A Week in Tech summarises the major stories in technology and is broken down by country and sector.
A week in Japanese tech
- Nippon Telegraph and Telephone Corp. will lower capital spending by Y400 billion ($3.1 billion) to Y2.2 trillion ($16.9 billion) from fiscal 2001 to fiscal 2004. It intends to reduce debt by Y1.3 trillion yen ($10 billion) to Y6.4 trillion ($49.1 billion) and will cut 17,000 jobs, or 7.8% of its work force. NTTC is also considering a share buy-back for the first time. NTTC plans to strengthen its broadband businesses, and expand the areas offering fiber-optic communications services for households. ISP services currently offered separately by group firms will be integrated.
- Matsushita Electric Industrial Co., the world's largest consumer-electronics maker, will close half its plants in China to improve efficiency, the Mainichi newspaper reported. Matsushita manufactures the Panasonic and National brands and currently has 41 factories in China.
- Digital camera exports from Japan to North America increased by 52.1% in February from the previous year.
- International Business Machines Corp. and Hitachi Ltd. have agreed to merge their hard disk drive units. The terms are still under negotiation, however sources say that Hitachi will own 70% of the joint venture and will pay IBM more than $1 billion for majority ownership. IBMÆs hard drive revenues are $3 billion to $4 billion annually.
Media, Entertainment and Gaming
- Sharp Corp. and NTT DoCoMo Inc. will jointly develop an electronic-book display format for mobile phones and personal digital assistants. It will use mobile document format or XMDF, which enables the display of novels and text with vocal instruction and animated illustrations. It will be based on SharpÆs image technology and NTT DoCoMo's telecommunications expertise.
- Softbank Corp. says it has sold 11.5 million shares of Yahoo Inc. for US$171 million to SBC Communications, a US regional phone-service provider. The sale reduces SoftbankÆs holdings in Yahoo from 16% to 14.3% and assists in reducing SoftbankÆs interest bearing debt.
A week in Korean tech
- KT Corp, a state-run telecommunications giant, stated that no decision has been made regarding a merger or partnership with Daum Communications Corp., a Kosdaq-listed e-mail service provider.
- The government will loan W80 billion to broadband Internet service providers. It will provide W37.2 billion to Hanaro Telecom Inc., KoreaÆs No. 2 broadband carrier, W24.1 billion to Powercomm, a cable network operator, W11.9 billion to KT Corp., a state-run telecoms giant and W6.5 billion to Dacom Corp., a fixed-line carrier.
- Dacom, a fixed-line and Internet arm of the LG group, has submitted a letter of intent to joint bid for a 30% stake in Powercomm, a cable network operator of Korea Electric Power Corp. The bidding consortium includes Canadian Pension Fund and Softbank Asia Infrastructure Fund, a joint venture of Cisco Systems Inc. and Japan's Softbank Corp.
- Samsung Electronics, the world's largest memory chipmaker, reported first quarter net profits of W1,900 billion ($1.45 billion), a 53% increase from the previous year. The result was driven by a recovery in semiconductor prices and increased mobile phone sales. Samsung currently sells D-Ram chips at $4.50 each, compared to November prices of less than $1 each.
KoreaÆs system integration (SI) companies achieved higher than expected first quarter revenues, suggesting a recovery in the high-tech sector. KoreaÆs SI companies are LG CNS, Samsung SDS, SK C&C, Shinsegae I&C and Ssangyong Information & Communications Corp.
- KoreaÆs major portal sites achieved higher than expected first quarter earnings, suggesting a recovery in the Internet content and search engine business. The earnings were mainly driven by an increase in sales and advertisement revenues, and a positive take-up of paid content services. KoreaÆs major portal sites are Daum, Yahoo! Korea, NHN Hanaro Dream and Freechal.
A week in Chinese tech
- 3721.com, a leading Web site location search engine, raised another $10 million in a third round of fund raising. Sources say that the funding was obtained from Japan's Jafco Investment (Asia Pacific) Ltd. and Taiwan's CDM.
- Sohu.com, a Nasdaq-listed Internet portal, will joint venture with Guolian Securities Ltd., a local brokerage firm, to create an online trading site. Sohu will control 51 percent of the new company. The joint-venture partners have budgeted an initial investment of $6 million.
