents. Siemens AG will announce a cooperative project with Huawei on a 3G mobile-phone technology, TD-SCDMA. Also, LightPointe Communications Inc. announced a deal under which Huawei will sell LightPointe's free-space optics gear in China under the Huawei brand.

- Intel Corp. plans to build a $375 million assembly and test plant in western China that is slated to begin operations in 2005 or 2006. Construction on the plant in Chengdu, in Sichuan province, will begin in the second half of 2004 and is expected to be completed in 2005. The company plans to invest about $200 million initially, followed by $175 million over an unspecified period of time. The plan will employ about 675 people, mostly hired locally. Intel already has a testing and assembly plant in China, in Pudong, outside of Shanghai, and has invested $500 million there since it opened in 1999.


- Growth in China's SMS sales has resulted in many portals eagerly trying to either issue bonds or spinning off and listing their SMS units in order to secure capital. Following Tom.com's announcement that it may seek a dual-listing for its SMS and Internet units, Hongkong.com is also looking to take its SMS division public. The Chinadotcom subsidiary recently completed its second purchase of mobile service provider Keen Billion Agents. Tom.com was looking into the possibility of putting its short-messaging, multi-media and online advertising business into a company whose shares might be offered in a dual listing in Hong Kong and the United States. The three Chinese-language portals are among the best performing stocks on the Nasdaq and they have all recently issued double-zero convertible bonds to secure cash for business development.

Mobile / Wireless

- Chinese officials expressed carefully hedged support for a homegrown technology for the next generation of mobile phones but stopped well short of endorsing it as a replacement for international standards. The main backer of the Chinese technology, known as TD-SCDMA, is a state-owned company, Datang Telecom Technology & Industry Group. Datang is promoting it as a domestic alternative to the two technologies that are in use outside China WCDMA and CDMA2000. A decision by the government to require the use of TD-SCDMA in future 3G mobile-phone networks would likely result in domestic vendors getting a larger share of the country's telecom-equipment market.

- Alcatel SA will spend $100 million on research and development in China this year, with almost half of that investment to be directed toward 3G mobile-phone technology. The firm said $45 million of the total will be invested in developing 3G infrastructure and applications, which consist of such things as live video calls, videogames, music and video clips. Alcatel's majority-owned Chinese unit, Alcatel Shanghai Bell, is one of the company's three major R&D centers world-wide.

- China Unicom Ltd. posted a lower-than-expected half-year net profit with significant charges at its CDMA division and widening losses at its ailing paging operation. The overseas listed unit of China's second largest mobile-phone operator had a net profit of 2.4 billion yuan ($288.6 million) in the six months to June, boosted by contributions from nine provincial networks bought from its parent late last year. Despite rising 12% from the restated year-earlier net profit of 2.1 billion yuan ($260 million), the figure came in below analyst expectations. Stripping out the gains from acquisitions would leave a rise in net profit of just 5.1% on year. In the first quarter, the company had a net profit of 1.3 billion yuan ($158 million), indicating that its net profit fell about 15% on quarter to 1.1 billion yuan (US$133.7 million) in the second quarter.



- Asia's semiconductor market was projected to generate $67 billion worth of sales this year, an increase of 14% from a year ago. For 2004, the market would be worth $86 billion. The projected rise in sales in the region would be driven by increased demand in China, South Korea and Taiwan, the three biggest semiconductor markets in Asia. Globally, the semiconductor market is expected to generate revenues of $173 billion this year, up 11% from $156 billion in the previous year.

Singapore / Malaysia / Philippines / Indonesia


- US computer chip giant Intel announced it would invest 152 million ringgit ($40 million) to boost its manufacturing capacity in Malaysia. It would be used to expand its facilities, including opening a new technology design and development center in northern Penang state. Intel would continue to support Malaysia's growth and technology development but did not specify how many years the new investment would be spread over. Penang is regarded as Southeast Asia's Silicon Valley and houses hundreds of international manufacturing companies such as Motorola, Jabil Circuits, Hitachi and FairChild.

Information Technology

- Singapore is building a high-speed, one-gigabit-per-second dedicated network linking its research institutes to others in the world. The network, called the National Grid Pilot Project, will link the city-state's two universities - the Institute of High Performance Computing and One-North. Creating the grid involves linking the existing hardware in the institutions through fiber-optic cables. Grid computing integrates several computer systems to offer performance unattainable by any single machine. The grid's supercomputing power would enable it to provided huge amounts of processing power for complex calculations and to mining mountains of data for genetics research.


- Chartered Semiconductor Manufacturing has dismissed talk that recent production woes at U.S. partner IBM could hurt their alliance. IBM had been experiencing lower than expected usage at its $3 billion new microchip factory in New York, which had cast a shadow on its technology sharing and manufacturing pact with Singapore-based Chartered Semiconductor. In November last year, Chartered struck a deal with IBM to collaborate on next-generation chip-making technologies and share production capacity in the factory in a bid to close the technology gap with its Taiwanese rivals.


- Telekom Malaysia profit had risen 12% in the second quarter, after its acquisition of Celcom Malaysia helped boost revenue in its cellular business. Net income in the three months to June rose to M$277.9 million ($71.3 million) from M$248.9 million ($63.7 million) a year earlier and sales rose 20% to M$3 billion ($768.1 million). Telekom is counting on a merger of its mobile-phone business with Celcom to bolster earnings and cut costs as it moves away from the fixed-line business, where growth is slowing. The merger gave it 40% of a market worth M$15 billion ($3.8 billion) in sales.

Hong Kong


- PCCW Ltd. swung to a first-half profit, but a loss at undersea-cable operator Reach Ltd. damped gains, and its share of the fixed-line market continued to decline. PCCW, the big telecommunications operator, reported net profit of HK$703 million ($90.1 million), compared with a loss of HK$448 million ($57.4 million) a year earlier. Consolidated revenue rose 5% to HK$10.7 billion ($1.4 billion) from HK$10.2 billion ($1.3 billion) a year earlier, mostly due to residential-property sales at its Cyberport development and a rise in broadband revenue. PCCW’s interim earnings failed to match analysts' consensus forecasts of HK$1.2 billion ($150 million). The forecasts did not take into account the loss at Reach -- the undersea-cable venture it owns with Australia's Telstra Corp.

- PCCW's re-entry into the pay-television is met with scepticism, as analyst think that it could also be a cosmetic move to cover concerns over loss of market share in its core fixed-line market. PCCW-operated lines are likely to drop to less than three million and analyst estimate its customer base could fall 200,000 in the first half. PCCW owned 3.1 million lines at the beginning of this year and rivals managed to gain 166,000 lines from PCCW networks in the first half. To combat the loss of market share, PCCW gave away short message service phones to customers last month. In a further move to sell more services within its network, PCCW has plans to launch a broadband pay-television service next month.

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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