A week in tech

A round-up of all the latest tech news.
Japan
Internet
ò The Softbank Corp. group said it would purchase a stake of about 20 percent in UK betting firm The Sporting Exchange (TSEL) for an estimated 50 billion yen ($429.4 million) possibly by April. To do this, Softbank said it would create an investment fund to buy 15-20 percent of the outstanding shares in TSEL from its shareholders, before buying 3 percent of new shares to be issued by the U.K. firm, a move that will increase the Softbank group's stake to 18-23 percent. TSEL owns Betfair, an online betting exchange with a global presence.

Information Technology
ò Toppan Printing said it would initiate the full-scale production of smart cards at a new plant in Shanghai, a move that will put itself as a leading supplier in the Chinese market. The facility was built by Toppan Printing Co. (Shanghai), a joint venture with Chinese companies. This marks the first time Toppan has made smart cards in China. Before this, it has produced magnetic cards in China but has farmed out smart card production. The plant has already received authorization to make and issue smart cards for credit card giants Visa International and MasterCard International. In addition to meeting demand from financial institutions, Toppan aims to expand sales of non-contact smart cards to subway operators and other public transportation providers. With the launch of the new plant, Toppan's smart card production capacity in China is expected to reach 1.5 million units per month, reportedly the largest in that country.

Semiconductors
ò Genesis Technology Inc. (GTI), Japan's largest semiconductor product testing house, said it would go public on the second section of the Tokyo Stock Exchange. The company tests chips still in their wafer stage on behalf of semiconductor product makers to propose ways to improve the production process in addition to finding defects. GTI was established in 1987 as an affiliate of Kobe Steel Ltd. when Kobe Steel entered the chip production business. Initially, GTI received technological assistance from Texas Instruments Corp., which had cooperative relations with Kobe Steel. The technology from Texas Instruments still helps GTI lead others in the semiconductor testing business. In response to the growth in outsourcing of semiconductor testing, GTI is expanding its operations and in recent years has enjoyed an increase in orders from home electronics makers. For fiscal 2005 through March, pretax profit is expected to increase by 6 percent to 1 billion yen ($8.5 million) on revenue of 13.3 billion yen ($114.2 million). GTI aims to boost revenue by at least 10 percent for fiscal 2006. GTI will use 1.6 billion yen ($13.7 million) in proceeds from the initial public offering to expand its flagship plant. Initial public offering is for 900,000 shares. Nikko Citigroup is the lead manager of the IPO.


Korea
Hardware
ò MP3 players remain the preferred portable music device for Koreans, but cell phones with MP3-playing functions are quickly attracting music lovers. A survey of 1,300 people between the ages 15 and 39 by the Seoul-based research company Metrix Corp. showed that nearly 34 percent of the respondents listen to music with MP3 players. Meanwhile, 22 percent said they used cell phones with built-in MP3 players. But when the same survey was done two months earlier, in November 2005, only 18 percent of respondents said they used MP3-enabled cell phones, which was up from 5.5 percent in a March survey. Users of MP3 players fell from 40.1 percent last March to 33.8 percent in January. Less than 6 percent of those polled said they listen to music on portable radios, and only 2.6 percent said they use cassette players.

ò SamsungÆs headquarters in South Korea has confirmed its plan to make Tianjin its largest overseas manufacturing and R&D base of mobile phones.

Telecommunications
ò According to sources of the industry sources, SK Telecom and TUMedia recently began a negotiation for supplying mobile communication value-added service and solution and satellite DMB with Reliance Infocomm.. In a separate report, Harvard Business School announced that it would use SK Telecom as a case study in one of its MBA courses. According to SK Telecom, talks are under way between Harvard Business School and SK to use KoreaÆs biggest mobile service network operator as a case study. SK Telecom along with Samsung Electronics and the now-defunct Daewoo Group are among a few Korean firms used as case studies by Harvard Business School.


