A week in tech

A round up of all the latest tech news.


Mobile / Wireless

- KDDI Corp. aims to develop mobile phones powered by a small fuel cell through separate tie-ups with Hitachi and Toshiba aiming to commercialize them in 2007. Cell phones are becoming increasingly multifunctional, equipped with TV viewing and game playing capabilities and the trend is forcing handsets to consume more power. Currently available lithium-ion batteries for cell phones, however, last only about two hours if users continuously watch TV on their terminals. A handset powered by a fuel cell is expected to last more than twice as long. The planned fuel cell would extract hydrogen ions from methanol to generate power, meaning that no time would be required for recharging because simply replenishing its methanol supply would allow the battery to operate continuously. The partners in both projects seek to develop prototype cell phones powered by a fuel cell by the end of fiscal 2005.

- Sharp Corp. said its mobile-phone shipments in the April-June quarter were stronger than expected amid brisk demand in Japan and elsewhere, a sign that the company got off to a good start this fiscal year. Still, the Japanese consumer-electronics maker would not revise its earlier full-year targets. That is because "only a quarter of the year has passed" and Sharp needs more time to assess the market trend later in the year.


- Fujitsu has set up a foundry department to expand semiconductor manufacturing on behalf of other companies. The department acts as the firm's liaison with clients, including so-called fab-less chipmakers without production facilities. It handles negotiations as well as proposes to customers a range of chip production plans featuring the most advanced processing technologies. The move is part of a company effort to nurture the foundry business into a major revenue source. As part of the drive, Fujitsu is building a plant capable of producing 300mm-diameter semiconductor wafers in Mie Prefecture, which is slated to come on-stream next spring. Fujitsu has already won orders to produce chips with a line-width of 90 nanometers at the plant from US chipmakers such as Transmeta Corp. and Lattice Semiconductor Corp.



- Expected strong quarterly earnings reports from Korea's internet companies are raising the hopes of information-technology entrepreneurs. Rising profits buoyed by a solid sales base is expected to combine with their efforts to expand into overseas markets and inject momentum into internet stocks in the long-run. Analysts see value in the two biggest names in the business - Daum Communications Corp. and NHN Corp, both listed on the Kosdaq - and expect the two companies will report strong quarterly results. Overseas investors hold more than 40% stakes in both companies.

- Daum announced it would invest W8.8 billion ($7.7 million) to buy a 65% stake in Taon Corp. a joint venture with Poweredcom. The Japanese online venture owns Cafestar (www.cafestar.com), the largest community portal in Japan with 1.2 million members. Daum plans to launch a new version of Cafestar, which will be integrated with the company's business model in Korea. Cafestar last year reaped sales of W1.5 billion ($1.3 million) from digital items and Internet ads.

Media, Entertainment and Gaming

- The government and domestic broadcasters ended their four-year debate over technologies for Korea's digital-television standard, approving the US-based Advanced Television Systems Committee standard for digital broadcasts. The decision also paved the way for the European DVB-H (digital video broadcast handheld) standard to be included in the country's mobile television aspirations, with the government opening the possibility of adopting the platform as a multi-standard with the homegrown terrestrial DMB (digital multimedia broadcasting) technology. The agreement was released jointly by the Ministry of Informatio n and Communication, the Korean Broadcasting Commission, broadcast company KBS (Korea Broadcasting System) and the National Union of Media Workers.

Mobile / Wireless

- The Korean government may drop its policy of mandating mobile-phone makers to develop W-CDMA handsets in dual-band modes, attempting to promote investment in the troubled third-generation mobile platform experiment. The official declined to comment on whether significant discussions were held on dropping the dual-band mandates for W-CDMA phones, as several media reports suggested, but said the ministry is "open to every idea." The government has been promoting W-CDMA as Korea's third-generation mobile platform, hedging its bets between the more popular CDMA2000 1x EV-DO standard that currently has more than 5 million subscribers. There are only about 1,300 W-CDMA customers in Korea.


- The government ordered SK Telecom to reduce charges to its smaller rivals for using its networks as part of measures to level the playing field in the telecom industry. The reduction in the interconnection fees is expected to cut the nation's top mobile carrier's 2004 sales by around W240 billion ($208.7 million), or 2.5% of last year's revenue. The Ministry of Information and Communication said SK Telecom will charge interconnect fees that are 22.4% reduced from the previous rate of W41 ($0.04) per minute.

- Hanaro Telecom, resurrected from near-bankruptcy by a group of investors led by Newbridge and US insurer American International Group, is poised to shake up South Korea's staid telecommunications market. KT enjoys a near-monopoly in fixed-line service in Korea, with a market share of more than 95%. It also has more than half the market for broadband connections. And analysts say that Hanaro's likely growth, driven by new management and big investments, will come at KT's expense because Hanaro can offer similar quality services at a cheaper price.

