Japanese Tech Stock Weekly Summary (Dec. 1 - 7, 2008)

by: IRG Ltd

The following is excerpted from IRG's weekly stock report:

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  • Mitsubishi Electric Corp. (MSHBY) has received an order to build the ST-2 communications satellite for a joint venture between Singapore Telecommunications Ltd. and Taiwan's Chunghwa Telecom Co. for 13 billion yen (US$14 million). With the order, Mitsubishi Electric will become the first Japanese satellite maker to enter the commercial communications satellite market outside Japan, using its original Japanese-made satellite bus platform. The ST-2 will succeed the ST-1 jointly owned by SingTel and Chunghwa for their various communications businesses. For the production of the ST-2, Mitsubishi Electric has proposed using its original DS2000 satellite bus platform already used in satellites for the Japan Meteorological Agency and SKY Perfect JSAT Corp., an operator of communications satellite broadcasting businesses.
  • Hitachi Ltd. (HIT) and U.S. chipmaker Intel Corp. (NASDAQ:INTC) would jointly develop solid state drive (SSD) memory devices, which are seen as a promising alternative to hard disk drives. The move marks a strategic shift for Hitachi, the world's third-largest hard drive maker, which until now has not made a commitment to SSD technology. SSDs are increasingly being used as the storage device in laptop PCs, primarily because they are better at absorbing shocks and consume less power than hard disk drives. Under the agreement, Intel will manufacture SSDs jointly developed by the two firms. Hitachi will sell the devices, with the first shipment planned for 2010. SSD business would market the devices for business-use such as in servers and computer storage systems, and that it would not follow rivals like Toshiba (OTCPK:TOSBF) in targeting laptop PCs and other consumer-based applications.
  • Goldman Sachs Group Inc. may seek to increase its stake in Sanyo Electric Co. (OTC:SANYY), challenging Panasonic Corp.’s (PC) plans to take over the large makers of rechargeable batteries. The bank may offer to buy the shares from Daiwa Securities Group Inc. and Sumitomo Mitsui Financial Group Inc. Goldman earlier spurned Panasonic’s offer of 23 percent less than Sanyo’s closing price. A bid by Goldman would force Panasonic to raise its offer or abandon the biggest acquisition in Japan’s consumer-electronics industry. The latest proposal values the 70 percent stake owned by the three banks at 557 billion yen (US$6 billion), almost double what they paid in 2006. Sanyo lost 12 percent in Tokyo trading, taking its loss for the year to 3.9 percent.


  • Alibaba Group's (OTC:ALBCF) online payment tool Alipay partnered with SoftBank Payment Service (OTCPK:SFTBF) to provide cross-border payment services to Japanese companies, reports 163.com. The SoftBank subsidiary will promote Alipay to Japanese sites. SoftBank Payment Service expects ten or more Japanese sites to use the Alipay service to sell to Chinese consumers in 2009. Alibaba Group subsidiary Alibaba.com partnered with Softbank to establish Alibaba.com Japan in May.
  • NTT DoCoMo Inc. (NYSE:DCM) is canceling its planned spring release of a new smart phone from Nokia Corp. (NYSE:NOK). The move comes in response to the Finnish company's announcement that it will stop supplying handsets to NTT DoCoMo Inc. and Softbank Mobile Corp. by early next year. DoCoMo was preparing for the rollout of Nokia's E71 handset, which features enhanced Internet capabilities and has a full keyboard with the same setup as can be found on personal computers.
  • NTT DoCoMo Inc. aims to boost its overseas business to account for 10 percent of sales within five years from 2 percent now, as it continues to seek acquisitions after an investment in an Indian operator. DoCoMo announced last month that it would pay US$2.7 billion for a 26 percent stake in Tata Teleservices, India's No. 6 wireless carrier, making an entry into the world's fastest-growing major mobile market. Toshinari Kunieda, senior vice president and managing director of DoCoMo's global business division, said that the company aims to expand its overseas business through more acquisitions and increased cooperation with firms in which it has already invested.