China
Mobile/Wireless
ò KongZhong, a leading provider of advanced 2.5G wireless value-added services in China, announced a 34-percent growth year on year and 9 percent sequentially in its 2005 fourth quarter revenue to a record of $22.1 million. KongZhong said that with the companyÆs growth and acquisition of Sharp Edge, it expects to gain more market share in its core WVAS (Wireless Value Added Service) business in all four of the telecom operators in China, a status that will put it in good position when 3G services are introduced in China.

ò Dbtel, a company that used to be one of the top five mobile phone brands in China announced that it has terminated production in Mainland China, an announcement that makes it the latest casualty in the China market that is marked by intense competition and price-cutting. The market happens to be also the world's biggest. Shanghai Dbtel, a unit of the Dbtel Group of Taiwan, said that it had decided to withdraw from the mainland market. The withdrawal also marked the end of its distribution and after-sales services. The company, however, disclosed that it might still continue to serve other overseas markets, such as Russia, Thailand and Latin America. Shanghai Dbtel's gradual reversal of fortune peaked in 2004 amidst the overcapacity and fierce competition that have pushed also several companies, including Panda and Yi Mei, out of the market.

Internet
ò Shanda Interactive Entertainment, one of the largest online game operators in China, reported a fourth quarter net loss of Rmb538.9 million ($67 million). The company said its total net revenue posted a 16.3 percent decline year-on-year and 27.8 percent quarter-on-quarter to Rmb360.5 million ($44.8 million. The company ascribed its loss mainly to a non-cash impairment charge of Rmb521.5 million ($64.8 million) to reflect the fair value of Shanda's 38 percent stake in South Korean game developer Actoz. The company has shifted its business model by abandoning the traditional subscription payment model for three of its most popular games, opting for a method by which consumers pay for in-game value-added services such a certain in-game items and premium features.

Telecommunications
ò China Telecommunications Group, the parent of China Telecom Corp., disclosed its plans to spin off its engineering and telecom services arm for a Hong Kong IPO in a bid to raise between $200 million and $400 million in the second half this year. Under the plan, China Telecommunications Group will bundle its telecom and engineering assets from five or six provinces and cities, including Guangdong and Shanghai, into the proposed listing unit. The group has selected China International Capital Corp and Goldman Sachs as joint sponsors of the IPO. It would be the group's second spin-off for a Hong Kong listing after its operating unit, China Telecom Corp., the country's largest fixed-line operator, was able to generate some $1.5 billion in 2002 through a share floatation.

Ventures/Investments
ò Satyam Computer Services Ltd., a global consulting and IT services provider based in India, disclosed its plans to set up its operations in Guangzhou, China. Satyam said it has plans to increase its presence significantly in China and the setting up of the operational center is revealed by the company as the first step before it sets up a large development centre in China.
ò The National Academy of Nanometer Technology and Engineering (NANTE) said it has received a fund in the amount of Rmb38 million ($4.7 million) allocated by the ChinaÆs Ministry of Finance for the development of specialized industrialization projects on nanometer research. The Chinese government approved the establishment of NANTE in a move to foster the industrialization of nanometer technology and to upgrade the countryÆs competitive edge in the international high-tech industry. NANTE has partnered with several universities and research institutes, including the Chinese Academy of Sciences, Tsinghua University, Peking University, Military Medical Science Academy, Beijing University of Aeronautics and Astronautics, Nankai University and Tianjin University. The NANTE aims to set up a nanometer research and application platform among related industries, such as information technology, biology, medicine and pharmaceutics, and micro-machinery.

Semiconductors
ò NEC Electronics announced its plans to establish a facility in Beijing that will develop software for semiconductors used in digital audiovisual products. The company's digital AV semiconductor business in China is expected to generate annual sales of 10 billion yen ($85.8 million).


Taiwan
Hardware
ò Quanta Computer said it would invest $27.8 million in a bid to expand its Shanghai operations. The notebook manufacturer said it would assign $18.3 million to raise the paid-in capital of its wholly owned subsidiary Tech-Yeh (Shanghai) Computer and use the remaining $9.5 million to build a warehousing company. The subsidiary manufactures notebook computers, computer peripheral products and mobile phone sets. Quanta is considered the world's largest contract notebook computer maker.