- Sina.com, China's biggest Web portal, will start a service called Sina Online allowing dial-up, broadband and wireless Internet access. Users will be able to personalize their Sina page that includes weather reports, games and e-mail, and may also use a Sina Web browser. A launch date or rate structure has not been finalized.
Media, Entertainment and Gaming
- Sun Television Cybernetworks will acquire Media Pioneer Ltd. and expand into the publishing and distribution of audio and video products.
- China has released the timetable for the opening of the publications-distribution sector. Publication distributors will be able to establish retail joint ventures in five economic special zones and eight cities within the first year, after China's entry into the World Trade Organization.
- NEC Corp., the world's third-biggest chipmaker, will joint venture with Shanghai General Electronics (Group) Co. in China, to make liquid crystal displays. NEC was the thirteenth largest display maker globally last year, with Y124.5 billion ($953 million) in LCD sales. NEC will scale back production in Japan.
- The National Association of Software and Service Comp. in India, says that China does not pose an immediate threat to the Indian software and service industryÆs exports. It states that the average wage cost in China is 15 to 20% higher than India, and that the software industry in India was better qualified and had superior project management skills. It also believes that China is currently focused on serving its domestic IT market.
- Legend Group, China's top personal computer maker, has joint ventured with AI Software to develop information technology services for China's growing insurance industry. Legend will invest 23.3 million yuan (US$2.8 million) for a 70 percent stake. AI Software will provide its insurance IT solutions business, including supporting staff and intellectual property rights.
- Sybase, an enterprise software firm, has secured a US$2 million contract with China
Telecom in Beijing. Sybase recently opened its new software solutions center in Beijing, its third center in Asia, which will be used to showcase new technologies and train partners. Sybase has a 45 percent share of the telecoms database market, behind OracleÆs 45.5 percent and in front of IBMÆs 8.5 percent market share.
- FranceÆs Alcatel invested $9 million in a Chinese telecom technology fund established for Chinese telecommunication start-ups. NewMargin Ventures, a Shanghai-based venture capital firm, will manage the fund and will invest another $9 million to the fund.
- Singapore Telecommunications Ltd., Southeast Asia's biggest phone company, will not write down its $7 billion investment in Australia-based SingTel Optus Pty., despite write-downs from Nippon Telegraph & Telephone Corp and other counterparts on similar investments. SingTel says it will rebalance the way it accounts for its goodwill in Optus.
A week in Taiwanese tech
- Specialists and researchers in TaiwanÆs semiconductor, IC design, aerospace, ship-building and anesthetic industries, that are sent to the mainland, must be reported to authorities. The government intends to regulate hi-tech workers and protect its professional talent.
- Chunghwa Telecom Co Ltd and Yahoo!Kimo, have entered into a strategic alliance to provide asymmetric digital subscriber line (ADSL) services. Chunghwa will provide the ADSL connection and Yahoo!Kimo will provide marketing and other value-added services. Both will provide online content.
A week in Hong Kong tech
- Pacific Century Cyberworks will hire 700 high-tech workers to upgrade its information technology services. Last month PCCW laid off 858 workers.
- Zheda Lande Scitech, a Hangzhou-based hardware and software distributor and integrator, hopes to raise HK$100 million listing on the Growth Enterprise Market. Approximately half of Zheda's revenue comes from mobile operator China Unicom, while the remainder is equally split between China Mobile and fixed-line operator China Telecommunications.
- Thiz Technology, a Linux software developer, announced it had won a distribution license from Beijing Software Industry Association. It has recently released its latest version of its operating system and office software. Thiz expects 50 percent of revenue will come from the mainland.
- Priceline.com launched its Asian operations through a joint venture with Hutchison Whampoa Ltd, a Hong Kong conglomerate. Hutchison-Priceline Travel Ltd is based on PricelineÆs US model, which allows consumers to name their price for airline tickets and hotel reservations. Sites in Singapore and Taiwan will be launched later this year.
- Red-Dot, an online auction site, has opened two customer services centers in Causeway Bay and Mongkok. Red-Dot recently closed its street operation as part of its parent companyÆs, SUNeVision, restructuring plans.
A Week in Tech is brought to you by FinanceAsia and iRG, the Asian boutique that focuses on technology and biotech.