Japanese Tech Stock Weekly Summary (Dec. 8 - 14, 2008)

by: IRG Ltd

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

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  • Sony Corp. (NYSE:SNE) plans to eliminate 8,000 jobs and curb investments, outsource production and move away from unprofitable businesses as part of plans to save more than 100 billion yen (US$1.1 billion) by the year ending March 2010. The job cuts represent about 5 percent of the electronics division’s workforce. The reductions underscore the severity of the slump in consumer spending at a time when companies typically prepare for the peak Christmas shopping season. Sony, the world’s second-largest maker of consumer electronics, and larger rival Panasonic Corp. (PC) slashed its profit forecasts for this year because of the global recession.
  • Sharp Corp. (OTCPK:SHCAY) is cutting 380 temporary workers at its Japanese plants and shuttering some assembly lines making flat panels to cope with the global slowdown. The news follows word earlier this week that rival Sony plans to slash 8,000 jobs around the world and an additional 8,000 temporary jobs all in electronics. Sharp's job cuts account for about a third of the company's temporary manufacturing employees in Japan, the company said. The announcement came amid looming fears about job losses in a nation that has long upheld the tradition of lifetime employment underlines the serious damage Japanese exporters are taking from a worldwide downturn.
  • Sharp Corp. will shut down production lines for liquid crystal display panels at two domestic plants due to faltering global demand for personal computers and mobile phone handsets which use liquid crystal display panels. According to Nikkei, Sharp will slash some 300 contract workers in line with the production halt, and it would be the first time Sharp has closed liquid crystal display production lines in operation. Sharp will close one production line each at its plant in Mie and another factory in Nara Both factories are located in western Japan. The two production lines began operations in the early 1990s, and currently make low-definition liquid crystal display panels.
  • Fujitsu (OTCPK:FJTSY) is in talks with several parties for the sale of its hard disk drive unit and Western Digital Corp. (NYSE:WDC) has emerged as the leading candidate to purchase the unit. Fujitsu has been shifting its focus to concentrate on its higher margin information-technology solutions business. In November, Fujitsu agreed to buy Siemens AG's 50 percent stake in Fujitsu Siemens Computers. Reportedly, many companies, including Lenovo (OTCPK:LNVGY), plan to buy Fujitsu's PC business.


  • Elpida Memory Inc. (OTC:ELPDF) will redeem all or part of a US$540 million convertible bond that has weighed heavily on its share price, a move that may pressure it to seek alternative financing to stay competitive. Elpida raised 50 billion yen (US$540 million) through the bond last month, planning to use it for investment to help shrink its chips and pack in more power at lower cost. It needed the money for new equipment to better compete with bigger rivals Samsung Electronics (OTC:SSDIF)and Hynix Semiconductor, as DRAM chip makers grapple with plunging prices. But Elpida had an agreement with Nomura Holdings, which bought the bond, to pay the money back if its share price stayed below 509 yen (US$5.59) for 20 straight days.

Media, Entertainment and Gaming

  • Nintendo Co. (OTCPK:NTDOY) President Satoru Iwata expects demand for Wii and DS game players to hold up this year after sales during the Black shopping week increased more than the company had anticipated. Iwata’s comments indicate Nintendo is coping better than Sony Corp. and Panasonic Corp. with the global recession that forced the world’s two largest consumer-electronics makers to slash their annual revenue forecasts. Monthly retail sales in the U.S. tumbled the most in almost four decades in November. U.S. sales of the Wii in the week ended Nov. 29 doubled to about 800,000 consoles, Iwata said. The number of portable DS players sold rose 20 percent to around 800,000. Nintendo’s flagship machine led U.S. console sales in October with 803,000 units, followed by 371,000 for the Xbox 360 and 190,000 for the PS3.
  • Square Enix Holdings Co. Ltd. will develop the next version of its blockbuster "Dragon Quest" game series for Nintendo's Wii game console, aiming to expand the fantasy game's fan base. The launch date and selling price for Dragon Quest X (Ten) has yet to be set, said the game software maker, also known for its "Final Fantasy" game series. The game, which until now has been designed for Nintendo's DS handheld gear, sold more than 47 million units as of the end of September.
  • Jupiter Telecommunications Co plans to buy smaller rival Mediatti Communications Inc. for 28 billion yen (US$303 million). Jupiter will take a 100 percent stake in the smaller company. Jupiter Telecom, known as J-Com, is beefing up its efforts to take over regional cable TV operators and offer new services to attract more subscribers. As of the end of October, J-Com had a total 2.91 million subscribers for its services, up 10.9 percent from a year ago. Jupiter Telecom's shares were trading up 1.6 percent at 80,400 yen (US$882.60).