Ventures/Investments
ò The Taiwanese government revealed its plan to invest NT$32 billion ($987.7 million) on six sectors over the next five years in a bid to boost development of its technology and up the level of its competitiveness. The government source said it would focus its resources in research and development and then join the private sector for future commercial production. Specifically, the government in Taipei said about NT$20 billion ($617.3 million) have been set aside for the nano industry, NT$5 billion ($154.3 million) to intelligent vehicle manufacturing, NT$2 billion ($61.7 million) on robot production and NT$1.8 billion ($55.5 million) for intelligent building development.


Hong Kong
Internet
ò Yahoo Hong Kong disclosed that it expects significant growth in its paid search business, with the service coverage expanding to several Chinese newspapers' websites in a bid to attract more users. Yahoo entered the paid search service through the acquisition of internet search service provider Overture in 2004, and recently changed the name of the service to Yahoo Search Marketing Solutions. The company disclosed that in Hong Kong, there are about 2,500 clients on paid search, with 90 percent of these being small and medium firms.

Telecommunications
ò Hutchison Telecommunications International (HTIL) disclosed that it has pared down its shareholding in its Indian mobile arm, Hutchison Essar, to 49.6% (from 53.1%) and gained an extra seat on its board in preparation for the unit's listing this year. This follows an M&A transaction that valued Essar at $6 billion. Under the deal, Kotak Mahindra Group sold its stake in Essar for Rs10.1 billion ($229 million) to the former chairman of HTIL's Indian unit. A company Telecom Investments India (TII) would then consolidate the interests held by other minority shareholders. After the deal, HTIL is seen as owning 37 percent in TII and has an option to buy the rest of TII from shareholders. Hutchison has plans to list publicly in India and it is presently clearing regulatory issues with the Indian government about how much a foreign entity can own in an Indian carrier. The laws in India now allow foreign firms to own up to 74 percent of an Indian carrier, a significant increase from 49 percent before.

Semiconductors
ò O2Micro International disclosed its move to list on the Hong Kong stock exchange even as it would not give details about plans to raise capital raising plans. The company said the listing is not aimed at raising fund for the firm O2Micro, a NASDAQ-listed chip designer, but to show the company's commitment to customers and employees based in the region. The company said the listing is for Asia-based employees who want to sell their O2Micro shares and would not have to wait up for markets in the US to open. Other sources though are saying that O2Micro originally intended to raise HK$800 million ($103.1 million) through a secondary offering, plans that seem to have been put on hold given the lack of excitement over semiconductor shares in Hong Kong. Cayman Islands-registered O2Micro is the first NASDAQ company to seek a secondary listing in Hong Kong.

Mobile/Wireless
ò Pointing to fierce market competition and rising 3G-related costs, SmarTone Telecommunications Holdings disclosed an 83.4 percent plunge in its interim net profit for the six months to December to HK$37 million ($4.7 million) from HK$224 million ($28.8 million) a year earlier. Hong Kong's mobile-phone sector is characterized as a period of consolidation and intense competition in the past year, with all trying to up its market share and convert users to 3G services. SmarTone said it saw a rise in its subscriber base to more than 1 million in December. In February alone it registered some 100,000 3G subscribers.


Singapore/Malaysia/Philippines/Indonesia
Information Technology
ò The IT industry of Singapore was worth an estimated $22.7 billion in 2005, a figure that represented an 8 percent growth year-on-year, according to the Infocomm Development Authority (IDA). The IT sector presently contributes more than 6 percent of SingaporeÆs GDP and is expected to grow as tech-savvy Singaporeans continue to exploit the Internet. The government says 74 percent of households own a personal computer, with 28 percent having two or more. A 2005 survey of IT usage showed that more than half of the households with Internet access are already on broadband connections. The government remains keen to innovate and is planning to construct a national high-speed broadband network that would cover all homes, schools and offices and is expected to be a catalyst for what Singapore called the growth of a creative economy. The network is called the National Broadband Network.



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