- LG Telecom issued global bonds worth $200 million to foreign investors. LG said proceeds from the bonds maturing in five years and carrying a coupon rate of 8.25% would be used to pay debt or for its operations. South Korea's saturated telecommunications industry has been struggling to tide over a period of slow growth and weak consumption caused by an economic downturn.



- The battle with eBay Inc. for China's fledgling online-auction market has delayed plans by Alibaba.com, one of the world's largest business-to-business electronic-commerce sites, to go public soon. Alibaba plans to expand its investment in online newcomer Taobao.com this year. Alibaba declined to specify the amount of the investment but would exceed the Rmb100 million ($12.1 million) spent to launch Taobao.com last year. Alibaba's decision to refrain from preparing for an IPO follows a weak performance by technology shares in recent months in China. China's continuing investment and credit squeeze, aimed at slowing the country's economic growth, also has made investors wary of companies with mainland exposure and fussy about how much they are willing to pay for new listings. Alibaba's Taobao.com and rival EachNet.com are neck-and-neck in the race to capture China's online-auction business. The two companies each hold about a 50% share of the Chinese market. Competitors are emerging to chip away at that 50-50 split. Yahoo! Inc. joined the race in April, launching 1pai.com, a joint venture with Chinese-language Internet portal Sina Corp.

- Tom Online Inc. is a rising star in China's internet sector, challenging dominant portals Sina, Sohu.com and Netease.com. Tom Online has received analysts' stamp of approval for its clear focus on China's high-growth market for wireless value-added services, and it is well-placed to capture opportunities in this fast-expanding sector. And the outlook for the stock is bright, with an upside potential of as much 90% in coming months. A boom in short messaging service, or SMS, in China had helped the three major portals overcome the burst of the internet bubble in 2001-2002. But now, SMS growth is slowing, and portals are turning to wireless value-added services, or wireless VAS, to maintain revenue from their mobile-phone customers.


- Mainland chipmakers are shrugging off news that the country has agreed to end a preferential tax policy that United States manufacturers complained put them at an unfair disadvantage. After April 1 next year, the mainland will quit providing rebates on the value-added tax (VAT) for domestically produced chips. Mainland companies, however, said the discounts did not provide much of an advantage over imported semiconductors and scrapping the policy would not significantly affect their cost structures. Semiconductor Manufacturing International Corp, the mainland's largest chipmaker, does not benefit much from the VAT discount because most of its output winds up overseas, qualifying its chips for a separate export rebate instead.


- Mainland telecommunications suppliers are grabbing overseas sales by targeting Africa, Southeast Asia, the Middle East and former Soviet republics - price-sensitive markets often skipped by major Western brands. This month, Tunisia awarded ZTE Corp a deal to build third-generation (3G) mobile phone networks in Tunis and Sousse, giving the Shenzhen-based company its first contract for advanced high-speed mobile services. This follows an $18 million contract to build a CDMA network in Egypt and a $42 million deal to install GSM equipment in Libya. Tunisia has also contracted Huawei Technologies to install 3G equipment for trials in the Northern African country. And Huawei won a contract this week from Telkom Kenya to supply VoIP equipment. Norson Telecom Consulting said that as ZTE and Huawei were little known in Western countries, developing markets offered the best opportunity for overseas income.



- TSMC boasted record sales of NT$22.5 billion ($668.3 million) in June on the back of brisk demand. June sales were up 3.7% from May and 26.2% from a year earlier. Cumulative sales in the six months to June rose 37.1% year-on-year to NT$122.4 billion ($3.6 billion). The June figure marked its third consecutive monthly record. Sales in the second quarter to June registered an all-time high of NT$64.9 billion ($1.9 billion), without providing comparative figures. The company said sales in the first quarter had reached NT$57.5 billion ($1.7 billion).

Singapore / Malaysia / Philippines / Indonesia

Information Technology

- Malaysia planned to create several new "cyber-cities" to expand its rapidly growing internet technology industry and spread the benefit to all Malaysians. The move is the second phase of the Multimedia Super Corridor (MSC) project south of Kuala Lumpur, which has attracted more than a thousand companies, close to 20,000 jobs and a software-driven industry worth M$6.5 billion ($1.7 billion) since its inception in 1996. Located in Cyberjaya, the MSC was designed as a hub for multimedia products and services and was the brainchild of former premier Mahathir Mohamad. The main aim during the first phase of the project was to attract foreign information technology companies and develop new ideas for software. The MSC's 'Next Leap', spanning 2004 to 2010, would see the setting-up of Cyberjaya-linked hi-tech centers throughout Malaysia.

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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