Japanese Tech Stock Weekly Summary (Mar. 16 - Mar. 22, 2009)

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

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Hardware

• Sony Corp. (SNE) reduced its planned dividend payment by 15 percent in order to conserve cash after the global recession forced the company to forecast a record operating loss. Sony is eliminating 16,000 jobs worldwide and slashing its number of manufacturing sites after projecting a record 260 billion yen (US$2.7 million) operating loss for this fiscal year.

• Sony Corp. gained access to more than 500,000 electronic-book titles for its digital readers through an agreement with Google Inc. (GOOG), a partnership aimed at challenging the dominance of Amazon.com Inc.’s (AMZN) Kindle. Sony will access Google’s library of free titles. The agreement expands Sony’s eBook store to more than 600,000 titles, compared with the Kindle Store’s 245,000 books. Since the Kindle’s introduction in 2007, three years after Sony’s first digital reader, the popularity of the Amazon.com product has drawn comparisons to Apple’s (AAPL) success with the iPod music player. That’s prompting Sony Chief Executive Howard Stringer to seek ties with Google as the number of digital readers is projected to more than double this year.

• Hitachi (HIT) will undergo a major restructuring in an attempt to cut costs by 500 billion yen (US$5 billion). The company's consumer business group and its automatic systems group will be spun off into separate, 100 percent owned subsidiaries. The company hopes to expedite decision-making and hold these units accountable for generating earnings. The consumer business division will produce mobile phones, flat panel TVs and other electronic devices. Hitachi has also initiated a board shakeup, announcing its chairman and president will both stand down and appointing Takashi Kawamura to take both jobs. The company will also establish a renewable energy business, as well as a resource recycling business.

• Toshiba Corp. (TOSBF.PK) said Norio Sasaki will become president in June. Toshiba is the latest Japanese electronics conglomerate to reshuffle top management betting that a change will help revive the company. Sasaki, a 59-year-old engineering veteran in Toshiba's nuclear power business, will officially take the helm of the hard-hit firm after a shareholders' vote slated for late June. Atsutoshi Nishida, Toshiba's current president, will become chairman, while Chairman Tadashi Okamura will become an adviser to the board. Sasaki said he would pursue a recovery program "thoroughly" and aim to restore profitability in the fiscal year starting April. The company may consider raising capital, but he declined to elaborate.

Semiconductor

• Elpida Memory, Inc. (ELPDF.PK) has acquired a portion of the shares of Rexchip Electronics Corporation from its strategic partner Powerchip Semiconductor Corporation (PWSCF.PK). Rexchip is a Taiwanbased manufacturing joint venture created by PSC and Elpida. As a result of the acquisition, Rexchip becomes a consolidated subsidiary of Elpida. The effect of the acquisition on Elpida’s fiscal year 2008 consolidated earnings performance is expected to be minimal.

Telecommunications

• NTT Communications Corporation announced that Global Data Services JSC (GDS), its joint venture with Vietnam Posts & Telecommunications Group (VNPT), will open a Tier 3-equivalent premium data center in Hanoi. The Thang Long Data Center, the first in Vietnam to be designed and developed with advanced Japanese technology, will satisfy the needs of multinational companies by leveraging VNPT's ample domestic network and NTT Com's extensive, high-quality international network, as well as its expertise in designing and operating global data centers. The expanding business of multinationals in Vietnam has sharply raised the need for local back-up facilities, such as data centers, to retain business continuity.